The Brief

The oil industry is having an I-told-you-so moment in California.

For decades, the state has raced to end its reliance on fossil fuels and prioritize clean energy. Its relationship with oil companies became particularly contentious in the past two years, as Gov. Gavin Newsom and Democratic legislators held two special sessions to crack down on alleged price gouging at the pump.

But now two of its last remaining fuel refineries are closing sooner than California expected, tossing a simmering emergency into officials’ laps. With a hotly debated forecast that $8-per-gallon gasoline might be on the horizon, there has been a remarkable shift at the state Capitol. Led by Newsom, who just last fall was lambasting oil companies for “screwing” consumers, California may soon let its black gold flow again.

“We are all the beneficiaries of oil and gas. No one’s naive about that,” Newsom said at a press conference last month. “So it’s always been about finding a just transition, a pragmatism in terms of that process.”

Newsom and Democratic legislative leaders are now negotiating a plan with the industry to boost stagnating production in California's oil-drilling hub of Kern County — and avert a nightmare scenario for a governor with national ambitions and a party that has promised to focus on affordability. Lawmakers could pass a measure before the end of their annual session in mid-September, though the details remain unsettled and environmental groups are raising alarms.

The headspinning realignment potentially heralds a new era in California’s transition to a carbon-free future, as high costs, technological impediments and flagging political will force Democrats to recalibrate their ambitious climate goals. President Donald Trump and congressional Republicans are also taking aim at the state’s vast powers to regulate its greenhouse gas emissions and air pollution, including revoking California’s mandate to phase out gas-powered vehicles and slashing renewable energy tax credits.

“We all need to kind of evolve. Maybe that’s just the lesson on climate. There’s not really a purity test on this. It’s not like civil rights,” said state Sen. Henry Stern, a Calabasas Democrat who five years ago was publicly advocating for keeping more California oil in the ground.

As both a staffer and a legislator, Stern worked on major laws to require buffer zones around oil wells in sensitive areas and restrict the well stimulation technique known as fracking. But he said he does not want California to see the same backlash to climate action as western Europe, where environmentally focused Green parties have recently been crushed electorally by far-right populists.

“We can perform a muscular version of climate policy that doesn’t have to be so all-or-nothing,” Stern said.

Oil industry forces Newsom's hand

Refinery closures are accelerating the pressure in Sacramento. Two days after Newsom signed a law increasing state oversight of maintenance, Phillips 66 announced in October that it would shut its Los Angeles facility by the end of 2025 because of concerns over the sustainability of the California market. Then in April, Valero declared it would close its Benicia refinery next year, citing a challenging regulatory environment.

That would leave only six major facilities to refine crude oil into transportation fuels in a state that remains the country’s second-largest gasoline consumer after Texas, as well as a major user of jet fuel, according to the U.S. Energy Information Administration. A business professor at the University of Southern California projected the loss of refining capacity, which will be offset with more expensive imports of finished fuel, combined with additional state actions, could send gasoline prices spiraling past $8 per gallon by the end of 2026.

Republicans pounced on that figure to criticize Newsom for fomenting an energy crisis in California, sparking fierce pushback from the governor’s office, which has dismissed the report as an “unscientific analysis” by a professor with close ties to the oil industry. Other experts have estimated a smaller effect on prices, which currently average about $4.49 per gallon in California, according to AAA, $1.33 higher than the national average but lower than they’ve been since January.

The Western States Petroleum Association — the powerful Sacramento-based lobby for the oil and gas industry that has donated more than $330,000 to lawmakers in the past decade — blames taxes, fees and regulations for California’s high prices. Decades of state rules, including strict emissions targets, a ban on the additive MTBE, and requirements for a special gasoline blend, traditionally make refining more expensive. Drilling in California is also in what the industry calls “terminal decline” as the Newsom administration has largely stopped issuing new permits, forcing a greater reliance on foreign countries such as Brazil, Iraq, Guyana and Ecuador with looser labor and environmental standards.

“At some point, are you going to have enough supply to meet California's demands?” said Catherine Reheis-Boyd, CEO of the petroleum association, who evoked the fuel shortages and long lines at gas stations that followed a 1973 embargo against the United States by other oil-producing nations. “People's lives were completely disrupted.”

Industry leaders argue pumping more crude oil in California, particularly in Kern County, could help meet demand at a lower cost. But if the state doesn’t act quickly, they warn that production could drop so low it would shut down pipelines between local oil fields and refineries, further exacerbating a crisis of California’s own creation.

“For me, I don't care if the motivation is political or policy. I'm very happy that we're having a conversation about something that's really impactful to the consumers of California,” Reheis-Boyd said.

Climate commitment meets reality

After years of making the oil industry into a political boogeyman, Newsom has become surprisingly receptive to its message.

Gone is the bombastic governor who declared to a United Nations summit in 2023 that “this climate crisis is a fossil fuel crisis,” or strong-armed the Legislature that same year into adopting a law that could penalize oil companies for excessive profits.

Gov. Gavin Newsom at a press conference after signing three bills into law that restrict oil and gas operations near schools, daycare centers, and across California communities. Los Angeles on Sept. 25, 2024.

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In April, after Valero said it would close its Benicia refinery, Newsom directed Siva Gunda, vice chair of the California Energy Commission, to “redouble the state's efforts to work closely with refiners on short- and long-term planning” and ensure a “reliable supply of transportation fuels.”

Gunda returned a series of recommendations in June that closely aligned with the industry’s wishlist, including stabilizing in-state crude production, rolling back regulations that limit imports and improving investor confidence.

While the commission is exploring delaying implementation of the profit penalty and refinery maintenance oversight laws, Newsom began circulating a draft bill that would provide blanket approval for environmental reviews of Kern County wells to sidestep litigation that has stalled drilling. That proposal is now at the center of negotiations over a legislative package that could simultaneously create new standards for restarting offshore drilling, require the industry to plug more idle wells and end the use of fracking.

“We’re in the ‘how’ business. We move to a low-carbon, green-growth future, change the way we produce and consume energy,” Newsom said at the press conference last month. “At the same time, we have enough available fuel supplies, a stable fuel supply and address the anxieties around cost. Both and.”

Matt Rodriguez, a longtime Democratic consultant who has worked in California and on several presidential campaigns, said Newsom is caught between a commitment to climate action that is important to the left and a substantive problem that could hurt both the economy and individual voters.

“The reality is that gas prices are higher here than the rest of the nation. That’s just undeniable,” he said. “If there are storm clouds on the horizon, you can’t just sit there and ignore it.”

The larger the gap between the price at the pump in California and in other states, Rodriguez said, the greater the liability it poses in a future presidential campaign for Newsom, who will likely also face criticism for how his own policies contributed to the problem. But Rodriguez said there is a potential upside if the governor can negotiate a solution with the oil industry, allowing him to tout himself as a pragmatist rather than an ideologue.

“Any way that he can keep gas prices from ballooning, that’s his imperative,” Rodriguez said.

'We didn't have a champion'

Environmental groups, meanwhile, are up in arms. More than 120 signed a letter earlier this month opposing Newsom’s push, which they characterized as an industry giveaway that would “gravely harm the air we breathe and water we drink around the state, but have no impact on refinery closures or gas prices.”

Hollin Kretzmann, an attorney with the Center for Biological Diversity, called the governor’s proposal to streamline approval of new Kern County wells a “drill, baby, drill” plan that would “eviscerate” California’s bedrock environmental review law for one of its core purposes: reining in a polluting industry.

He noted that courts already struck down earlier versions of the idea when Kern County tried it, because the environmental review was deemed insufficient. Last month, the county passed a third version of the plan, which Newsom’s bill would enshrine into state law.

“It's a very misguided and ill-conceived proposal,” Kretzmann said.

Martha Dina Argüello, executive director of the Physicians for Social Responsibility Los Angeles, remembers attending a press conference last September, outside the Inglewood Oil Field, where Newsom signed a trio of new laws aimed at cleaning up idle wells and restricting oil and gas operations. She said she was “stunned” by the governor’s rapid reversal and warned that it would allow the oil industry to gut public health protections under the guise of affordability, passing the costs on to low-income communities near oil fields and refineries that have higher asthma and cancer risks from exposure to toxic chemicals.

“You don't often get champions who are consistent — and it's very sad that we didn't have a champion that was really going to do the difficult thing and tell us the changes that we need to make to actually address climate change and air pollution,” she said. “That's what our communities still need.”

Landing a deal will be tricky

The governor’s office is working to find an approach that can get through the Legislature in a short time frame. Lawmakers return from their summer recess on Monday for the final month of session.

That could necessitate making tradeoffs between priorities for environmentally minded lawmakers on the left, such as protecting the buffer zones around oil wells, and moderates more sympathetic to the industry’s arguments. It’s possible the proposal will be merged with a separate effort to extend California’s cap-and-trade system for greenhouse gas emissions, because oil refiners are seeking a more gradual decline in the credits that allow them to emit carbon pollution without paying.

Stern described the mood among lawmakers as “begrudgingly practical,” but also grumpy about having to take on yet another fight over oil, “so nothing feels like a win.” Given the political sensitivities, he said it was possible the Legislature would pass only the provision to boost drilling in Kern County and carry over the rest of the discussion into next year.

Nevertheless, the boundaries of the debate around domestic oil production have completely shifted in Sacramento, with affordability taking on a more prominent role.

Assemblymember Cottie Petrie-Norris, an Irvine Democrat who chairs the Assembly’s utilities and energy committee, said the Legislature could no longer afford to treat California’s energy transition like a future aspiration, as previous generations of officials have. Instead, lawmakers must be pragmatic and retain the support of everyday Californians, she said, because without their buy-in, the state will cease to be a climate leader.

“There are some advocates who continue to think that you can somehow just wave a magic wand and end oil production in California without terrible consequences,” she said. “We need California to be an inspiration, and not a cautionary tale.”

An agreement to expand drilling would be a hard-fought victory for Sen. Shannon Grove, a Bakersfield Republican who has spent the majority of her 10-year legislative career repeatedly warning that cutting oil production in California would only increase reliance on imports from countries with lower environmental and labor standards.

“Do I wish that companies and businesses would not have left my district and taken their jobs with them and created a vast unemployment rate? Do I wish that the people who lost their jobs still had their jobs? Do I wish it would have happened sooner?” Grove said. “Yes. But I'm grateful that it's happening.”

Grove said Kern County, which also is home to some of the state’s largest solar and wind projects, has the potential to be the “energy capital of the United States.” She argues the county has done its due diligence with environmental reviews to ensure that future drilling projects are more climate conscious than importing oil from other countries.

“If you're going to do it, you have to do it right,” she said, “and Kern County does it right.”

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Netflix and Paramount are in One Big Battle After Another to buy the storied Hollywood studio Warner Bros. (Yes, One Battle After Another is a Warner Bros. movie).

This isn't the first time Warner Bros. has been at the center of headline-grabbing merger or acquisition. Actually, Warner Bros. has a long history of messy corporate marriages and divorces. It could be a cautionary tale about the dangers of mergers and acquisitions. You could even call it the Warner Bros. Curse.

Over the last decade alone, the Warner Bros. Curse has shown itself at least twice. In 2018, after a two-year regulatory battle, AT&T acquired what was then called Time Warner for $85.4 billion, and renamed the company WarnerMedia. Many believed AT&T overpaid for the company, and the stock market never seemed to really love this deal. WarnerMedia struggled to find big profits in streaming, its movie business was devastated by the pandemic, and the companies' cultures never really jibed with each other.

And so — in a deal that represented tens of billions of dollars in losses for its shareholders — AT&T sold shares and ceded control of WarnerMedia to Discovery Inc. The two officially merged in 2022, forming Warner Bros. Discovery, which is still this Frankenstein of a company's name (Frankenstein is another Warner Bros. property).

Since then, the company has made a series of bizarre decisions, like rebranding its streaming service HBO as HBO Max and then Max and then back to HBO Max. There were other debacles. Like, despite the movie being nearly done — and despite the fact they had spent nearly $90 million making it — Warner Bros. Discovery shelved BatGirl (and apparently wrote the loss off on their taxes). More recently, the company bought the rights to stream the show Mad Men, and as part of its release on the streaming platform, it sought to remaster the series into a widescreen, 4K format. But the production team apparently failed to do their due diligence and make sure it all looked good before releasing it. The result: those who watched Mad Men on HBO Max saw things like the production crew in the frame, including, in one scene, a technician holding a "vomit hose" as one of their actors pretended to throw up. This whole chapter of Warner Bros. history has proven to be, um, Looney Tunes.

Economists who study mergers and acquisitions have long puzzled over why so many corporate marriages go wrong. "Study after study puts the failure rate of mergers and acquisitions somewhere between 70% and 90%," wrote the legendary Harvard Business School scholar Clayton Christensen and colleagues in Harvard Business Review back in 2011. The story of Warner Bros. is a pretty interesting case study to get an understanding of why so many mergers and acquisitions fail.

The most glaring example of the Warner Bros. Curse happened at the turn of the millennium. It's widely considered to be one of the worst — if not the worst — mergers of all time. It was so bad that it's still studied in business schools.

Today in the Planet Money newsletter, we look at that disastrous merger. And we ponder some reasons why so many mergers and acquisitions fail.

The merger of the century

In October 1999, Steve Case, the CEO of America Online (AOL), made a fateful phone call to Gerald Levin, the CEO of Time Warner.

At the time, Case was only 41 years old, but, over the previous 15 years, he had built one of the most exciting companies in America. Before AOL, the internet was largely a place for geeks and bureaucrats. Case's company had made the internet accessible to tens of millions of normal Americans. In 1998, the company's popularity even inspired a zeitgeisty rom-com, You've Got Mail (which, you guessed it, was produced and distributed by Warner Bros.) In the midst of dotcom mania in the late 1990s, AOL's share price was rocketing through the stratosphere.

But Case was also worried. He was worried about mounting competition. He was worried that the stock market was in a speculative mania that wouldn't last. And he was worried what would happen to his company if there was a crash. AOL didn't really own much when it came to hard assets and the internet was changing fast. Case wanted to leverage his company's inflated share price, buy something big and tangible, diversify his company's business model, and secure a more resilient corporate future. Time Warner had serious appeal. For one, AOL was increasingly getting into the content game, and Time Warner offered exciting intellectual property to distribute. Even more, Case coveted Time Warner's sprawling network of cable lines, which would prove valuable as consumers ditched dial-up modems and adopted high-speed internet.

Gerald Levin, on the other hand, was disgruntled with the direction of his company. Time Warner was by then a sprawling media conglomerate which, after a series of mergers and acquisitions, controlled media entities like Time magazine, Warner Bros. Pictures, a record company, HBO, CNN, TBS, and Sports Illustrated. But his company's stock price was underperforming during the dotcom stock mania. He worried his company was failing to thrive at the dawn of the digital age. He was floundering while trying to usher in Time Warner's digital future in house, and he yearned for what he called another "transforming transaction" — a merger or acquisition — to revolutionize his company and secure his legacy.

When Case called Levin, he didn't beat around the bush. "Jerry? I've been thinking: we should put our two companies together. What do you think? Any interest?" he said, according to an excellent 2004 book by journalist Nina Munk, Fools Rush In: Steve Case, Jerry Levin, and the Unmaking of AOL Time Warner.

Levin was interested, but he also played hard to get. "I don't think so, Steve. But I'll think about it," he reportedly said.

By then, Case had grown insanely rich, had a second marriage he wanted to preserve, and he had grown tired of the intensive work of being the CEO of his company. He was now hobnobbing with bigwigs at places like White House state dinners and the World Economic Forum in Davos, and he was on his way to a more cushy life as an investor, thinkfluencer, and philanthropist. Case was prepared to step down as CEO and take a less time-intensive role as chairman of the board, and he knew exactly what to say to Levin to pique his interest: Levin would take the helm of this new corporate juggernaut.

But Levin was still wary. And he had reason to be. Before he had become Time Warner's CEO, Levin had a long career in the lower rungs of its executive team. In late 1980s and early 1990s, when Time Inc. sought to merge with Warner Bros. (then known as Warner Communications) and form what would become Time Warner, the transaction encountered serious difficulties (the Warner Bros. Curse!). A company known as Gulf & Western — which would soon be renamed Paramount Communications, and today is known as Paramount Skydance — tried to stage a hostile takeover of Time Inc. (Sound familiar?) That hostile takeover ultimately failed, but it cost Time a lot of stress and money — and time — to avoid it, and Levin worried this was the beginning of another similar story.

After some back and forth over the next few weeks, Case and Levin decided to meet. They wanted this meeting to be a secret. So they rented a suite at a hotel in Manhattan, near Time Warner's headquarters, and spent an evening together.

They ordered room service for dinner, drank fancy wine, ate chocolate mousse, and dazzled each other. Through deep philosophical conversations about business and life, they decided they were simpatico. That night, they decided they would marry their two corporations, forming the world's largest media and entertainment company.

There were still thorny details to work out. Like, what percentage of shares in this new company would each side get? AOL had a stock market capitalization that was nearly double Time Warner's, and its stock price was growing much faster. But when it came to the meat and potatoes of actual revenue, Time Warner actually made much more money. And it had valuable assets, including a sprawling array of media properties and physical cable infrastructure. Levin wanted a 50-50 split in a new merged company. Case rejected 50-50. After months of negotiations, Levin ultimately settled on Time Warner getting 45% of their new, merged entity.

On January 10, 2000, AOL announced it was acquiring Time Warner for $182 billion. It was one of the largest — if not the largest — corporate mergers in history. When they officially merged, the two companies would be worth $350 billion. It was a wedding between old and new media, creating what looked like a power couple that would dominate the 21st century. Many analysts thought it was brilliant. The new company promised astounding rates of profit growth.

America Online Chairman Steve Case (L) and Time Warner Chairman Gerald Levin (R) announce their companies' merger Jan. 10, 2000 at a New York news conference. The new company will be called AOL Time Warner.

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A star-crossed marriage

But almost immediately, the marriage between AOL and Time Warner turned rocky. Levin had negotiated this deal while keeping much of Time Warner in the dark. He had treated his executives and his board of directors like a rubber stamp. Many felt the deal was rushed and sloppy. From the outset, many executives and employees were angry about the merger.

And, as the companies began to merge, AOL and Time Warner had big culture clashes. Time Warner was old school. Its board meetings were structured and formal. AOL meetings tended to be freeflowing and chaotic. Time Warner's divisions — from HBO to CNN to Warner Bros studios to its magazines — had operated autonomously. AOL wanted them to be under more centralized control, and pursue cross-platform advertising deals. AOL was obsessed with beating expectations, stoking investor excitement, and juicing their stock price. Time Warner executives were less obsessed with metrics and chasing short-term stock gains. Each side thought the other side knew nothing about their side of the business. There was a lot of animosity as the two teams became one.

Maybe it would have all worked out in a rosier market. However, as luck would have it, the two companies negotiated their deal just three months before the peak of the dotcom bubble: March 10, 2000. After that, the bubble started to deflate. It would still be almost a year until federal regulators would approve this deal and make the proposed merger official. In the meantime, AOL's stock began sinking.

The whole deal between Time Warner and AOL was predicated on an explosive rate of growth at AOL. But as the stock market crashed and the economy turned sour, companies began cutting back on advertising. Advertising was crucial to AOL's business (and also Time Warner's). Meanwhile, AOL's new subscriber growth began to slow down. And AOL's stock descent picked up pace.

By January 11, 2001, when federal regulators officially approved of the merger, AOL Time Warner was already in serious trouble. But things got much worse after the spring of 2001, when America officially entered a recession. Then came 9/11, and the economy got even worse.

The newly formed AOL Time Warner went into panic mode as their business soured. The company began doing share buybacks, trying to signal to the market that their stock was undervalued (even as its top executives sold shares). They laid off thousands of employees and began making drastic cuts. They got super petty about employee expenses, like eliminating free soda and forcing employees to buy from vending machines. Worst of all, AOL executives resorted to cooking their books, trying to make it seem like their advertising revenue was solid when really it wasn't.

The bad news for AOL Time Warner kept mounting. Fighting over what the company should do, the bromance between Case and Levin turned to man-imosity, and Case began rallying their board against Levin.

The writing was on the wall. On December 5, 2001, Levin announced he was going to go into early retirement. "I'd never cried before," Levin told Nina Munk, when she was writing her 2004 book about this corporate fiasco. "I'd never cried. And now I cry all the time."

With Levin exiting, a civil war broke out within the company. The two sides hated each other. Levin's replacement as CEO, Richard Parsons, would later tell The New York Times, "It was beyond certainly my abilities to figure out how to blend the old media and the new media culture. They were like different species, and in fact, they were species that were inherently at war."

In the summer of 2002, The Washington Post got a scoop that — both before and after its merger with Time Warner — AOL had been essentially cooking the books, pretending that it was getting more ad and other revenue than it really was. That story inspired lawsuits and investigations by the Securities and Exchange Commission, and AOL Time Warner's stock price went into a free fall.

By the end of this fiasco, over $200 billion in shareholder value had been wiped out (over $350 billion in today's dollars). The company was forced to pay big fines. AOL Time Warner ended up firing basically every senior AOL executive. Under pressure, Steve Case resigned as the board chairman. In 2003, AOL Time Warner dropped AOL from its name and, in 2009, officially separated from it. (AOL is still around; an Italian tech company called "Bending Spoons" recently announced it was buying it for $1.5 billion).

What is today called Warner Bros. Discovery still bears the scars — including billions of dollars in debt — from its disastrous merger a quarter century ago.

Netflix promises it will avoid the Warner Bros. Curse

Interestingly, Netflix executives, with their eyes set on acquiring Warner Bros., recently promised Wall Street that, basically, don't worry, we won't fall victim to the Warner Bros. Curse like so many have before us.

"A lot of those failures that we've seen historically is because the company that was doing the acquisition didn't understand the entertainment business," said Greg Peters, co-CEO of Netflix, on a recent call with Wall Street analysts, according to Deadline. "They didn't really understand what they were buying. We understand these assets that we're buying, the things that are critical in Warner Bros. are key businesses that we operate in, and we understand. A lot of times, the acquiring company, it was a legacy non-growth business that was looking for sort of a lifeline. That doesn't apply to us. We've got a healthy, growing business that we're super, super excited about."

But their potential merger with Warner Bros is already off to a rocky start. Paramount is attempting a hostile takeover. The two are now involved in a battle that could prove to be an intense bidding war, increasing the chances that Warner Bros. could be involved in another ill-fated merger.

What causes so many mergers and acquisitions to fail? One big reason is that the buyers tend to overpay for what they're acquiring. There are a lot of potential reasons for that. One is related to something we wrote about in a recent newsletter and covered in The Indicator. Behavioral economists have long observed that winners in auctions — or really any market where people competitively bid against each other for something — are often the ones who overpay for what they're buying. They call it "the winner's curse." In other words, the winning bidders often win precisely because they are the ones who most overestimate the value of what they're buying.

At heart, corporate leaders may overpay in mergers and acquisitions because they're bad at judging what those companies — and what those companies and their companies combined — will actually be worth. There's a well-known insight in personal finance that people, for the most part, shouldn't pick and choose individual stocks. The basic idea is that stock prices already reflect available information, and it's hard to beat the market. Maybe that extends even to many CEOs and expert executive teams buying or selling companies.

If you're a company seeking to buy another company, "[y]ou are almost always going to pay more – often significantly more – than the firm is currently worth," writes Melissa Schilling, a scholar at the NYU Stern School of Business. "If you didn't, the target's current owners wouldn't sell. Their outside option is always to hold or sell to another bidder at a higher price. That means your acquisition is only going to pay off if you know something the market doesn't know, or you can do something significantly better with that firm's assets than its current owners are doing."

Apparently, that is really hard to do. But cocky executives often think they know something that the market doesn't, and they may overestimate the actual 'synergies' that can be found when two companies become one. Ultimately, they may overvalue what they're buying or merging to create.

Or maybe company leaders sometimes do foresee the real value, but it's for themselves, and not necessarily for their employees or shareholders. In a 2022 book, titled The Merger Mystery, scholars Geoff Meeks and J. Gay Meeks, both of the University of Cambridge, argue that "misaligned incentives" between executives and their companies is one common reason why, despite a high failure rate, so many corporate leaders are so gung-ho to do mergers and acquisitions. Basically, company leaders and advisors can often make huge sums of money from M&A transactions — kind of like Warner Bros. Discovery CEO David Zaslav has in the transactions he's been involved with — even if those transactions ultimately fail to boost their company's profits and serve their shareholders and employees.

The benefits for corporate bigwigs pushing for mergers and acquisitions goes beyond just money. For example, it can also be quite an ego boost to suddenly be in charge of a much bigger company or control something that gets lots of public attention.

Meanwhile, dealmaking like this is often hindered by what economists call asymmetric information. When different parties in a deal have unequal information about the thing that is being bought or sold, it can lead to mispricing and market failures. For instance, maybe the troubles at AOL were more apparent to insiders with intimate knowledge about their company's performance. Had Time Warner gotten better information about the company they were forming a relationship with — and not rushed through their due diligence in prodding and poking the deal — maybe they would have killed the deal or structured it differently.

There are many other potential reasons why mergers and acquisitions can go wrong. But the story of AOL and Time Warner's disastrous merger really highlights how the actual work of making two companies into one can be really messy. Culture clashes, personal animosities, and the headaches of implementing new processes, structures, and strategies can be demoralizing to employees and hurt a newly merged company's performance, detracting from the synergies that the companies were originally hoping for.

We look forward to seeing how this new sequel to the decades-old franchise of Warner Bros. mergers and acquisitions turns out. Sure, it could prove to be like The Dark Knight, a commercial and critical success. However, there is a big risk it could be more like Joker: Folie à Deux, another Warner Bros. flop.
Copyright 2025 NPR

The son of Hollywood legend Rob Reiner will face murder charges in the killings of his parents — Hollywood legend Rob Reiner and Michele Singer Reiner, the Los Angeles County district attorney announced Tuesday.

In addition to two counts of murder, Nick Reiner, 32, faces special-circumstance allegations — multiple murders and use of a deadly weapon — that would make him eligible for the death penalty if convicted

District Attorney Nathan Hochman said his office has not yet determined whether it would seek death or life without the possibility of parole. Such decisions are usually made after a preliminary hearing where a judge hears evidence from prosecutors.

"Prosecuting these cases involving family members are some of the most challenging and most heartwrenching cases that this office faces because of the intimate and often brutal nature of the crimes involved," Hochman said at a Tuesday afternoon news conference.

In the past, Nick Reiner has admitted to struggles with drug addiction and mental illness. It is unclear how much of that will factor into the case.

"At the appropriate time, if there is evidence of mental illness, it will be presented in court and in whatever detail the defense seeks to do that," Hochman said.

Nick Reiner was arrested Monday in Exposition Park in connection with the stabbing deaths of his parents, according to Los Angeles police.

His parents Rob Reiner, 78, and Michele Singer Reiner, 68, were found dead Sunday after police were called to their Brentwood home on South Chadbourne Avenue around 3:40 p.m. .

Detectives with the Police Department’s elite Robbery Homicide Division, Homicide Special Section began an investigation and identified Reiner as the suspect, according to police.

The younger Reiner was located and arrested at approximately 9:15 p.m., according to police. He was booked on suspicion of murder and remains in custody with no bail.

Police did not say where Reiner was found.

There was no official word regarding a possible motive for the crime or the cause of death.

People Magazine reported that the couple's daughter, Romy Reiner, was the one who found the bodies.

Variety published a statement issued by the Reiner family that said: “It is with profound sorrow that we announce the tragic passing of Michele and Rob Reiner. We are heartbroken by this sudden loss, and we ask for privacy during this unbelievably difficult time.''

The family members of the late All in the Family creator Norman Lear also issued a statement saying they were devastated by the deaths.

“Norman often referred to Rob as a son, and their close relationship was extraordinary, to us and the world,” the statement read. “Norman would have wanted to remind us that Rob and Michele spent every breath trying to make this country a better place.''

Rob Reiner became a household name playing Michael "Meathead" Stivic on TV’s All In The Family. It captured the politics of the time.

But he went on to eclipse that early success with a decades-long career in film. He directed dozens of movies, including such legendary romantic comedies as When Harry Met Sally and The American President, and he revived the art of the mockumentary with This Is Spinal Tap.

Other beloved films include Stand By Me and The Princess Bride. He was nominated for an Oscar for directing A Few Good Men.

Michele Singer Reiner was a photographer who met her husband while he was filming When Harry Met Sally. He said he changed the ending of the film after their meeting.

Reiner was politically active throughout his career as an actor, director, producer and writer. He was an outspoken liberal and Democratic Party fundraiser.

Lisa Gladstone is stuck between (moving) rock and a hard place.

Her home in Rancho Palos Verdes started ripping apart in 2023 when heavy rains led to unprecedented land movement. So in a last-ditch effort to salvage what they could, she and her husband took out an $80,000 loan to have crews cut their house in half to keep the part on moving land from dragging the whole house with it.

Windows do not close in Lisa Gladstone's home in Rancho Palos Verdes because of land movement.

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Despite their efforts, it eventually was red-tagged as uninhabitable.

So when a city-backed buyout program was announced for residents who lost their homes, they immediately applied. But there was a catch: To qualify, homes can’t be in foreclosure proceedings, and U.S. Bank had started knocking, telling the 72-year-old and her husband they needed to come up with $44,000 by Christmas Day to make the mortgage current.

“ When we get the FEMA funds, we would pay off the mortgage, and we would have enough money that we can live without additional stress,” Gladstone said. “I can't get anyone at U.S. Bank to have that conversation with. Every time I call, they tell me I have to fill out this mortgage assistance document, which is very scary, intrusive because it feels like I'm giving U.S. Bank access to our other remaining assets, which I cannot afford to do.”

But until the federal relief dollars trickle in — and the city has said that could take years — or U.S. Bank gives Gladstone a clear answer, the 72-year-old said they’re stuck in a “ circular, crazy, purposefully defeating system.”

A spokesperson for U.S. Bank said in a statement to LAist that "over the last year, we have been in regular communication with the client to help resolve their situation and continue to work with them directly on the matter. That said, we want to clarify that the property is not and has never been in foreclosure proceedings during that period of time. It sounded like the most recent communication was this week, and the team was going to reach back out to make sure next steps and where things stand were understood.”

Meanwhile, the couple remains stuck in a sort of limbo and has moved out to Moab, Utah, to await next steps.

How we got here

In 2011, Gladstone bought the home in the Portuguese Bend area of the city with her husband, Milton Owens, knowing about the history of land movement.

 ”We had an independent engineering report done on it, and everything checked out fine,” Gladstone said. “Things hadn't been moving and we lived there almost happily ever after as seniors in a community that was very safe and comfortable.”

Then the land movement started. First, they were lucky.

“ One of the fastest-moving houses in the neighborhood was next door to us, and we had no movement,” she said. “We were across the street from a cul-de-sac, where we had repeated water main breaks for months and months and months.”

Damages to the foundation of Lisa Gladstone's home in Rancho Palos Verdes.

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Courtesy Lisa Gladstone

)

But when the heavy rains of 2022 and 2023 saturated the ground, their house no longer was spared. SoCalGas and Southern California Edison shut off utilities to their neighborhood, forcing them off the grid, as they watched their house slowly tear apart.

 ”We hired a structural engineer, and his advice was that we cut the home into two parts and try to have one part not pulling the other part into the slide,” Gladstone said.

So they took out the $80,000 loan and paid for the project, which ultimately failed to save the house.

“ We just did everything we could. We did experimental things, we did things that were intended at first to just prop the house up and keep it from sliding even more,” she said.

In the end, the couple just couldn’t take it anymore.

“ If you tried to turn on the microwave to heat up a cup of coffee, it would blow the light if you had them both on at the same time,” Gladstone said. “You couldn't run laundry, you couldn't turn the water heater on without turning everything else off, and it became the way of life as the whole house was falling in around us.”

Now, the couple hopes to stave off foreclosure proceedings until the federal buyout money comes in. Then, they plan to pay off the mortgage and use the remaining money to live out the peaceful retirement they envisioned when they moved into their Rancho Palos Verdes home.

Topline:

The backstory: Estimates suggest the monarch butterfly population has declined by more than 80% since the 1980s due to habitat loss, pesticides and climate change.

The latest: Researchers on the Central Coast are using new technology to track the endangered species' population. “Just this year, cellular tracking technologies have developed a radio transmitting tag that is small enough to put on a butterfly,” said Charis van der Heide, senior biologist at environmental consulting firm Althouse and Meade Inc., speaking on LAist's AirTalk with Larry Mantle.

Hi-tech mini backpacks: These tiny yet mighty solar transmitter tags serve as mini backpacks for monarchs, allowing researchers to track the butterflies in an effort to help monitor their movements. “This tag weighs 0.7 grams,” said van der Heide, adding, “And we just put it on the back of a monarch and let it fly away.”

Get involved: The tags connect via Bluetooth to a public app called Project Monarch, allowing researchers and everyday visitors to help track the butterflies’ movements in real time.

Learn more: Listen to the full AirTalk segment to hear more about the tracking project and how to get involved.