Pension fund agency in $34B hole
WASHINGTON, Nov. 17 (UPI) -- The federal safety net for pension plans for private U.S. companies said its budget deficit hit a record $34 billion as of the end of its fiscal year.
The Pension Benefit Guaranty Corp., which takes over private sector pension plans when they fail, has asked Congress to allow it to set its own premiums, "the way other government and private insurers do," agency Director Joshua Gothbaum said in a statement.
Congress has rebuffed PBGC's request to set its own premiums in the past, as this would raise the cost of the pension protection, which might force some businesses to close or to give up on their pension plans, The Washington Post reported Saturday.
Congress, which determines rate hikes for the agency, has not raised PBGC rates in recent years, the Post said.
The agency is funded by insurance premiums, investments on $85 billion worth of assets and funds absorbed from bankrupt companies.
PBGC assets grew by $4 billion during the past fiscal year but its long-term liabilities grew by $12 billion.
"PBGC may face for the first time the need for taxpayer funds. That is a situation no one wants," Gothbaum said.
The deficit comes as an increasing number of Americans are concerned about retirement. A recent study by the Boston College Center for Retirement Research found 53 percent of Americans have retirement plans that will not support their current standard of living.
Netflix CEO expects proxy battle
NEW YORK, Nov. 17 (UPI) -- Netflix Chief Executive Officer Reed Hastings said he expects activist investor Carl Icahn will mount a proxy battle with the U.S. entertainment provider.
"Will he run a proxy? Probably," Hastings told The Wall Street Journal.
Icahn, a billionaire with a history of buying into companies and replacing board members with his own representatives, revealed in late October he had purchased 10 percent of Netflix for about $60 per share.
The Hollywood Reporter said Saturday Icahn has acknowledged the value of Netflix as a takover target. The company "makes a great acquisition candidate because of their subscription base," Icahn said.
Hastings acknowledged the size of Netflix, with a market capitalization under $100 billion, makes it a takeover target and said Amazon.com is a possible buyer.
"Amazon is the best competitor we've ever faced," Hastings said.
He estimated Amazon could be losing as much as $1 billion per year with free streaming for subscribers to its Prime discount shipping service.
However, Hastings also said Netflix could stand on its own feet and was ready to expand its business internationally without help from Icahn.
"The question is: Is that the right thing in the long term?" Hastings said.
Report: Tribune names Peter Liguori CEO
CHICAGO, Nov. 17 (UPI) -- The new owners of media giant Tribune Co. have chosen Peter Liguori as their top executive, a source told the Chicago Tribune.
The Tribune reported Saturday that Oaktree Capital Management, Angelo, Gordon & Co., and JPMorgan Chase could take over Tribune company by the end of the year after the company spent four years in bankruptcy.
One of the group's first decisions will be to name members of the company's board and its executive staff, the Tribune said. However "the decision has been made," to name Liguori as chief executive officer, a source told the newspaper.
Liguori is a member of the board at Yahoo Inc., MGM Holdings Inc. and Topps Co., and is credited with turning cable channel FX into an entertainment giant during a stint at Fox Broadcasting, which is owned by News Corp.
"FX was a channel when he took over -- a little, tiny cable channel losing a bunch of money. He made it into something big by imagining something different, and I think that's what Tribune needs," said Jeff Shell, president of NBCUniversal International in London, who worked with Liguori at Fox for six years and was considered a candidate to take over the Tribune Co.
Shell said he considered Liguori "a very, very smart hire for Oaktree and the guys that run the company because I think what Tribune needs more than anything is somebody to kind of build the brands back and make it a true media company, as opposed to just a collection of businesses."
Tribune owns several major U.S. newspapers, including the Chicago Tribune and the Los Angeles Times. It also runs a collection of television stations.
One of the new CEO's first decisions will be whether Tribune Co. should hold onto its newspapers, given the industry's struggles to keep up with competition from the Internet.
Liguori was president of entertainment for Fox Broadcasting Co. from 2005 to 2009. He then took the position of chief operating officer at Discovery, where he helped launch the Oprah Winfrey Network.
After ascending to CEO of OWN, he was bumped out when Winfrey decided to make herself CEO.
Kucinich: End U.S. junk food subsidies
WASHINGTON, Nov. 17 (UPI) -- U.S. Rep. Dennis Kucinich, D-Ohio, challenged members of Congress this week to end tax deductions for companies that sell junk food to children.
"Did you know that we're actually giving tax deductions out to big companies that go ahead and advertise and market products that contribute to childhood obesity?" Kucinich asked in a floor speech on the day that Hostess Brands filed in bankruptcy court for permission to liquidate the company.
Kucinich introduced a bill ending deductions for junk-food companies and said such a move would help avoid the so-called fiscal cliff, The Hill reported Saturday.
Economists have warned the budget plan agreed to in 2011 -- allowing the debt ceiling to be raised in exchange for spending cuts and an end to tax rate cuts enacted during the administration of former President George W. Bush -- would send the economy over a "fiscal cliff."
The combination of spending cuts and higher tax rates would put the recovering economy back into a recession, economists have warned.
Hostess Brands is the maker of Twinkies, Ho-Hos and Wonder Bread. It said this week it does not have the resources to weather a strike by 5,000 bakers that has temporarily closed its production facilities.
"So what I'm doing is introducing a bill right now that would protect children's health by denying any deduction for advertising and marketing that's directed at children to promote the consumption of food at fast-food restaurants or any kind of food of poor nutritional quality," Kucinich said.
"When this bill becomes law, if it's adopted in the negotiations to avoid a fiscal cliff, we can find a way not only to reduce childhood obesity by blocking these deductions for the advertising, but we can also enable our children's health to be put on a better path, and our country's health to be put on a better path," he said.
