Wednesday, March 25, 2015

Move Over, Mall of America: Bigger Extravaganza Planned in Miami

More than four years ago, I wrote about how Miami would be one of the most popular cities on the planet; check out the developments being planned. Aivars Lode

Canadian developer would build U.S.’s biggest mall—including hotel, amusement park and sea-lion show

By Robyn A. Friedman 

Most shopping-mall operators are shying away from new construction, especially as e-commerce cuts into foot traffic. Apparently a Canadian firm doesn’t have the same concerns: It aims to build not only a new mall, but the biggest mall in the U.S.
The project, called American Dream Miami, was unveiled last week by Edmonton, Alberta-based Triple Five Group, which also owns Minnesota’s Mall of America.
At 4.2 million square feet and 520 stores, the Mall of America is considered the nation’s largest shopping destination. But in a statement last week, Triple Five said its Florida project “will exceed our other world famous projects in all respects.”
Executives at Triple Five declined to comment, but Miami-Dade County’s mayor said the project would cost about $4 billion. In addition to the retail space, the mall would include a ski slope, a water park, a sea-lion show, miniature golf, bowling, a submarine ride, restaurants, a performing-arts theater, a cinema, a Ferris wheel, an ice rink and a roller-coaster ride as well as hotels and condominiums.
The development would be built in an unincorporated part of the county, northwest of the city center.
If its plans seem like a tall order, consider this: Triple Five isn’t the only real-estate developer that has recently added retail in the Miami area or is in the process of doing so. 
Scheduled for completion at the end of 2015, Midtown Doral, under development by Optimus International Developers, will bring 300,000 square feet to the greater Miami area. At Brickell City Centre, considered the financial district of Miami, Hong Kong developer Swire Properties will deliver 565,000 square feet of retail space anchored by Saks Fifth Avenue in the fourth quarter of 2016. The Mall at Miami Worldcenter, in the heart of downtown, will complete 765,000 square feet of restaurant, retail and entertainment space by 2017.
Whether Miami can support such a large amount of new retail space is a question. Some brokers say Miami’s retail market is strong and that while e-commerce has put a damper on retail growth in other locales, Miami has been little-affected.
That’s in part because of population growth. According to the Miami Downtown Development Authority, Miami’s downtown population alone has doubled from 40,466 in 2000 to 80,750 in 2014, and it is forecast to hit 92,519 by 2019. More broadly, the entire county grew to nearly 2.5 million residents in 2010, according to Census figures, from just over 2.25 million in 2000.
Miami also can count on a constant stream of tourists, many from Latin America, who come there to shop, analysts say.
“Miami for years was under-retailed,” said Jim Fried, managing director of Aztec Group Inc., a real-estate investment-banking firm in Miami. “I think there will be enough growth to support the additional retail.
Not everyone is so sure. Even though demand for Miami condos has been strong, many buyers are from Latin America or Canada and aren’t permanent residents. Others may not have the financial means to support the onslaught of luxury retail. Average incomes in Miami are lower than in New York, Los Angeles and San Francisco, other cities with lots of new pricey condos.
“A lot of the owners will live here only two or three months out of the year, and the rest of the time the place will sit empty,” said Jack McCabe, a housing industry analyst in Deerfield Beach, Fla. “Or they will rent the units out to people who are trying to make ends meet to live in downtown Miami and who don’t have the disposable income to support the retailers.”
What to Find at American Dream Miami?
  • ski slope
  • water park
  • sea-lion show
  • miniature golf
  • bowling
  • submarine ride
  • restaurants
  • performing-arts theater
  • cinema
  • Ferris wheel
  • ice rink
  • roller-coaster ride
  • hotels
  • condominiums 
But Triple Five is betting not only on strong retail demand and population growth, but also on a new model for retail real estate: shopping centers paired with entertainment, residential and hotel facilities, all located at the same property.
Such amenities are by nature risky, however, and can lead to delays and cost overruns. Case in point: Triple Five’s American Dream Meadowlands project, a 2.8-million square-foot retail and hotel complex near MetLife Stadium in New Jersey. Triple Five agreed to buy the half-finished project, which also features an indoor ski slope and a giant Ferris wheel, in 2010, and had hoped to complete it by 2013. The $4 billion project still has yet to secure financing amid a swelling budget and delays in getting local government approvals. 
Questions also remain about whether Triple Five can obtain financing for the American Dream Miami. Still, city managers are bullish. “This project will be the largest in Miami-Dade history,” said Carlos A. Gimenez, the county mayor. “We are supportive of it but it still has to go through all of the regulations and environmentals before it can come to fruition.”
—Robbie Whelan contributed to this article

Monday, March 23, 2015

Sony Joins Crowd of Online TV Providers

More changes in the cable TV business. Aivars Lode

TOKYO—Sony Corp. is ramping up its online TV efforts in the U.S., but will face competition from a number of other companies targeting consumers who don’t have pay-television service.
Andrew House, president of Sony Computer Entertainment, said Wednesday that the company would start commercial operation of the service, called PlayStation Vue, within two weeks in New York, Chicago and Philadelphia, following invitation-only tests in those cities. The company plans to roll out the new service nationwide by the end of this year.
Vue is one of several new U.S. services aimed at “cord cutters,” people who have spurned traditional pay-TV services in favor of other forms of entertainment. PlayStation Vue will compete, for example, with Dish Network Corp.’s recently introduced Sling TV, which operates via a range of streaming devices.
Individual TV networks have also been rolling out subscription streaming services, including CBS Corp. and Viacom Inc.’s Nickelodeon. CBS Chief Executive Leslie Moonvestold an investor conference Wednesday that its service has more than 100,000 subscribers, though he declined to give an exact figure. 
This week, Time Warner Inc.’s HBO said it would roll out its stand-alone streaming offering, “HBO Now,” in time for the season premiere next month of its hit “Game of Thrones.”
The challenge for media companies as they roll out these services is to target “cord cutters” and “cord nevers”—young people who never intend to get a pay-TV connection—without enticing existing customers to switch over from traditional services. That would cannibalize the hugely profitable pay-TV business that has driven the profits of every major media conglomerate in recent years.
A number of TV providers have made channels available for PlayStation Vue, including CBS, Viacom, Comcast Corp.’s NBCUniversal and 21st Century Fox. News Corp, owner of The Wall Street Journal, and 21st Century Fox were until mid-2013 part of the same company.
Sony sees Vue, which currently operates via PS3 and PS4 game consoles, as a way to broaden the appeal of the hardware beyond hard-core gamers. Vue is one of several new features on Sony’s PlayStation Network, including a music streaming service from Spotify AB that replaces Sony’s own music offering.
Sony hasn’t announced pricing of Vue, which the company also plans to make available via Apple iPads. A basic Sling TV package costs $20 a month.
Discussions with other content providers are “ongoing and are moving forward positively,” Mr. House said in an interview. He declined to discuss potential partners, but one big holdout is Walt Disney Co., whose ESPN sports network is popular with a young, videogame-playing demographic.
“We are in discussions but there is nothing to announce at this time,” said an ESPN spokeswoman.
Mr. House said that “even absent ESPN, we are very confident that we have a very robust offering in the sports area with existing partnerships.” PlayStation Vue’s current lineup includes Fox Sports, 21st Century Fox’s sports channel.

Sunday, March 22, 2015

U.S. Is Seeking Billions From Global Banks in Currency Manipulation Settlement

As discussed here many years ago, now the US government is suing the big banks for currency manipulation. Aivars Lode

By Keri Geiger and Greg Farrell
(Bloomberg) -- The U.S. Justice Department is seeking about $1 billion each from global banks being investigated for manipulation of currency markets, according to two people familiar with the talks. 
The figure is a starting point in settlement discussions, with some banks being asked for more and some less than $1 billion. One bank that has cooperated from the beginning is expected to pay far less, one of the people said. Penalties of about $4 billion are on the table, according to one of the people, though the number could change markedly. 
Banks are pushing back harder than in some previous negotiations, including those for mortgage-backed securities, and the final penalties could be lower, people close to the talks said. 
The discussions, which have begun in earnest in recent weeks, could lead to settlements that would resolve U.S. accusations of criminal activity in the currency markets against Barclays Plc, Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and UBS Group AG. The government has also said it is preparing cases against individuals. 
Peter Carr, a Justice Department spokesman, declined to comment, as did spokesmen for the banks. 
Prosecutors are also pressing Barclays, Citigroup, JPMorgan and the Royal Bank of Scotland to plead guilty, people familiar with the matter have said. 
In the worldwide investigation into currency-rigging, six banks have already agreed to pay regulators about $4.3 billion. 
The Justice Department’s move signals that investigations are giving way to wrangling over issues such as whether the banks plead guilty to antitrust or fraud charges, what behaviors the banks will admit to in settlement documents and how much they will pay. 

Bolstering Reserves 

Barclays reserved 750 million pounds ($1.1 billion) for the currency settlement in the fourth quarter, bringing its total to 1.25 billion pounds. RBS took a 1.2 billion-pound charge in the same period for conduct and litigation, including a 320 million-pound provision for U.S. currency-rigging probes. 
JPMorgan Chase set aside an additional $1.1 billion, pre-tax, for legal expenses in the fourth quarter, without breaking out an amount for the currency settlement. Citigroup added $2.9 billion in the fourth quarter, in part to resolve foreign-exchange probes. 
UBS set aside 176 million francs ($175 million) for legal charges in the fourth quarter, after allotting 1.84 billion Swiss francs the previous quarter. 
Final settlements often vary significantly from the Justice Department’s initial demands as both sides hammer out an agreement over weeks or even months. During settlement talks for BNP Paribas SA over sanctions violations, penalties ranging from $3.5 billion to $15 billion were floated, according to a person familiar with the discussions. The bank ultimately agreed to plead guilty and pay $8.97 billion. 

Singled Out 

U.S. prosecutors are seeking a simultaneous settlement with the banks, which would enable the lenders to avoid being singled out for industrywide conduct, people familiar with the matter have said. 
The Justice Department had long shied away from seeking guilty pleas from banks over concerns criminal convictions could roil financial markets. However, markets shrugged off guilty pleas last year from Credit Suisse Group AG over helping Americans evade taxes and BNP over sanctions violations. 
UBS, which was the first bank to notify U.S. authorities of possible misconduct in the foreign-exchange market, has been granted immunity from prosecution for antitrust violations, a person familiar with the matter has said. 
As talks to resolve the U.S. cases advance, the Justice Department and New York’s state banking regulator have opened up a new investigation into whether banks abused a longstanding practice in the currency spot markets known as “last look.” The practice allows banks to back out of unfavorable trades at the last moment.

Dish Network Unveils Streaming Service That Includes ESPN

More disruption in the digital media space as more and more users cut the cable TV cord. Aivars Lode

Sling TV to Cost $20 a Month; Won’t Carry NBC or CBS

By Shalini Ramachandran and Don Clark 

LAS VEGAS—Dish Network Corp. introduced a new online video service Monday that includes the popular sports network ESPN, culminating a three-year effort to create an inexpensive streaming TV service to reach a younger generation of viewers.

The satellite TV provider said the service, dubbed Sling TV, will launch in January at $20 a month and won’t require a contract or commitment. The app will be available to consumers who aren’t currently Dish subscribers. 
At launch, Dish said the new service will carry channels of both live and on-demand content from partners that include ESPN from Walt Disney Co., TNT from Time Warner Inc., and Food Network from Scripps Networks Interactive Inc. 
The inclusion of ESPN could be especially significant, marking one of the cheapest ways that so-called cord-cutters, who shun conventional TV services, can tap into the channel’s trove of live sports programming. ESPN is a key selling point for cable and satellite TV providers, and the most expensive cable channel to carry.
Dish’s service also will offer Web videos from Maker Studios, one of the biggest producers of programming on YouTube.
But notably missing are big channels like NBC, CBS, Nickelodeon, Fox and Discovery, from Comcast Corp.’s NBCUniversal, CBS Corp., Viacom Inc.,21st Century Fox and Discovery Communications Inc.
Some of those companies have been reluctant to license their networks for the new service because Dish wants just a subset of their popular channels, rather than the whole bundle, including lesser-watched channels. They fear that striking such a deal could undercut the current, lucrative pay-TV model.
Still, consumers can pull network TV channels like NBC and CBS out of the airwaves using an antenna. 
Another sticking point: Dish has proposed to relegate broadcasters Fox, CBS, ABC and NBC to a separate tier that would cost consumers more, a move that would flip on its head the longtime practice of cable and satellite operators offering broadcast networks in their lowest-cost packages.
Still, Dish’s ability to reach deals with even some major TV programmers shows a shift in thinking over the past year in the TV industry. In November 2013, Dish Chairman Charlie Ergen said he was “0 for 50” in talks with content company CEOs.
But that has changed as more people are dropping their pay-TV subscriptions, and declining ratings for many major TV networks are forcing media companies to look for new routes to grow in a mature business.
Dish maintains that its aim is to increase revenue for all parties involved, rather than chip away at the existing model. Chief Executive Joe Clayton, at a news conference at CES, said the service should expand its audience by reaching millennial consumers rather than cannibalize its existing business. 
“Why? Because we don’t reach them today,” Mr. Clayton said.
Dish believes it can aim its service narrowly at cord-cutters and “cord nevers”—younger consumers who have never paid for television. To that end, the service will only allow one stream per subscription at any given time, to limit its appeal for families with varying tastes among members. Curbing simultaneous streams would also deter households from sharing subscriptions. 
Unlike traditional satellite or cable TV, Dish’s new service won’t require customers to wait for technicians to visit the house and install equipment; it’ll be instantly available as an app on popular devices that can stream video.
Customers also can cancel their subscriptions any time, and Dish says it won’t require contracts or credit checks that are typically required when signing up for pay TV.
The service will be available on a number of devices, including tablets, smartphones, computers, gaming consoles and devices from companies like Roku Inc., Microsoft Corp.—with its Xbox videogame console—and Inc. that stream video to TV sets.
While the service won’t have a digital video recorder, a replay feature will allow viewers to watch many of the shows that have aired in the past three days on demand. Dish says viewers will be able to pause, rewind and fast forward most live channels and on-demand content. The satellite provider hinted at additional deals to come for children’s and news genre programming.
Streaming TV is a crowded field. Netflix Inc., Amazon and Hulu already stream shows from many of the networks Dish will carry. Sony Corp. launched an online version of pay TV late last year, complete with a cloud-based digital video recorder. Meanwhile, TV networks like HBO plan to release their own stand-alone streaming services this year.
Roger Lynch, Dish’s executive vice president of advanced technologies who was named chief executive of Sling TV LLC, said the new service will be promoted with an ad campaign under the slogan “Take Back TV.”
Sling TV has no direct connection to Sling Media, which was purchased by EchoStar Corp. in 2007, that makes the Slingbox streaming device. EchoStar is Dish’s sister company, also controlled by Mr. Ergen.
Among other CES announcements, Dish said it would begin offering a new set-top box that is specifically designed to carry the new Ultra HD, or 4K, content that some of the latest televisions support.

U.S. Airlines Battling Gulf Carriers Cite Others’ Experience

Interesting how the Aussies had to deal with the middle east airlines' encroachment back in 1996 and this is just now representing the same issue here in the USA. Aivars Lode

Air Canada Strained Diplomatic Ties While Lufthansa Lost Traffic

By Susan Carey 

To understand why leading U.S. airlines are mounting a political campaign against growing competition in their markets from Persian Gulf rivals, look at the experiences of flagship airlines in Canada, Germany and Australia.
Canada has so far contained the Gulf trio’s growth, to the benefit of Air Canada—though its efforts have strained diplomatic ties. German carrier Deutsche Lufthansa AG, which has lost significant traffic to Gulf rivals, is asking the European Union for help in leveling the playing field. Australia’s Qantas Airways Ltd. chose to cooperate rather than fight, forging an alliance with Emirates Airline in 2013.
The U.S. government is considering a new request for help from American Airlines GroupInc.,United Continental Holdings Inc. and Delta Air Lines Inc. The U.S. carriers want Washington to limit expansion by Emirates, Etihad Airways and Qatar Airways, alleging the growth is unfairly fueled by subsidies from the Gulf airlines’ state owners.
Etihad, Emirates and Qatar insist that they are profitable companies that aren’t subsidized and that they offer Americans access to cities around the globe that U.S. airlines ignore. The chiefs of Emirates and Etihad are expected to address the dispute in separate speeches in Washington on Tuesday.
Supporters say the Gulf airlines are simply emulating a strategy pioneered decades ago by other carriers with small home markets, including Singapore Airlines and KLM Royal Dutch Airlines: Build a big home airport and scoop up international traffic between other countries’ airports via that hub.
The Gulf three have accomplished this in record time, developing hubs that easily connect travelers between Asia Pacific and Europe or North America. They recently began adding U.S. flights—they now collectively serve 10 U.S. airports—and their available seats have more than doubled since 2009. By choice, Delta and United each operate just one daily round trip to Dubai.
Air Canada is “aligned on most if not all of the points” the U.S. carriers are making about the Gulf trio, said Benjamin Smith, the Canadian flagship’s president of passenger airlines. “It’s a very serious issue.”
Canada’s air treaties with Qatar and the U.A.E. are more restrictive than the U.S.’s “open skies” accords. They have enabled Canada to limit the Gulf carriers to three round-trip passenger flights a week each. Some in Ottawa believe that number already far exceeds actual demand for travel to the Middle East and includes Canadians traveling beyond the Gulf. Air Canada doesn’t fly to the region, but it intends to start thrice-weekly service from Toronto to Dubai in November.
The U.A.E. showed displeasure with the lack of expansion in 2010. Its then-ambassador to Ottawa said it was “frustrating” that five years of negotiations hadn’t increased flights. “The fact that this has not come about undoubtedly affects the bilateral relationship,” the envoy said.
Within days, Canada’s then-defense minister said his nation would abide by the U.A.E.’s wishes and withdraw from a military base near Dubai that Canada was using as a staging area for the war in Afghanistan. Canadian officials decline to say whether the air talks were linked to the base closure. Soon after, the U.A.E. began requiring Canadian travelers to apply for pricey visas when they visited, a rule later rescinded.
U.A.E. officials in Abu Dhabi didn’t respond to requests for comment. The U.A.E. embassy in Ottawa said the ambassador was unavailable. Its embassy in Washington said the liberal U.S.-U.A.E. air treaty has supported a successful economic and trade relationship between the two countries and generates new flights that are creating thousands of U.S. jobs. It also noted that its two airlines are the largest buyers of Boeing Co. jets in the world. 
Emirates remains interested in expanding in Canada, but it leaves that up to the Canadian and U.A.E. governments, a spokeswoman said. Etihad said it would be improper to comment on government-to-government issues, although it entered a code-sharing agreement with Air Canada in 2013.
Canada’s government says only about 2% of its international traffic is covered by air treaties that contain constraints. “What we are not supportive of is deals where the balance of benefits is heavily skewed to one party,” said Air Canada’s Mr. Smith. The Gulf carriers “aren’t creating new trips,” he added. “They’re just transferring traffic.”
In Germany, whose air treaties with Gulf states are more expansive, the Middle East carriers now offer 181,000 monthly seats on 529 flights from five German cities to their home airports. Etihad also owns 29% of Air Berlin, a rival of flagship Lufthansa. Air Berlin offers more flights to Abu Dhabi alone than Lufthansa operates to all three Gulf destinations.
Lufthansa said its Frankfurt hub has lost nearly a third of its market share on routes between Europe and Asia since 2005, with more than three million people now flying annually from Germany to other points via Persian Gulf hubs. Lufthansa said it is responding in part by cutting flights, including Munich-Singapore, Frankfurt-Hyderabad, India, and, coming next month, Frankfurt-Abu Dhabi.
Jens Bischof, Lufthansa’s chief commercial officer, says the market-share erosion will affect its United and Air Canada partners because Lufthansa won’t be able to offer as many connections to North American customers who change planes in Germany en route to points in Europe, Africa and South Asia.“The phenomenon we see here in Europe is more and more affecting the U.S.,” Mr. Bischof said.
In December, Lufthansa and Air France-KLM SA asked the European commissioner for transport to press the Cooperation Council of the Arab States of the Gulf to agree to “fair competition” provisions for current and future air treaties. Without that, Lufthansa and Air France said in a letter, “both the economic and strategic role of European aviation will be permanently impaired.”
The European Commission said that it has met twice with the six-nation Gulf council and that a third meeting is envisioned this spring. The EU intends to lay out its aviation strategy by year-end and will seek public comment on provisions related to fair competition.
The Emirates spokeswoman said the airline has long seen potential for adding cities such as Berlin and Stuttgart, but it respects the German government view that more service “is currently deemed unnecessary.”
Australia was an early expansion point for Emirates, which started serving Melbourne in 1996. Qantas—hampered by high costs and a market-share battle with Virgin Australia Airlines, which is 22% owned by Etihad—teamed up with Emirates. The deal has helped stabilize Qantas’s finances and end losses on international routes as the airline halted unprofitable flights to Europe via several Asian transit points and concentrated on promising markets in North Asia and North America.
Still, the Gulf buildup is changing travel patterns. In March, the trio offered 434 flights and 166,000 seats to their hubs from five Australian cities. Qantas has 31,000 seats on 60 flights from two Australian cities to Dubai. Both go on to London, the airline’s sole European destination.
Qantas CEO Alan Joyce, speaking in February when the company announced interim results, said his airline is receiving high consumer ratings for its “Dubai hub” and the increased range of destinations it now offers in Europe through the Emirates partnership. The deal also allows Emirates customers to fly to smaller Australian cities on Qantas’s domestic network.