New York media types are not easily startled, but when Jared Kushner became the Big Apple's newest newspaper proprietor, more than a few eyebrows were raised. The son of a New Jersey property millionaire, Kushner reputedly paid $10m for the weekly New York Observer. He was 25 years old and had graduated from Harvard just three years previously.
The Observer occupies a unique position in the media firmament to go with its distinctive pink newsprint. Founded in 1987 by the leftwing investment banker Arthur Carter, it is known for gossipy long reads about pop culture, politics and property - making it a kind of cross between the Financial Times and Grazia - and is required reading for New York's political, media and celebrity elites. It is where Candace Bushnell's Sex and the City column first appeared in 1994, and Observer scoops have included revealing Salman Rushdie and Padma Lakshmi's divorce. More recently, it has been the first to report on many of the crises afflicting American media.
The digital effect
But the digital age has seen the paper's fortunes wane: it has annual losses of $2m and circulation is barely above 50,000. "With regards to leverage our company is now conservatively leveraged with no real maturities coming in the next few years. We see this market as ripe with opportunities and hope to stay active," says Kushner.
Some of what Kushner Properties owns has been reported as being highly leveraged, in particular the $1.8bn office building 666 Fifth Avenue. The lead lender for that deal was Barclays, but Kushner fortunately sold a controlling interest in the retail portion of 666 Fifth Avenue just prior to the credit well running dry.
Kushner, now 27, has retained the paper's veteran editor, Peter Kaplan, but since he took over the Observer, he's converted it from a broadsheet to a tabloid, increased its reporting team, reorientated its website towards breaking news and created a host of websites.
Kushner's celebrity girlfriend (Ivanka Trump) and millionaire father, who spent time in jail, make his life seem like that of a protagonist of a Scott Fitzgerald novel. Or to put it another way, if he didn't own the paper, it's a safe bet his fortunes would be chronicled in its pages.
He admits to being an accidental proprietor. Owning a newspaper "had never crossed my mind," he says. " When I heard the paper was for sale, it seemed like a very interesting property. I looked at it almost like a Park Avenue building that didn't have any windows." Was he even familiar with the paper? "I didn't really know much about it until I was going to Harvard. It was never a paper I would look to buy - but whenever I saw it, I found it incredibly smart, witty and it had a unique perspective. But I really didn't know about it. It wasn't properly marketed."
Kushner beat a bid from Tribeca Enterprises, headed by Robert De Niro. "When I first called Arthur Carter about buying the paper, I thought I had a one in a million chance," he says. " But I figured, it's a few minutes of my life. The more I thought about it, the more it motivated me to keep calling him and to get a meeting."
The Observer turned tabloid 18 months ago. "I began talking with Jared about the paper and I thought, 'let's make it a smart tabloid,'" Kaplan says. "A paper that Jared would get a kick out of and relate to."
The paper is often seen in Upper East Side living rooms - though hidden from view in case any visitor happens to have been the subject of a "snarky" profile that week. "I was taking something that I thought had really just slided," Kushner says. "The content was still very good but the way it was presented was far below today's standards." As part of the revamp, he boosted the property coverage ("real estate is like porn for rich people") and created Politicker, an ambitious online hub that plans to host 50 sites, one for each American state. "It's politics for politicians as opposed to voters," Kushner, whose family are major donors to Democratic politicians, maintains. "I want every mayor, local official, legislator, congressman and state senator leaking information and lobbying our writers every day to make sure we keep in good standing."
His paper, Kushner insists, punches above its weight: "We speak to the wealthiest and most influential people in the city. Politicians often say to me, 'articles in the Observer don't get me votes, but you get me money.'" And the Observer is also bringing in cash, with revenue up 40% this year - although Kushner estimates it will be two years before it turns a profit.
It is perhaps unsurprising that Kushner admits to being worried about the industry, given that American papers have been undergoing a collective nervous breakdown of late. " I'm definitely scared about newspapers," he admits. "The problem is nobody wants to catch a falling knife and nobody knows where things will stabilise. The value of newspapers has dropped significantly." Is the worst over? "I think we still have more pain to be felt."
Softly spoken, polite and personable, Kushner is different from many bombastic New York tycoons. One wonders if this attitude derives from seeing his father, Charles Kushner, who built up the family's property empire, released from prison in 2006 after spending 16 months inside for witness tampering, tax evasion and filing false campaign reports. "You see in life that things can be taken from you, whether it's money, status or freedom," Kushner says. "But the things that can't be taken are the things that are most important to work to achieve, such as love and family and friendships."
The episode perhaps also accounts for his precociousness. "I was raised to work for my father when I was four," he says. "He was arrested while I was in school. I ran my own business when I was 19, buying condos and renovating apartment buildings." Kushner bought the Observer with investments made while at Harvard.
Out of the public eye
He peppers his conversation with modish-sounding statements ("browseability is the key online", "the physical paper is a metaphysical embodiment of our newsgathering") but in some respects he is a throwback to the old-school newspaper proprietor. He refuses to discuss his relationship with Ivanka Trump, the businesswoman daughter of Donald Trump. Contrary to recent speculation, the pair are not engaged, and Kushner will only say: "It's an interesting situation because I want to encourage people to talk with my journalists, but not speaking with other journalists [about my private life] is in some ways a double standard. I struggle with it but I really value my personal privacy and recognise that little good can come from being in the public eye."
In contrast to Ivanka's father, the pair operate discreetly. I witnessed them not uttering a word of protest when turned away from George Clooney's Armani party at Manhattan's Bungalow 8 nightclub in May. Donald Trump has long been an Observer fixture but Kaplan insists the relationship is not problematic: "There's Ivanka, Jared's friend, and Ivanka the news topic. They never collide."
Kushner refuses to rule out further changes to the Observer. "I don't think we'll be all online anytime soon but we took it to a tabloid and maybe we'll take it to a glossy," he says. But despite his reservations about the state old media's in, some observers think Kushner will soon be expanding his paper dreams. He was linked earlier this year with buying the Long Island newspaper Newsday - ultimately bought by US TV company Cablevision - and New Jersey's the Star-Ledger. "I can see myself adding a paper at the right time if I find the right deal," he says. Time, after all, is on the young mogul's side.
Curriculum vitae
Age 27
Education
Frisch school, New Jersey; Harvard University; New York University, Stern School of Business and School of Law
Career
2003 Works full-time for his father's company Kushner Properties
2006 Buys the New York Observer for a reported $10m
