Los Angeles Times - 07.08.2019

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WEDNESDAY, AUGUST 7, 2019:: LATIMES.COM/BUSINESS

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Tom Barrack’s route to

becoming one of the most in-

fluential people in America

has been to help everyone he

could, and ask for little in re-

turn.

As a private equity in-

vestor, Barrack appeared to

break every rule. The found-

er of Colony Capital let

wealthy friends in on lucra-

tive deals, such as the take-

over of the Miramax film em-

pire, which he completed

with “The West Wing” star

Rob Lowe. He kept celebri-

ties out of bankruptcy, help-

ing Michael Jackson avoid

eviction from his Neverland

ranch, and coming to the aid

of photographer Annie Lei-

bovitz. When Harvey Wein-

stein fell from grace amid al-

legations of serial sex abuse,

Barrack tried to buy his

movie studio.

His talent for sealing

property deals cemented

lasting associations with ev-

eryone from Middle Eastern

royals to a flamboyant New

York real estate developer

on course for high office.

Since Donald Trump be-

came president, Barrack

has enjoyed a direct line to

Washington, capping a

three-decade career in

which he shuttled by private

jet among real estate deals

and a California estate

where he makes wine and

plays polo. “Karma really

works,” Barrack said some

years ago. “It works, eventu-

ally.”

But karma cuts both

ways, and last week a con-

gressional report identified

Barrack as a key figure in a

raft of initiatives that “virtu-

ally obliterated the lines nor-

mally separating govern-

ment policymaking from

corporate and foreign inter-

ests.” Drawing on private

emails and text messages

with business executives, di-

plomats and White House

insiders, including Trump’s

Trump ally’s many dealings under scrutiny

TOM BARRACKchaired President Trump’s inaugural committee. He has en-

joyed a direct line to Washington and beyond after years of doing favors and deals.

Brian van der BrugLos Angeles Times

Congressional report

says Tom Barrack

crossed lines with his

private diplomacy.

By Mark Vandevelde

[SeeBarrack, C6]

Walt Disney Co.’s pur-

chase of 21st Century Fox

was meant to help the enter-

tainment giant transform

itself for the streaming fu-

ture. But the newly acquired

Fox businesses have caused

some early challenges for the

Mouse House.

Disney earnings fell well

short of Wall Street esti-

mates in the third quarter,

dropping 28% from a year

ago, partly because of the

worse-than-expected per-

formance of Fox assets, in-

cluding the movie studio

that produced the recent

box office flop “Dark

Phoenix.”

Burbank-based Disney

also continued to spend big

on streaming services such

as Disney+, which the com-

pany believes is key to its

ability to compete for years

to come. The firm also took

full operational control of

money-losing streaming

platform Hulu, which fur-

ther eroded profit.

Disney is spending heav-

ily on streaming services

ESPN+ and Disney+, which

is expected to launch in No-

vember. On a call with ana-

lysts, Disney Chief Execu-

tive Bob Iger said the com-

pany will offer consumers a

bundle of Disney+, ESPN+

and a version of Hulu for

$12.99 a month.

Disney earned $1.35 a

share on revenue of $20.

billion during the quarter

that ended June 29, the com-

pany said Tuesday. That

compared with $1.87 a share

on revenue of $15.23 billion

during the same period last

year.

Analysts had predicted

earnings of $1.72 a share and

sales of $21.45 billion in the

quarter.

Disney shares dropped

as much as 5.8% in after-

hours trading after the earn-

ings report was released.

The shares closed Tuesday

at $141.87, up 3% for the day

and about 30% this year.

The results reflected the

first full quarter of earnings

since Disney completed its

DISNEY’S

PROFITS

FALL 28%,

MISSING

TARGETS

Newly acquired Fox

assets damp results as

company continues to

invest in streaming.

By Ryan Faughnder

[SeeDisney,C3]

When Paris-based luxury

conglomerate LVMH an-

nounced its new partner-

ship with Stella McCartney

last month, many of the spe-

cific details were kept under

wraps, but one of the biggest

— specifically what made

the eco-conscious, London-

based fashion designer an

attractive partner in the

first place — was not one of

them.

“A decisive factor was

that she was the first to put

sustainability and ethical is-

sues on the front stage, very

early on, and built her

[h]ouse around these is-

sues,” LVMH Chairman and

CEO Bernard Arnault said

in the announcement. “It

emphasizes LVMH Group’s

commitment to sustainabil-

ity.”

That move came on the

heels of last month’s Ralph

Lauren announcement of a

slate of ambitious do-gooder

goals including using 100%

sustainably sourced key ma-

terials by 2025, increasing fe-

male representation in fac-

tory management by 25% in

the same time frame, and

having greenhouse gas re-

duction targets in place by

the end of next year.

The month before that, it

was French luxury group

Kering — a partner in Mc-

Cartney’s label until early

last year — making head-

lines with the announce-

ment that its fashion houses

(Gucci, Balenciaga and

Saint Laurent among them)

would only hire models age

18 and older for its runway

shows starting next year.

Also in May, Prada and the

Humane Society issued a

joint statement declaring

that the Italian luxury

DESIGNERStella McCartney acknowledges the audience at her show in Paris in March. She has a new part-

nership with luxury conglomerate LVMH, which said the deal emphasizes its “commitment to sustainability.”

Philippe LopezAFP/Getty Images

High fashion gets woke —

with some help from Gen Z

Fur is out, social causes are in as chic brands court young buyers

By Adam Tschorn

BRANDShave embraced social justice and other

on-trend causes. Above, viewers attend a 2013 show.

Stephen LovekinGetty Images

[SeeFashion,C5]

The most
perplexing
aspect of our
current de-
bate over
healthcare
and health
coverage is
the notion
that Ameri-
cans love their health insur-
ance companies.
This bizarre idea sur-
faced most recently in the
hand-wringing over propos-
als to do away with private
coverage advocated by
some of the candidates for
the Democratic nomination
for president. Oddly, this
position has been treated as
a vote-loser.
During the first round of
televised debates on July 30
and 31, only four of the 20
candidates raised their
hands when asked if they
would ban private insurers
as part of their proposals for
universal coverage: Sens.
Elizabeth Warren of Massa-
chusetts, Bernie Sanders of
Vermont and Kamala Har-
ris of California, and New
York Mayor Bill de Blasio.
Harris later backed away,
releasing a “Medicare for
all” proposal that would
accommodate private insur-
ers at least for the first 10
years.
She should have stood
her ground. The truth is
that private health insurers
have contributed nothing of
value to the American
healthcare system. Instead,
they have raised costs and
created an entitled class of
administrators and execu-
tives who are fighting for
their livelihoods, using
customers’ premium dollars
to do so.
“Health insurers have
been successful at two
things: making money and
getting the American public
to believe they’re essential,”
says Wendell Potter. He
should know, since he spent
decades as a corporate
communications executive
in the industry, including
more than 10 years at Cigna.
The insurers’ success in
making themselves seem
essential accounts for the
notion that Americans are
so pleased with their private
coverage that they’ll punish
any politician who dares to
take it away. But the Ameri-
can love affair with private
insurance warrants close
inspection.
Let’s start by examining
what the insurers say are
their positive contributions
to healthcare. They claim to
promote “consumer choice,”
simplify “the healthcare
experience for individuals
and families,” address “the
burden of chronic disease”
and harness “data and
technology to drive quality,
efficiency, and consumer
satisfaction.” (These claims
all come from the website of
the industry’s lobbying
organization, America’s
Health Insurance Plans.
They’ve achieved none of
these goals. The increas-
ingly prevalent mode of
health coverage in the group
and individual markets is
the narrow network, which
shrinks the roster of doctors
and hospitals available to
enrollees without heavy
surcharges. The hoops that

Let’s end

private

health

insurance

MICHAEL HILTZIK

[SeeHiltzik,C4]

Real estate firm

buys studio site

The Manhattan

Beach deal expands

Hackman Capital’s

production assets. C

Credit card

rates at a high

Cardholders are

paying the steepest

rates in 25 years, and

a Fed cut may not

bring much relief. C