David Pecker is getting into the nightclub business. Pecker, the chairman and CEO of American Media (publisher of such titles as the National Enquirer and Fit Pregnancy) is investing in a firm called Host Committee, which is attempting to make over the world of New York night life through social media.
Pecker is contributing an undisclosed portion of a $2.5 million funding round in Host Committee, which is Andy Russell’s latest baby. Russell, the former nightlife supremo behind the phenom Moomba, is exerting his skills at organizing groups of people in this latest venture.
Also chipping in are former MySpace boss and ex-MTV digital chief Jason Hirschhorn, hedgie Paul Tudor Jones of Tudor Investment and Andrew Siegel, the senior vice president of strategy at Advance Publications.
The idea behind the venture is to help club owners fill excess inventory in early evening hours by convening interest groups through social media. Russell learned the digital media world at the knee of former AOL executive and now Clear Channel CEO Bob Pittman.—Claire Atkinson
Exchanging blows
How depressing! That was the immediate reaction of Chris Keith, former chief technology officer of the venerable New York Stock Exchange, to news of its planned $8.2 billion blockbuster sale to InterContinental Exchange.
“Yes, it’s really sad,” Keith, CEO of Exchange Lab, a trading technology company in New York, told On the Money. “The NYSE was like one of those antebellum Southern plantations, which, in my day, had a certain amount of grace. Certainly it was much more in the public’s interest than almost any other institution in the financial industry.”
Keith, who left the exchange almost a quarter- century ago, was not all that surprised by the stunning news last week. “The NYSE had absolutely no ability to improvise or innovate,” he said. “All the senior executives I knew were excellent relationship managers, but there wasn’t an ounce of innovation in any of them.”
Today, the equity trading business at the NYSE is a shadow of its former self. The celebrated trading floor has seen its market share of trading in NYSE-listed stocks shrivel to 20 percent of overall volume so far this year.
That’s a steep drop from 40 percent in 2007, and from an 80 percent-plus market share just a few years before. Today, the Big Board is part of a larger public entity, NYSE Euronext. It has expanded into derivatives and other businesses.
But the irascible Keith is not impressed. He thinks the NYSE made too many excuses about its inability to make more money out of its fading equities business.
“People do make money in equities,” Keith said. “The NYSE had one of the great brands of all time, and it was worth a ton of money. You would have thought someone would have done something to maintain the quality of that brand.”–John Aidan Byrne
Gold rediscovered
Never mind the recent dip in bullish gold prices. GoldBar, a hangout for celebrities like Justin Timberlake and Jessica Biel, and its new owners are betting all that’s gold really does glitter.
They’ve spent close to a million dollars, between the purchase and major renovation of the SoHo club that once attracted Jay-Z and Beyoncé and Penelope Cruz.
Shaun Rose, an owner who was the former director of operations at Hudson Terrace, said GoldBar is a true New York brand that is known worldwide. He and his partners at GoldBar, Johnny Lennon and Udi Vaknin, who managed Sushi Samba, have expansion and product plans.
The first cities in which they are actively pursuing new opportunities are London and Miami.--Julie Earle-Levine
Bad energy
Blackstone did not see value in what became private equity’s biggest blackout.
Blackstone Group in 2006 considered bidding for TXU (since renamed Energy Future Holdings) in the largest leveraged buyout of all time. KKR and TPG Capital had reached a deal for the utility and were negotiating with the board. Blackstone then allegedly made a push to join the bidding team.
Blackstone Managing Director David Foley, after studying TXU, wrote in an internal e-mail, “The deal is dead. There is not enough [profit for us],” according to Blackstone’s lawyer, speaking at a hearing this week about private-equity firms allegedly colluding when buying companies.
Goldman Sachs, KKR and TPG Capital in 2007 closed the $45 billion deal. Now, five years later, the company is in technical default.–Josh Kosman