News alert: Derek Gordon dies
Derek Gordon, who took a medical leave from his duties as CEO of the Arts Council of Greater Baton Rouge less than two months ago, has died. BRAF President and CEO John Davies confirms that Gordon, 57, died this morning, and says that he leaves a "incredible" legacy behind. "It's a monstrous loss to our community," says Davies, who was among those who helped bring Gordon back to his native Baton Rouge to take over as CEO of the arts council in July 2006. "He came from the Jazz at Lincoln Center and before that was at The John F. Kennedy Center for the Performing Arts. He wanted to come back to Baton Rouge and contribute to his home after coming from the national and international stage, which really speaks to his personality." No further details on Gordon's death were immediately available. On July 19, the arts council announced Gordon was taking leave due to complications following an eye surgery, and Kathy Scherer was appointed acting director. Read Daily Report PM for more. —Steve Sanoski
Report: La. posts biggest increase in per-student higher education spending since '86
Despite cutbacks in higher education spending in recent years, Louisiana has spent an average of $77 more per student each year—the most of any state over the past 25 years—according to a new report from a nonprofit group tracking state funding of higher education. The report, by the State Higher Education Executive Officers group, says Louisiana was also one of only 10 states to post an increase in per-student spending since 1986. Louisiana's per-student spending peaked in 2008 at $8,165; it bottomed out in 1995 at $4,911. Since 2008 the state has scaled back its spending on higher education, and in 2011 spending was at $6,904 per student. Neal McCluskey of the Cato Institute tells American Public Media—which is highlighting the report today with an interactive map—that state involvement with higher education is the reason college costs are escalating so quickly. He says that because the federal government provides grants and loans to prospective students, colleges and universities have an incentive to raise tuition to capture that cash. Read the full story and explore an interactive map with info on all U.S. states' spending per student here.
BP selling some Gulf oil properties to Houston firm run by LSU grad
BP announced this morning that it's selling some deepwater Gulf of Mexico oil and gas properties to Houston-based Plains Exploration & Production Co. for approximately $5.55 billion. For BP, which announced in May it was looking to shed some "non-strategic" assets in the Gulf, the deal is a big step toward recovering the cost of its oil well blowout in the Gulf two years ago and concentrating on investments elsewhere. The companies report the properties sold were producing the net equivalent of an estimated 59,500 barrels of oil per day as of July's end. Plains also announced this morning that it's buying a 50% working interest in the Holstein Field from Shell Offshore Inc. for $560 million. Those properties were producing about 7,400 barrels of oil equivalent net per day at July's end. Both deals are expected to close by the end of the year. The chairman, president and CEO of Plains, James C. Flores, is a Lafayette native and LSU graduate—and Business Report's 1996 Young Businessperson of the Year. BP says it plans to sell $38 billion of assets by the end of next year. "While these assets no longer fit our business strategy, the Gulf of Mexico remains a key part of BP's global exploration and production portfolio, and we intend to continue investing at least $4 billion there annually over the next decade," BP CEO Bob Dudley says.
'Reveille': Athletics bailout for LSU is appreciated but embarrassing
"Welcome to LSU, where the value of your education is determined by the football team's success." That's the opening of a new editorial in LSU's student newspaper, The Daily Reveille, which calls the new revenue-sharing agreement between the LSU Athletics Department and the university at large "embarrassing." The LSU Board of Supervisors approved the deal Friday. University officials say the agreement, which will send at least $7.2 million annually from the athletics department to academic endeavors on campus—plus a percentage of any surplus money—is among the first of its kind across the country. "A bailout from LSU athletics is kind, but it's not a long-term solution to the university and the state's lack of financial security," The Reveille says. "What if the football team has a season, in three years from now, when it loses every game? Will athletics still bring in the same amount of money? Will the success of the university fail when the football team fails?" Until the state stops cutting higher education funding and LSU builds an endowment, the editorial concludes, "let's hope the football team continues breaking records and winning. Our classes and LSU's future could depend on it." Read the complete editorial here.
Today's poll question: Do you think the new revenue-sharing agreement between the LSU Athletics Department and the university at large reflects inadequate support of LSU academics from donors and the state?
Study blasts Louisiana lawsuit awards
A national survey of business attorneys and leaders ranks Louisiana as having the nation's second-worst lawsuit climate in 2010, Gannett Louisiana reports. The ranking comes despite numerous changes in Louisiana tort law limiting awards and lawsuits. The compilation was done prior to the state's adoption of changes in laws dealing with "legacy" lawsuits over oil and gas exploration and production cleanup. It's the second time in the last three assessments that the state has ranked 49th; and it has never ranked higher than 47th, as it did from 2002 to 2005, since the survey began a decade ago. The U.S. Chamber of Commerce's Institute for Legal Reform surveyed 1,482 in-house counsel, senior counsel or litigators, and business executives about their perceptions of state and local courts. The survey notes that Louisiana doesn't allow punitive damages except in rare cases, but that didn't elevate the state's score. Neither did other changes adopted since 1996, when the Louisiana Legislature passed one of the nation's most aggressive tort reform acts under then-Gov. Mike Foster. "Despite positive lawmaking, Louisiana is still notorious for excessive verdicts, loose class-certification standards and an unfair judiciary," says Lisa Rickard, president of the Institute for Legal Reform. Some Louisiana lawmakers expressed surprise at the low ranking. Read the full story here for complete details.
Tigers' Mills and Montgomery get SEC player of the week honors
LSU freshman cornerback Jalen Mills and junior defensive end Sam Montgomery have been named two of the SEC as players of the week for their performance in the 41-3 win over Washington on Saturday. Mills, a true freshman who made his second start at cornerback, earned SEC Freshman of the Week honors after registering seven tackles and his first career interception in the win. Through two games, Mills is third on the team with 11 tackles. Montgomery, a 2011 All-American, had four tackles, one sack, 1.5 tackles for loss and three quarterback hurries to earn co-SEC Defensive Lineman of the Week honors. Montgomery and Mills both helped an LSU defense that held Washington to just 183 yards of total offense and only 12 first downs. The Huskies managed just 26 rushing yards on 24 attempts as Washington quarterback Keith Price was sacked four times. Outside of recovering an LSU fumble on the opening kickoff that gave the Huskies the ball at the LSU 16-yard line, Washington did not have another drive penetrate inside the Tiger 30-yard line all night. The win moved LSU past USC into the No. 2 spot in the latest USA Today Coaches' Poll. The Tigers remain ranked No. 3 by The Associated Press, behind USC and Alabama, which ranks at the top in both polls.
More offshore leases might not mean more revenue
Republican Gulf Coast governors and leaders on Capitol Hill have criticized the Obama administration's plans to hold 12 auctions of Gulf of Mexico drilling rights over the next five years, with some insisting that there should be many more. As The Houston Chronicle reports, they say increasing the number of auctions would spur energy companies to snap up more coastal waters for offshore drilling, immediately filling federal coffers with lucrative lease revenue and ultimately paying more oil royalty dollars for years to come. But such plans could cost the government more than it makes from additional sales. Each offshore auction carries a hefty price tag—$2 million to $4 million on average; and energy analysts say it's unlikely that oil and gas companies would purchase more leases just because they got more chances to buy them. In fact, the opposite may be true. Earlier this year, when the government held its first central Gulf lease sale since the 2010 oil spill, pent-up demand led to record-setting offers and brought in $1.7 billion in winning bids. That's almost double the $949 million from the previous central Gulf auction in March 2010. Having more auctions probably would just split up the bids, says Dave Pursell, an analyst and managing director of the Houston-based energy investment bank Tudor, Pickering & Holt. "I can't imagine you're ending up with more revenue if you're releasing the same acreage or the same tracts, just doing it more often," he says. Read the full story here.
News roundup: HP expands job cuts by 2,000 … Transocean in talks for four new deepwater rigs … Iran finding ways around oil sale sanctions
Hard times: Hewlett-Packard is planning to cut about 2,000 more jobs than it had previously announced, as CEO Meg Whitman tries to turn the company around. In a regulatory filing today, the computer and printer maker says it will cut 29,000 jobs by October 2014, up from the 27,000 cuts it announced in May. It didn't explain why it had raised the number, but as before, it expects some of the job cuts to come through an early retirement program. Last month, HP posted the largest loss in its 73-year history, having been hit hard by the shift in technology spending from PCs and printers toward cell phones and tablets.
Going deep: Transocean is in discussions with an integrated oil company for the construction of four new ultra-deepwater drillships, which will cost about $3 billion, the company announced this morning—just hours after saying it would sell 38 shallow-water drilling rigs for about $1 billion, The Houston Chronicle reports. Each new rig will be contracted with the oil company for 10 years, following the expected start of operation in 2015 and 2016, according to SEC filings. Transocean has estimated the new contracts for operating the rigs could total $7.6 billion.
Where there's a will: To continue selling crude oil to India, Iran is accepting payment in rice, medicine, engineering supplies and steel. To sell to China, its No. 1 customer, Iran is delivering the oil on its own tankers backed by state insurance, not on the commercial tankers used in the past. Japan remains so eager to buy from Tehran that the government in Tokyo is furnishing the multibillion-dollar marine insurance its ships need to carry Iranian crude. Despite what U.S. officials call some of the toughest economic sanctions ever imposed, Tehran is finding legal ways to sell or barter oil to its most important markets in Asia. The Los Angeles Times has the full story here.