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Local Damage Mounting in Writers' Strike 20080107p001CN_.qxp 1/4/2008 9:17 PM Page 1 REPORT TOP STORIES ’08 OUTLOOK Traffic caps halt City anxious Virgin America’s as Wall St. JFK expansion plan falters PAGE 2 ® PAGES 13-17 Banks burned by bad loans as problems spread VOL. XXIV, NO. 1 WWW.CRAINSNEWYORK.COM JANUARY 7-13, 2008 PRICE: $3.00 beyond subprime PAGE 2 IOWA CAUCUS FALLOUT Local damage ONE DOWN: Crain’s picks 5 Barack Obama local stocks to ride captured the 38% biggest share of Barack Obama Democratic votes mounting in in tough 2008 in the Iowa INVESTING, PAGES 3-4 caucus. 30% Suzy Welch gets John Edwards writers’ strike $1 million for a new book 29% tailspin,” says John Ford, president Hillary Clinton Thousands jobless, of studio mechanics union Local NEW YORK, NEW YORK, P. 6 bloomberg news suppliers take hits; 52.“Everyone is out of work now.” The writers began their strike The rules Crain’s pilot season could in November. They are seeking lives by, in print Obama’s NY allies residuals from the Alliance of Mo- be jeopardized tion Picture and Television Pro- and online ducers for work that appears on the BY MIRIAM KREININ SOUCCAR GREG DAVID, PAGE 11 move into spotlight Internet and other new media. About a dozen TV series are david letterman and Conan shot in New York, including 30 The New Yorkers who en- O’Brien might be back on the air, Rock and Law and Order; they have BUSINESS LIVES African-American dorsed Mr. Obama exulted in but the Writers Guild of America run out of scripts and stopped film- WINTER BLAHS? pols bucked party; Iowa’s perceived ideals—a more strike that put them in reruns for ing. A growing number of feature 10 ways to heat up the inclusive society and reforming the past two months con- films slated to get under coldest months in the Hillary supporters government—while hoping that tinues to wreak havoc on way this month are being Big Apple PAGES 23-24 their personal stars could rise if the New York’s film and tele- postponed because scripts eye Feb. 5 fight Illinois senator continues his con- vision production indus- 11NUMBER OF need rewriting. TV pilots filmed quest this week in New Hampshire try. in New York City Negotiations between BY ANNE MICHAUD and beyond. The shutdown has left last year—a WGA and AMPTP have All of the elected officials pub- thousands of the area’s record. broken down, and no fur- the handful of New York politi- licly backing Mr. Obama in New 78,000 production work- ther talks are scheduled. cians who defied the powerful Sen. York are black. State Sen. Bill ers unemployed and many of the The last writers’ strike, in 1988, Hillary Rodham Clinton to sup- Perkins, who represents Harlem, 4,000 film-related businesses, like lasted five months and paralyzed port Sen. Barack Obama for pres- was the first to break from the pack prop houses and caterers, strug- the industry. ident feel that their gamble is pay- in May with his endorsement of gling to stay afloat amid their worst “Everyone talks about the writ- ing off, following his victory in the Mr. Obama, even as Mrs. Clinton crisis in more than a decade. ers, the writers,” Mr. Ford says. Iowa caucuses last week. See THE INSIDER on Page 7 “The situation has gone into a See WRITERS’ on Page 8 AT DEADLINE DISNEY’S LATEST BROADWAY EDUCATION PRODUCTION, THE LITTLE Mermaid, opens Thursday, and sources say it has already booked $15 million in advance ticket sales.The musical has Up in arms over gifted programs been selling out in previews. For the week ended Dec. 30, it broke a house record for the help them navigate the application Lunt-Fontanne Theater, New rules could process for the best public school grossing more than $1.3 halve admissions; programs. million. The frenzy is over the Depart- some parents ment of Education’s announce- THE EMBATTLED ONLINE ment two months ago that it had GROCER FRESHDIRECT IS threaten to sue overhauled requirements for its warning its customers that gifted and talented program—the they can expect delivery delays BY MIRIAM KREININ SOUCCAR latest “It” schools for the elemen- throughout January as a result tary set—making it harder than of staff shortages.The frantic parents are teaching ever to secure one of the coveted company needs to replace their 4-year-olds how to fill in the spots. workers who left in late circles on standardized “bubble” “This is what everyone is talk- December when immigration tests and hiring tutors to quiz the ing about,” says Sarah Gardner, an authorities began an kids using multiple-choice ques- Upper West Side resident who is See AT DEADLINE on Page 2 tions. They are shelling out thou- considering such a program for her sands of dollars for consultants to 4-year-old daughter. “The stress level is very high for most people.” The changes—which the DOE 01 5 says could halve the number of stu- dents accepted into gifted class- es—come at a time when applica- ELECTRONIC EDITION tions for them are at an all-time high. The programs have become roger hagadone the top choice for the growing SOME MORE THAN OTHERS: NEWSPAPER Gifted programs have become the new status education for many See BATTLE on Page 9 middle-class New York families—even those who could afford private schools. 71486 01068 0 CNYB 01-07-08 A 2 1/4/2008 8:54 PM Page 1 AT DEADLINE Continued from Page 1 year with earnings and revenues investigation into the company’s exceeding 2006’s record levels. employment records during an unsuccessful attempt to THE BROADWAY HIT CYRANO DE unionize warehouse workers. BERGERAC, STARRING JENNIFER The Long Island City, Queens, Garner and Kevin Klein, ended grocer typically provides next- its run Sunday, but the play will day delivery service, but some live on. It was taped last week customers are reporting waits of and will air on PBS later this up to five days. year, followed by a DVD release. Cyrano joins a growing number THE HUDSON YARDS of Broadway productions COMMUNITY ADVISORY moving to the small screen. Committee is slated to issue a report this week on the five NBC PICKED THE RIGHT TIME OF developers’ bids for the West YEAR TO PREMIERE THE Side rail yards. It will express Celebrity Apprentice, the latest concern about the lack of iteration of Donald Trump’s Virgin America hits coherent plans for affordable long-running reality TV show. housing and the large scale of Going up against repeats of the proposed buildings.The Grey’s Anatomy and CSI last committee will send its findings Thursday, the seventh-season to the developers and the premiere of Mr.Trump’s show heavy headwinds Metropolitan Transportation won its time period among Authority, which owns the 26- viewers 18 to 49 years old with a acre parcel.The report, which is 4.5 rating—a 10% improvement based on the public’s comments over last year’s season-six Expansion plans at JFK stymied by new traffic caps on the plans, doesn’t support premiere. Apprentice’s 11 million one developer over the others. total viewers put it in third place, behind the Orange Bowl game BY HILARY POTKEWITZ MERRILL LYNCH & CO. IS on Fox and CSI on CBS, which EXPECTED TO REPORT ITS FIRST drew 13.5 million, according to barely five months after Virgin America launched cheap but classy flights unprofitable year since 2001— Nielsen Media Research. from John F. Kennedy International Airport to the West Coast, the and only its second in the last 20 upstart airline’s expansion has encountered stiff and unforeseen years—when it announces full- IN A DISMAL YEAR FOR RECORD year results as early as next COMPANIES, WARNER MUSIC headwinds. week.The nation’s largest Group gained significant market In mid-December, its chief rival, JetBlue Airways, picked up a brokerage firm is expected to share, figures from Nielsen powerful new ally and a wad of cash when Germany’s Lufthansa post an annual loss of about $1.9 SoundScan show. Album share took a 19% stake in the Queens-based carrier. Five days later, billion, its largest ever, due to went up 2.14 percentage points, steep write-downs of its to 20.28%, fueled by sales for federal authorities delivered an even bigger blow, capping mortgage-related holdings. At Josh Groban’s Noel, the year’s the number of planes that can take off and land at JFK at least for now, analysts surveyed top-selling album. Industrywide, 83 an hour during peak times for the next two years. by Reuters Estimates expect the album sales dropped 9.5%, firm to snap back strongly this despite digital increases. I “This will put a drastic limit on Virgin America’s growth plans at JFK,” says Eric Smith, an attorney CORRECTIONS with Schnader Harrison Segal & Lewis who is Sphinx Organization founder Aaron Dworkin’s name was misspelled in the Dec. 17 story an aviation expert. “It’s really going to have “Giving where it will do the most good.” to re-evaluate what its potential is in the A photograph with the Dec. 24 story on St. Vincent’s Midtown misidentified the pictured hospital, which was St. Vincent’s Manhattan. See VIRGIN AMERICA on Page 8 THIS WEEK IN CRAIN’S CRAIN’S STOCK PICKS -----------3 bloomberg news NEW YORK, NEW YORK----------6 THE INSIDER----------------------------------------7 REAL ESTATE DEALS------------------9 GREG DAVID ------------------------------------11 Bad loans start piling up WEEK IN REVIEW -----------------------12 25 REPORT: loans in the third quarter,more than prime area; now it’s also affecting a Charge-offs mount double the rate in the previous quar- series of other areas.” ECONOMIC OUTLOOK------13 in 3rd Q; problems ter and in the third quarter of 2006, Though charge-offs and delin- according to tabulations done for quencies are increasing, they have a SMALL BUSINESS ------------------- 19 spreading beyond Crain’s New York Business by re- ways to go before alarms sound search firm SNL Financial.
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