Packages Won’t Save a Possible Box Office Bomb, But Zombies Will

Imagine that the Hollywood movie industry is like a giant high school.  Now imagine that you’re just an average ridiculously good looking student that looks like they’re in their 20s heading to the cafeteria for lunch.  A sullen looking teenager you’ve never seen before sits at your lunch table, and before you can say hello he starts telling his sob story.  Back at his old high school he used to be a god.  People loved him, he had parties every weekend, and even though they would miss him, people were beyond excited to hear that he was transferring to your school that’s known for being awesome.  He changed his look to fit in with the new students, but as soon as he did his old friends decided that they hated him and abandoned him.  And he was equally horrified to learn that nobody at your school was excited to meet him or befriend him.

He spent so much time and money on his new look and attitude that he’s broke and he needs a way to get back on top.  He mentions that he’s throwing a huge party this weekend for his old friends and new friends, and that he wants you to be one of the guests of honor (even though you just met this kid and don’t think he’s all that amazing).  Even though he’s making his party seem like it’s going to be the best thing on earth, he frequently admits during his story/rant that he doesn’t think that the party will be that great and that it won’t turn out how he wanted to.  When you ask about what kind of booze will be there he says that there will only lukewarm cheap beer and half empty bottle of vodka that’s cut with water.  Despite the fact that he mentions that he thinks his own party will suck, he still wants his special guests to pay $10 at the door for the privilege of going to the party that he isn’t even all that excited to be throwing.

This harrowing tale is full of metaphors.  The ridiculously good looking and way too old to be here high school student is the moving going public, and the whiny depressed new kid is World War Z.  World War Z started off as a successful novel that focused on a variety of characters dealing with a worldwide zombie outbreak.  The entire premise makes it sound like it was born to be a summer movie block buster, but thanks to a ballooning budget, several delays, and a last minute re-write the movie isn’t living up to its high expectations.   People involved in its production have stated that they aren’t happy with their end result, and rabid fans of the book (like me) are disappointed with the changes to the plot or the dumbing down of the message.

Despite the movie’s litany of issues, studio executives have come up with a revolutionary (awful) idea to make back their money.  Fans who are excited to see the film had the option to pay $50 for a mega ticket.  The package is pretty good, it included an early screening at one of five participating theaters in L.A., Houston, San Diego, Atlanta, and Philadelphia, plus a small popcorn, a pair of World War Z collectible 3D glasses, a movie poster, and a digital download when the film becomes available on home video.  Some people think that the mega-ticket could pave the way for more perks like it.  Either way, it seems like just having a movie with zombies in it is enough for the moving going public.

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Supreme Court Strikes Down Pay For Delay Deals in Pharmaceutical Industry

Let’s say that you have an awful disease that can only be treated by a very specific medication.  WeHatePeople Inc. is the only pharmaceuticals company that makes the medication that can save your life, but unfortunately you’d have to pay thousands of dollars for each treatment (your insurance will help, but they can’t do much).

You go to drown your sorrows at a local bar, where you just happen to see someone in a snappy button down shirt with the WeHatePeople Inc. logo on the pocket.  You decide to march up to the person to give them a piece of your mind, and halfway through your story the employee bursts into a wild sob.  They explain that they work in the legal department of WeHatePeople Inc, and that they’ve been negotiating with SlightlyLessTerribleDrugCompany LLC to delay the generic version of your life saving miracle drug.

That weird and slightly implausible situation was sad, but thanks to a Supreme Court ruling it shouldn’t happen again anytime soon.  On Monday the Supreme Court ruled that pharmaceutical manufacturers can be sued over “pay for delay” deals.  The landmark ruling was surprising because most people weren’t aware that it was perfectly legal for other companies to do this.  Pay for deal isn’t just legal, it’s pretty dang common.  The Federal Trade Commission estimates pay-for-delay deals cost drug purchasers a cool $3.5 billion a year for it.  The Supreme Court ruling could open the flood gates for an array of lawsuits from wholesalers, retailers, insurers, and anti-trust enforces.

Since the ruling can only mean good things for the public, pharmaceutical lobbyists naturally assume that this decision will doom all of mankind.  Pharmaceutical Research and Manufacturers of America claim that the ruling will discourage companies for reaching settlements, and that it will negative affect patients and discourage investment opportunities.  They neglected to mention how having access to affordable medication is bad for patients, or how removing generic approval hurdles will negatively impact research.

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Luluemon CEO Steps Down, Surprisingly Has Little To Do With Transparent Pants

Not pictured: The legions of perverts behind her taking pictures of her see through clothing

When you hear the name Luluemon, what do you think about?  If you’re like 99% of the population you probably think about tissue paper yoga pants, but the company has been making headlines for a different reason.  Earlier this week Luluemon CEO Christine Day announced that she would step down from her position at the company.  Even though some reporters are trying to say that the pants predicament caused Day to lose her job, Luluemon investors have a very different take on the matter.

The transparent yoga pants didn’t really help the company, but Day actually took the right steps in handling the problem and confronting it in the press.  If anything the whole scandal just showed how competent of a CEO Day was.  Instead of shuffling around employees and scapegoating, she fired the company’s Chief Product Officer and got started immediately doing damage control by offering customers refunds and discounts to get back in their good graces.

Stock shares grew significantly when Day was in control of the company.  They were just at $4 a share when she started, and they closed at $80 share before she announced her leaving the position.  The number of stores nearly tripled during the five years she was in charge of the company, and they’ve become an established household name during a time where economic growth was stagnant and people were quickly dropping brick and mortar retailers for e-tailers.

Day may have done everything right when she was in charge, but some people think that her departure could be a sign that there’s going to be trouble for the company that has experienced a meteoric rise to the top.  Her discounts may have helped some customers come back to the business, but Luluemon still hasn’t fully recovered the share of customers they lost after the big recall.  Since Day didn’t name a successor, shares dropped by $10 the day she announced her decision to leave the company.  Some also wonder if their expansion in men’s clothing is a logical next step, or a short sighted attempt to seem innovative when they’re out of ideas.  Either way, it seems like Luluemon will never be the same.

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The Economics of Turkey

Unless you live under a rock (or live in Turkey and get your news from national broadcasters), you’re probably aware of the turmoil happening in Turkey right now.  What started off as a peaceful protest over a new shopping mall turned into a full blown rebellion, and now people are eagerly watching to see what’s going to happen next.

There are a lot of reasons why the Turkish people are protesting.  Their “democratic” country has been slowly shifting to a more conservative theocratic organization, and their leader has made a lot of questionable and potentially dangerous decisions.  People are talking a lot about the political reasons behind the protest, but are neglecting to talk about a big underlying reason of the current situation: the Turkish economy.

One of the reasons why Prime Minister Recep Tayyip Erdo?an has gotten more and more brazen with his political decisions has to do with the country’s somewhat recent economic expansion.  During the decade Erdogan has been in power the country has experienced an extraordinary period of economic growth.  This time period cemented Turkey’s status as the “model child” in the family of Islamic countries.  You see, Erdogan is backed by the Islamist Justice and Development Party, a powerful religious political party that came to power in 2002.  Most countries (mainly the US) were horrified when nearly a year after 9/11 there was another Islamic republic coming to power, and to their surprise absolutely nothing negative came from it.   When other countries were training terrorists and fighting over the good swing Turkey was quietly playing with legos while building up their economy.

When Erdogan was in power their out of control budget deficit and inflation problems drastically improved, their loans from the International Monetary Fund were paid off, and per capital income nearly tripled.  The older generation had never seen this much prosperity and supported Erdogan fiercely, and other countries were praising his efforts.

The flip-side of Erdogan’s rule isn’t nearly as sunny.  While some Turkish nationals praise his economic decisions, others argue that the Erdogan economy isn’t nearly as prosperous as they think it is.  Even though the purchasing power for most Turkish people has dramatically risen, many are in a lot of debt. There’s no doubt that the underlying reasons of the protest have more to do with political ideology than anything else, but the economy is one of the main things that has some Turkish people behind Erdogan

 

 

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Zynga To Lay Off Over 500 Employees, Exactly One Person Is Shocked

In the beginning of 2012  Zynga was hailed as the wiz kid company of the internet gaming age.  They had annoying and addictive games that millions of people were playing on Facebook, they had figured out a way to make the play-for-pay model affordable and addictive, and they were entering lucrative deals with Facebook and Hasbro.

Some people worried about the viability of company that shot to the top in such a short amount of time, but people were sure that the negative nancies would be drowned in the tidal wave of revenue Zynga was about to earn.  By the time they posted their first quarter earnings in March they had earned $329 million in just a few months, and they had long surpassed the market value of Electronic Arts.

By the time 2012′s second quarter rolled around the company proudly reported their revenue gain of $332 million, and quietly tried to downplay their net income loss of $22.8 million and their reduced bookings forecast for the year.  After their good news and not so awesome news hit the business world Zynga’s stock plummeted by 40% in just a few hours.  And since 2012′s embarrassing second quarter the company has been on a steady cycle of either being in danger of going out of business or sleeping on top of piles of money.

It looks like Zynga workers are going to have to trade in their money mattresses for bales of hay because the company announced that they were going to lay off about 1/5th of their staff (roughly 520 employees) and close some of their locations in Los Angeles, Dallas, and New York.  The company estimates that they’ll be able to save $70-$80 million with their cuts, which can really help make up for their projected second quarter loss of $28.5-$39 million.  Not much to say here, aside from the fact that there are a lot of investors and financial annalists doing the i-told-you-so dance.

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Retailers Clash With Banks Over Usage Fees

Does it ever piss you off when you have to use an ATM that isn’t your banks because you know that you’re going to be charged a useless usage fee?  Do you ever rage when you look at you bank statements and see a bunch of crappy fees you weren’t even aware that you were paying?  There are more people who aren’t raging on The Consumerist that share your bank rage, corporations are also pretty much sick and tired of paying fees for credit cards and debit cards.

A lot of people are unaware of the fact that every business that accepts credit or debit payments have to pay the companies that issue them a small fee for processing. Over the years retailer’s usage fees have been slowly climbing along with our fees, and some retailers are mad as hell and they aren’t going to take it anymore.

Target Corp, Macy’s Inc., and about 15 other huge retailers are suing Visa Inc. and MasterCard Inc. over their outrageous fees.  This isn’t the first time retailers and companies have clashed over fees.  In fact this lawsuit is actually sort of a follow up to a previous multi-billion dollar settlement from an anti-trust suit that the plaintiffs dropped out of about a year ago.  The accusing companies claim that the terms they agreed too still gives Visa and MasterCard too much freedom to raise fees in the future, and they claim that they’re still paying significantly higher costs to process Visa and MasterCard branded cards.  A spokeswoman for the Electronic Payments Coalition claims to no one is really that surprised by the new lawsuit, and most likely flipped a hardy middle finger when asked if the companies she represents cares about how the plaintiffs feel.

Plantiffs:

 

Kohl’s Corp

Staples Inc.

J.C. Penny Co. Inc.

Office Depot Inc.

L Brands Inc.

Office Max Inc.

Big Lots Stores Inc.

Abercrombie & Fitch Co.

Ascena Retail Group Inc.

Saks Inc.

Bon-Ton Stores Inc.

Chico’s FAS Inc.

Luxottica Group SPA

American Signature

Wal-Mart and CostCo were totes on board with opposing the settlement, but for whatever reasons they opted out of the large laqsuit and said that they may choose to file their own separate suits.

 

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Yahoo Purchases Tumblr For $1.1 Billion

That Feel

The internet exploded a little Monday when the news hit that the relevant in the 1990s internet company Yahoo purchased Tumblr for a little over $1 billion (technically they made the deal Sunday, but that detail isn’t that important).  The Yahoo/Tumblr deal is the largest acquisition of a social networking company in years, surpassing last year’s Facebook/Instagram deal by mere millions of dollars.  Some believe that the acquisition was a bold move from Marissa Mayer, the CEO of Yahoo and the brief target of internet rage after she took away her employee’s work from home days,that was done in order to make today’s internet whipper snappers care about Yahoo.

Actual footage of acquisition

 

Some people wonder if Mayer made a mistake purchasing such a large and popular company, but since she has been the CEO she has made a number of acquisitions and they have yet to burst into failure flames.  On the other hand Yahoo’s acquisition of Flickr could have turned out a bit better, so some people think their worrying is justified.  People on Yahoo’s end swear that they don’t plan on making a lot of changes to tumblr’s policies and that users shouldn’t expect to see much change.  Bloomberg Businessweek was kind enough to point out that they may have a problem keeping that promise.

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AMC And Other Theaters Outraged With Disney Over Ticket Revenue Divide For About A Week

This is probably the least disturbing picture I found when I googled “evil disney”

It’s no secret that owning a movie theater can kind of suck if you want to make money.  Sure people flock to it every night to see the latest releases, but the movie studios make more money from the meat in the seats than the theaters do.  You can thank profit hungry movie executives for the $6.00 box of stale cookie dough bites you just paid for, but some people in the theater business are sick and tired of movie studios reaping the benefits of their hard work.

Iron Man 3 is scheduled to be released next Friday, and unless you live under a rock/hate Marvel you know that it’s expected to be one of the highest grossing movies of the year (if not the highest grossing because seriously its Iron Man).  Regal Entertainment Group and AMC Entertainment Holdings were supposed to start selling online tickets for the movie, but after realizing that they were getting completely screwed by Disney on the revenue split they decided to refuse to sell them.  Soon other theater franchises (which apparently exist) followed suit.

Usually most movie studios and movie theaters split ticket sales revenue “50-50″, but in reality it’s more like 40-60 or 30-70 because it’s pretty common for studios to request a bigger share of revenue for high-profile releases.  Apparently this all started when movie studios and theater franchises met at Cinema-Con when Disney made a big presentation about their upcoming pictures.  When Disney announced that they wanted to renegotiate how cinema chains split up the ticket revenue between studios for their upcoming picture, AMC put their foot down.

It isn’t uncommon for movie studios and theaters to clash over ticket revenue, in fact it seems like every four years there’s a new battle royale over who gets what.  People are crying foul this time because it seems like Disney is doing this in anticipation for their upcoming big movies.  Disney acquired the rights to the Star Wars franchise a few months ago, and there are rumors that the company is going to attempt to release a new movie every year after 2015.  Disney bought up Marvel years ago, but now the rights other studios had to Marvels hit franchises (X-Men, Spiderman, Daredevil) are set to expire.  If all goes well Disney is going to have an extremely profitable next couple of years, and they want to keep a lot of that revenue to themselves.

Despite AMC’s loud objection to any price changes over a week ago, it was reported yesterday that AMC and Disney reached an agreement.  Since the deal’s details have not been made public, one can only assume that AMC probably didn’t win this one since they were up against a company that technically has one of the world’s largest naval fleets because of their insane amount of cruise ships.

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Investment News: Gold Prices Fall, Investors Predict the End of Days

Swim now Scrooge, your day of judgement shall come soon enough

Have you heard the old saying about “sure things” in the world of investment, and how that there is no such thing as a sure investment?  There technically isn’t anything that’s a sure thing when you’re in the investing game, but there are a few things people consider “sure things” because they clearly don’t want to listen to the advice of others.  Gold is one of those mythical sure thing investments, since it’s played such a big roll currency values and in electronic manufacturing a lot of people invest in it because they can’t image a time where it wouldn’t be a valuable commodity.

Today was gold traded at its lowest price in two years.  The low value was surprising, but it certainly doesn’t mean that gold is going to lose its value over night.  Gold closing at $1477 doesn’t signal the end of the world, but if you tell that to gold investors you’re probably going to get a punch to the face followed by a stream of frenzied screaming.  Some people aren’t taking the news well, and they’re predicting a future slump in gold prices.

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Cyprian Financial Crisis 2: Electric Boogaloo

You’re welcome.

It’s time to praise your economic gods, after days of tension the EU and the IMF have finally reached a deal to help bail out Cyprus.  On late Sunday/early Monday (kind of depends on which timezone you’re in) the powers that be approved a 10 billion euro (about $13 billion in dollars) plan that’s going to temporarily bring some big changes to the country.  Cyprus will be shutting down its second largest bank Laiki, and will be putting deposits under 100,000 euros into the Bank of Cyprus in hopes of creating a less awful bank.

Curious about what will happen to the bank’s larger deposits?  Deposits that are over 100,000 euros from both the Bank of Laiki and the Bank of Cyprus will be temporarily frozen and used to take care of the nation’s debts and to recapitalize the Bank of Cyprus.  By tomorrow the nation’s banks should be fully functioning, but it’ll be an extremely regulated functioning.  Some people wonder if Cyprus’ crisis will be the straw that broke the euro camel’s back.  Others wonder if this bail out deal will be the model for other European bail outs.  It’s too early to tell what far reaching affect the bail out deal will have, but there is one thing that’s certain in these uncertain times: the citizens of Cyprus are still pretty much screwed.

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