GOTHAM GIGS ILLMATIC ! Filmmaker’s hip-hop doc to open CRAIN’S® NEW YORK BUSINESS Tribeca P. 1 0 VOL. XXX, NO. 14 WWW.CRAINSNEWYORK.COM APRIL 7-13, 2014 PRICE: $3.00 Wall St. goes nuts over these Mad Men Recent ad-tech IPOs raise expectation that similar Silicon Alley startups will go public BY MATTHEW FLAMM Advertising-technology companies, which have taken the mystery out of Don Draper’s old business and re- placed it with algorithms, got a big boost last week with the initial public offering of the Rubicon Project ad ex- change. The stock spiked more than 30% above its $15 opening price—and though Rubicon is based in Los Ange- les, its success inspired cheers and a sigh of relief across the ad-tech sector in New York, where at least a half- dozen companies are considered can- WHAT LIES BENEATH: didates for an IPO. A worker from Optical Ad tech may be among the most ar- Communications Group cane sectors in Silicon Alley, requiring checks on one of the See AD TECH on Page 28 company’s fiber-optic cables. Deal with top LICH Crossed Wires bid faces To make broadband BY MATTHEW FLAMM 1 gigabit per second (50 times faster service than what most New Yorkers faster and cheaper Mayor Bill de Blasio talks of making experience) for $70 a month. hurdles broadband cheaper and faster. One so- But New York’s subterranean sys- in slow and pricey lution may be lying beneath his feet. tem—built for telephone lines after As vetting process A vast conduit system runs the Great Blizzard of 1888 and owned New York, look no through Manhattan and the Bronx since 1891 by Empire City Subway, or begins, would-be that could support a thriving broad- ECS—also highlights the challenges operator’s plan further than ... band marketplace—or a municipal the city faces in updating its broad- fiber network similar to the one in band infrastructure. Like much of un- raises red flags galore down Chattanooga, Tenn., which delivers derground New York, portions of the See FIBER on Page 27 BY BARBARA BENSON buck ennis When the State University of New York announced last week that Brook- 14 REPORT HEALTH CARE lyn Health Partners was the top candi- 5 It’s a race to the stratosphere as hospital date for consideration to take over its Long Island College Hospital cam- executives pull in mega-millions P. 15 pus, community activists and unions celebrated the promise of a full-service THE LIST Top hospital salaries P. 19 hospital operating in Cobble Hill, NEWSPAPER See BROOKLYN on Page 28 71486 01068 0 EDITOR’S NOTE Pulse of NY FYICRAINSNEWYORK.COM I introduced myself last month to a similarly solo stranger at a cocktail High-speed trading reception before the annual dinner of the Citizens Budget runs into trouble Commission. “ ‘Editor of Crain’s,’ ” ast week, high-speed trading was she repeated enthusiastically.“Do transformed from a nerdy topic of you know Barbara Benson?” I get interest only to Wall Street traders that a lot, especially when the Glenn Coleman L and regulators to the target of public questioner is a New York hospital outrage.The catalyst, of course, was executive, as this stranger-no-more Michael Lewis’ book Flash Boys, but New turned out to be. It was as if I were her conduit to a York state Attorney General Eric fabulously unobtainable celebrity, like Beyoncé. Schneiderman has done his bit by That’s our Babs: She is a rock star (though hardly a announcing an investigation into the istockphoto diva) in the wild world of New York health care, the business, which he colorfully described as “Insider Trading 2.0.”Then last Friday, U.S. Attorney rare journalist who knows as much about the state’s General Eric Holder confirmed an FBI probe into the practice. ¶ High-speed traders use cutting- multibillion-dollar health care industry as its biggest edge technology to dart in and out of shares at lightning speed and also use their gadgetry to get players do. And often knows more. “I hadn’t even a glimpse of what the market is doing milliseconds before others. The concern is that these told my board yet!” more than one CEO has traders use their edge to relentlessly front-run other investors and force them to pay higher prices. marveled in a voicemail or email after reading a The fact that a high-speed trading firm called Virtu Financial recently disclosed that it lost money Barbara Benson news story. Really, there’s only one trading only one day in the past five years suggests certain traders enjoy considerable—and thing an editor can do with such a talent: Ask her to maybe illegal—advantages. ¶ High-speed advocates vigorously denied last week that anything is join your senior management team. I am pleased to amiss, but the ground is quickly shifting. Manhattan-based Virtu last week said it would delay its inform our thousands of Barbara Benson fans that planned initial public offering. And Goldman Sachs said it would leave the New York Stock she has been promoted to assistant managing editor Exchange trading floor and would support rules to rein in high-speed trading. —aaron elstein of Crain’s New York Business. From her new perch, Barbara will lead the further expansion of the Crain’s Health Pulse newsletter franchise that she has built, BYE-BYE, BLYTHE. Blythe Masters,the ping a board seat. The move comes head of JPMorgan Chase & Co.’s three years after it invested $204 HOORAY! scoop by scoop, into New York’s leading source of commodities unit and one of the million in the bookstore chain. Lib- JUNKET-FRIENDLY local hospital and health care industry information. highest-ranking women on Wall erty will have a stake of less than 2% Brooklyn cheerleader She’ll help us break more news through the daily Street, is leaving the investment in the bookseller, which will be free Marty Markowitz ARTSY lands his dream job Health Pulse, deliver more analysis through our bank after 27 years on the job. to develop its own strategy. ... selling the world on JPMorgan is selling parts of that di- TO GO GLOBAL. The website, a one- the five boroughs explanatory journalism online and in print, and vision to a Swiss trading firm for stop art shop, has raised $18.5 mil- for NYC & enlighten one of the city’s most vital and complex $3.5 billion. ... NY IS TAXING. For the lion in Series B funding led by ven- Company. industries through thoughtfully programmed third straight year, New York state ture firm Thrive Capital. The residents had the highest tax burden Manhattan-based startup plans to conferences that bring together the leading figures in in the nation, according to a report use the funding to expand interna- the field. I’d call all that a healthy development for by the Tax Foundation.New Yorkers tionally. Artsy’s founder, Carter New York business. spent 12.6% of their per-capita in- Cleveland, and Thrive Capital’s OY VEY! come on state and local taxes in managing partner, Joshua Kushner, DESPITE 2011. This is attrib- are members of this an “A” grade, uted to the state’s ‘For whatever year’s Crain’s 40 Un- Dominique Ansel high income- and Bakery—home of THIS WEEK IN CRAIN’S der 40 class. ... the Cronut—was property-tax rates, reasons … POTENTIAL CITI BIKE shuttered after a RELIEF. IN THE BOROUGHS-------------------------- 3 and high property Sen. Charles mouse was values and salaries. ... despite their Schumer introduced spotted. IN THE MARKETS---------------------------------- 4 TAVERN ON THE GREEN successes … legislation that, if THE INSIDER -----------------------------------------------6 TO BLOOM. After four passed, would per- years and a $20 mil- morale in this mit bike-share istockphoto SMALL BUSINESS ------------------------------6 lion renovation, the organization membership to be REAL ESTATE DEALS -----------------------8 Central Park restau- purchased with pre- year,a 14% jump from the same time rant will reopen was awful’ tax dollars, allowing a year earlier, according to Douglas BUSINESS PEOPLE-----------------------10 April 24. The —Police Commissioner the money-losing Elliman Real Estate. Average price OPINION --------------------------------------------------------12 eatery’s new owners Bill Bratton, alluding to the Citi Bike to raise its and average price per square foot for spent the past two NYPD’s stop-and-frisk era prices while having the quarter also hit the highest lev- GREG DAVID--------------------------------------------13 years dealing with the federal govern- els since the brokerage started track- REPORT: HEALTH CARE----------15 construction and fi- ment offset some or ing the market 15 years ago. ... nancial snafus.Reservations are now all of the cost increase on riders. ... LATER, DAVE. Late-night television NEW YORK, NEW YORK THE LIST --------------------------------------------------------- 19 LIBERTY MEDIA APARTMENT SALES HIT NEW HIGHS. Larry Kaye is moving from a being accepted. ... host David Letterman,66,will retire CLASSIFIEDS ----------------------------------------- TURNS PAGE. law career to producing a play 24 John Malone’s media The median price for a Manhattan from CBS in 2015 after 33 years on company is slashing its stake in condo and co-op reached a record two networks. on Broadway. P. 29 SOURCE LUNCH--------------------------------30 Barnes & Noble by 90% and drop- $972,428 in the first quarter of this —emily laermer CORRECTIONS (SEE PAGE 27) VOL.XXX,NO.14,APRIL 7,2014—Crain’s New York Business (ISSN 8756-789x) is published week- STORIES TO WATCH THIS WEEK ly,except for double issues the weeks of June 23, July 7, July 21, Aug. 4, Aug. 18 and Dec. 22, by Crain Communications Inc., 685 Third Ave., New York, NY 10017.