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Closing Bell: USF

It could be Tom Freston's own Mission: Impossible. The 58-year-old Viacom (VIA) co-president must overhaul Paramount Pictures (VIA) to win the horse race against fellow Co-President and CBS (VIA) Chief Leslie Moonves, 56, to succeed Viacom Chairman Sumner Redstone, 82, who says he's leaving in three years. Freston has a chance, thanks to the Nov. 2 announcement by Sherry Lansing, 60, that she will be retiring as Paramount chairman. A Hollywood icon, Lansing lately has been churning out flops such as The Stepford Wives.

Freston, who built Viacom's MTV unit into a cable powerhouse, intends to loosen the purse strings at tightfisted Paramount to produce the hits needed to boost the bottom line. Among the candidates that he's looking at to replace Lansing are Universal studio chief Stacey Snider, producer Brian Grazer, and former Fox (FOX) studio chief Bill Mechanic. Whoever takes the assignment will need a little of Tom Cruise's derring-do to turn around Hollywood's weakest performer.

Time Warner (TWX) said on Nov. 3 that it's setting aside $500 million related to federal investigations into its accounting. The media giant also will restate earnings for 2000, 2001, and possibly 2002, because it should have consolidated the AOL Europe (TWX) division in financial statements during that period. In 2000, Goldman Sachs (GS) acquired 1% of AOL Europe, AOL's partnership with Germany's Bertelsmann, to keep AOL's stake below 50% (BW -- June 28). As a result, AOL believed it didn't need to consolidate AOL Europe on its books. The Securities & Exchange Commission will probably rule otherwise and is starting to look into whether Goldman "aided and abetted" AOL in violation of securities laws, says a source. Time Warner officials declined to comment beyond the restatement announcement. A Goldman spokesman said the firm had no comment. (For more, see "Time Warner Sets Aside a Problem?")

California money managers are among those celebrating the passage of the state's controversial Proposition 71, which approved $3 billion in long-term bonds to fund stem-cell research. Prop 71, which won 59% of the vote, had been challenged by fiscal conservatives and by those who oppose using human embryos in research. Still, the proposition got the support of Governor Arnold Schwarzenegger, who says it will boost California's biotech industry. Under the initiative, a new medical institute will award up to $350 million a year in grants and loans to research facilities in the state.

Many people have attacked the U.S. Justice Dept.'s Enron Task Force for taking so long to haul the company's managers into court, but nobody can argue with the results. On Nov. 3 government prosecutors won convictions against four former Merrill Lynch (MER) executives and one midlevel Enron manager for their role in the energy giant's financial meltdown. One ex-Enron employee was acquitted. The victory in the so-called Nigerian barge trial bodes well for the feds as they prepare for the ultimate showdown: the criminal trial against former Chairman Kenneth Lay and ex-CEO Jeffrey Skilling, which now appears as if it will take place next year.

Cost-cutting programs and asset sales helped Cigna's (CI) third-quarter earnings rise 64% while revenue from continuing operations slipped 6%. A $79 million gain on the sale of a retirement-benefits unit helped, but CEO Edward Hanway credited progress in "medical management, service, and underwriting" for a 77.6% rise in health-care segment earnings. As competitors such as UnitedHealth Group (UNH) have poached on its corporate coverage, Cigna has responded with programs that help employers cut their medical bills.

-- Yahoo! (YHOO) hired ex-ABC Entertainment Television Group (DIS) Chairman Lloyd Braun to run its entertainment biz.

-- The SEC extended an order exempting banks from broker-dealer registration until Mar. 31, 2005.

-- Oracle (ORCL) raised its hostile cash bid for rival software maker PeopleSoft (PSFT) by 14%.

On Nov. 2, two weeks after USF (USFC) reported weak earnings, CEO Richard DiStasio quit the trucking outfit. His unexpected resignation sent USF shares skidding 10%, to $32.99, though they rebounded slightly on Nov. 3 to close at $33.70.

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