The Hollywood Reporter's Borys Kit and Gregg Goldstein have the scoop:

After Warner Bros. absorbed New Line as an in-house production label, industryites wondered which Warners specialty unit would be kept, Warner Independent Pictures or Picturehouse. The answer came Thursday: Neither.

In a move that sent ripples of shock around town, Warners said it is was shuttering both divisions, citing cost savings and an elimination of redundancies.

Most of the units' 70 employees are expected to lose their jobs, including all 43 Picturehouse staffers. WIP president Polly Cohen said that some of her 27 staffers will remain on board to shepherd projects to the studio. The 11-year Warners vet's contract runs for about two more years, and she will stay within Warners for now, though she's unclear in what capacity.

Some Picturehouse staffers also might remain.

LA Weekly's Patrick McDonald wrote a piece about Nudelman's passing.

We're not alarmists - but sound the alarms! LAT has a story about Ugly Betty moving to New York.

Two weeks ago, New York's governor signed into law a bill that tripled the amount of the state's film tax credit. Feature films, television series, pilots, and TV movies and miniseries that complete at least 75% of their stage work at a qualified production facility are eligible for a 35% refundable tax credit.

The Empire State kicked off its "Made in NY" incentive program in 2005, and since then has seen a surge in production. In 2006, the city hosted 34,718 location shooting days, a 49% increase over the 23,321 shooting days in 2004.

FBLA had a talk with an industry insider. We asked him if he thinks this is going to be a start of runaway production to The Big Apple. He said,"Some of the major issues with filming in New York have to do with union strong holds - primarily the teamsters. Then there are all the logistical issues you have in order to film in the city that you don't have here. Thirty-five percent? That's something. But it doesn't change the fact that it's still really expensive to film there."

LA still cheaper after all these years.

Brace yourself -- FBLA did not win...uhm nor were we nominated...or even really aware of the award. What is that? A Slinky? Another reason to feel rejected?!

Anyway, Huffington Post won for best political blog. Congrats.

And NYTimes.com won 8 Webby Awards while LATimes.com won - 0.

That's right - it's the Pulitzers all over again.

From our anonymous tip jar:

Why was Paul Magers anchoring the 11 PM news Sunday night on CBS 2...could it mean that Laura Diaz is out and Sharon Tay is in ?...I hope so....

Developing...

Tom Hanks has a thing for Barack Obama, and, apparently, for typewriters.

Renaissance Malibu, the detox facility that has housed the shakes, shits, sweats and screams of some of Hollywood's hottest junkies, is moving -- leaving behind a 10-bedroom mansion that we can't imagine anybody would want to buy.

If you have that kind of scratch, why not buy a house you don't have to scrub down with lye? One question: Does the asking price include Daniel Baldwin, or do you have to pay extra for him?

Listen, Jossip, we don't care for Project Runway anymore than you do, but keep your your hot-pink hands off our city. You've been warned.

Associated Press: Indicted Hollywood private eye Anthony Pellicano said Wednesday he acted as a "lone ranger" while gathering information for his A-list clients and did not lead a criminal enterprise as prosecutors have alleged at his racketeering trial.

Nikki Finke: So the trial that would not end is finally ending with closing arguments. Not much of a Hollywood angle to report, except for the lawyer for LAPD Sgt Mark Arneson, who is accused of doing all those illegal law enforcement database investigations. I've been reading the coverage - anxiously awaiting the verdict on this end!

L.A. Weekly: "The sheer Alexandrian inventory of charges precluded (prosecutor Daniel Saunders) from engaging in the kind of narrative-tweaking storytelling that might have brought the eight-week proceedings to more vivid life.

L.A. Times: After all the testimony about Anthony Pellicano -- the industry titans who said he loyally helped them during troubled times, the harassed men and women who recalled being targeted at their most vulnerable times -- a federal prosecutor, in arguments Tuesday, reduced him from a powerful private detective to a "very well-connected and very well-paid thug."

Crazy!