Developer’s Son Acquires The New York Observer
Jared Kushner, the 25-year-old son of a wealthy New Jersey developer who was sentenced to prison last year, has bought The New York Observer, paying what one person familiar with details of the sale said was nearly $10 million for a majority stake in the weekly newspaper.
“I own The New York Observer,” he said yesterday.
Mr. Kushner said that he bought the newspaper because it was a marquee property in the media capital of the world, and that the opportunity to buy a newspaper did not come around very often. The paper’s relatively small circulation — 50,000 — belies its influence, particularly in New York’s media, political and real estate circles.
He also said The Observer was a good brand that could one day make a lot of money, though it now loses about $2 million a year.
Because every side of the transaction is private, it is difficult to precisely determine the financing behind the deal. It is not clear how much of a stake Mr. Kushner bought, but Arthur Carter, the current publisher of The Observer, is retaining some interest and will be offering the new owner strategic advice.
The Kushner name is well known to readers of The Observer and other media outlets, which have given thorough coverage to federal charges against his father, Charles B. Kushner, who was a major Democratic fund-raiser and contributor to James E. McGreevey, the former governor of New Jersey.
Charles Kushner was sentenced last year to two years in prison after pleading guilty to 18 counts of tax evasion, witness tampering and illegal campaign donations. He also admitted to hiring a prostitute to seduce his brother-in-law and having a videotape of the encounter sent to his sister, the man’s wife, in an attempt to get back at her for cooperating with a federal investigation into his business activities.
The elder Mr. Kushner now lives in a halfway house in Newark run by the Department of Corrections and is expected to be released in late August. A spokesman for his real estate company, Kushner Companies, said that the son, Jared, had worked for the company until recently.
Jared Kushner said he was proud of his father, but that he was his own man.
“I love my father,” Mr. Kushner said, “but I have worked to develop a separate and distinct identity in different projects I have worked on. The only difference is that this is far more public,” he said of his purchase of The Observer.
Mr. Kushner pledged to stay out of the editorial process and focus instead on improving the paper’s bottom line.
“I am here to help build the paper in a way that will lead to the best and most honest reporting, regardless of who is involved,” he said. “It is up to the editors and reporters to decide what should be in the paper. The headline in everything we do should be integrity.”
Peter W. Kaplan, the editor of the paper, said that Mr. Kushner had no agenda, adding, “He told me that he will not interfere with the paper, that editorially, the paper is ours.”
Mr. Kaplan said Mr. Kushner had told him that he had three objectives: to market the brand name of The Observer; to build its Internet traffic; and to provide resources for more news beats so that the paper could have what Mr. Kaplan called “a stronger paper with more constituencies and more advertising.”
He said that Mr. Kushner represented the 21st century in the newspaper industry. “In that sense,” Mr. Kaplan said, “his 25-ness is a huge asset. He is not weighed down by the debris of conventional wisdom.”
Mr. Kaplan said yesterday that he would be confirming the news of the sale to the newspaper employees on Sunday night and Monday.
“It’s a large part of my task to convey to them that Jared is very much a guy building a new business,” he said. “I’m not going to put the weight of any history on his shoulders.”
At least one staff member, Tom Scocca, a senior editor and the Off-the-Record columnist, said he was sanguine about Mr. Kushner owning the paper. “I don’t think that there’s any great sense of dread or fear about this,” he said. “I think Arthur has had the paper these many years because he cares about it, and I’d be very surprised to discover that he had sold it in a way that’s rash or ill-considered.”
Mr. Scocca also said that Mr. Kushner was not particularly tainted because of his father.
“Every pile of money that is enough to buy a newspaper is disturbing if you look closely enough at it,” he said. “But I don’t think he has any reason or need to protect the existing press barons from scrutiny. This is an exciting move.”