What Should Happen to Jared Kushner's New York Observer? Media Pros Offer Advice

Jared Kushner and Joseph Meyer -Split- Getty-H 2017
Peter Kramer/Getty Images; Astrid Stawiarz/Getty Images

A look at where the paper stands now amid rumors of a sale to National Enquirer owner American Media, as NYC's top power players from Alec Baldwin to Jeff Zucker weigh in.

Former employees of the New York Observer rang in 2017 by commencing a grim ritual: Going to the publication's website, digging up their stories and copy-pasting them into Word documents. "We have to pull them before they disappear," a former editor warned me. (I worked at the paper from 2010 to 2012).

Observer Media owner and publisher Jared Kushner was on his way to Washington, D.C., for an unspecified advisory role at the White House, and rumors were swirling that he was selling the Observer to American Media International, the publisher of the National Enquirer.

From the point-of-view of former and current staffers, Kushner might as well have gifted the Manhattan media institution to AMI as a thank-you for its support of his father-in-law's presidential bid. AMI's CEO David Pecker is a close friend of Donald J. Trump and, according to reports, the Enquirer published stories planted by his campaign while buying and burying ones that would potentially hurt him.

Politics aside, the Observer was on life support. When Kushner bought the paper, in 2006, it was a salmon-colored weekly must-read for New York power brokers that needled the city's rich and powerful with literary reportage. Its circulation was optimistically quoted as 50,000, but as longtime Observer writer George Gurley puts it: "Those were the 50,000 — or 10,000? — readers you really wanted."

Since its founding in 1987, the Observer had been a springboard for media stars like early editor-in-chief Graydon Carter,who left the paper to run Vanity Fair; his successor, Susan Morrison, now a top editor at the New Yorker; Peter Kaplan, whose 15-year run as editor-in-chief represented the paper's heyday; and writer Candace Bushnell (whose Observer column "Sex and the City" became the basis for the HBO show and films). The paper groomed a generation of reporters and editors (later found at Gawker, The New York Times, Vanity Fair, New York, The New Yorker and other outlets) who spoke truth to power so stylishly that power couldn't help but come back for more.

But by January of this year, the Observer had been reduced to a digital-only publication with a staff of about 20 reporters and editors whose work was being buried by a contributor network of freelancers churning out lifehacks ("Unable to Lose Weight? Bacteria in Your Gut May Be the Culprit") and right-wing hot takes ("Obama Is Wrong to Claim Hillary Clinton Could Lose Because She's a 'Powerful Woman'").

Although the sale to AMI (which has denied discussions took place) did not materialize, the Observer did change hands in a fashion. Before the inauguration, Kushner sold his stake of the Observer to the Kushner family trust, a move that does not precludes a sale to AMI or anyone else. On the question of whether the Observer is on the block, Joseph Meyer, Observer Media CEO and Kushner's brother-in-law, is emphatically equivocal. "The [Observer] is not for sale," he told THR in an interview. "However, we are constantly approached by strategic partners who are interested in it," he added, "and we're always open-minded as to how to think about the Observer's long-term success."

Meyer, a tall and well-groomed 37-year-old former hedge funder in Kushner's mold, assumed the role of Observer publisher in January. But he sees himself foremost as the founder of Observer Capital, whose portfolio includes Observer Media, co-working space Knotel and B2B digital marketing company Source Media.

When Meyer called a meeting to articulate his vision for the Observer on Nov. 11, three days after Trump was elected to the White House, the mood in the publication's downsized office in the Financial District (a far cry from the crowded Beaux Arts townhouse on East 64th Street it had long called home) was, according to one current staffer, "miserable, like funeral miserable." The staff, like most others, had expected Trump to lose, and pragmatically speaking, his defeat would have meant a reprieve from the growing debates, both internal and external, about the Observer's conflicts of interest. "We all wanted him to lose so we could get on with our jobs," the staffer (who, like most current employees, asked not to be identified in this piece) said.

Instead, Trump was president, and Observer rank and file learned from The New York Times that the Observer would cease print publication, effective immediately. Addressing the newsroom, Meyer described what he called Observer 2.0, an all-digital, national thought leader that would formally jettison the "New York" from its name. After all, Meyer has pointed out, 85 percent of its traffic came from out of state.

Internally, Meyer, whom Kushner appointed CEO in 2013, is seen as a shrewd, cost-cutting strategist with a short fuse for those who disagree with him — or call into question his grasp of the media business. Meyer once erupted at the Observer's finance department, who were explaining ad placement to him, according to one high-ranking former employee, telling them, "We're not in the business of journalism."

When Kushner bought the Observer, seeking influence among New York's social elite, the publication was still very much in the business of journalism. As heir to his family's multibillion-dollar New Jersey real estate development company, Kushner could afford the paper's $10 million price tag. But the cost of reaching the city's elite was higher, an additional $2 million in annual losses, as founder and previous publisher Arthur L. Carter often said, and, unlike Carter, Kushner wanted to run the Observer like a proper business.

As a trusted advisor in the Trump White House, Kushner is often held up as an entrepreneurial wunderkind with a savant-like mind for business. Tapped by his father-in-law to head the Office of American Innovation, Kushner announced "The government should be run like a great American company." But in his decade-long ownership of the Observer, Kushner struggled to overcome the same challenges — declining print advertising revenue was never recouped online — that plagued nearly every other predominantly print publication. Kushner cut the Observer's editorial budget, robbing the paper of its weekly punch and leading to the rapid-fire departure of five editors, starting with the beloved Kaplan, who left in 2009 (he passed away four years later). In 2013, Kushner stabilized the editorial leadership by installing Ken Kurson, a family friend and former Republican strategist, as editor-in-chief.

From the outside, it occasionally looked like the paper was being used to advance the Kushner family agenda. In 2014, the Observer published a lengthy takedown of New York's Democratic Attorney General Eric Schneiderman, who was pursuing legal action against Trump for making fraudulent marketing claims at the for-profit Trump University. (Trump settled the case for $25 million days after the election.) The 7,000-plus-word article, which portrayed Trump as the victim of a political smear campaign, was first assigned to the manager of a New Jersey ice cream shop that Kurson frequented.

Kurson declined to comment for this story. But more than a half-dozen reporters and editors who work or worked under him insist that he protected them from the lion's share of Kushner's influence. Yes, members of the Trump family — which, according to Observer legend, was once banned from the pages of the newspaper for being too press-hungry — were included in the Observer's click-baity real estate and philanthropy power lists. One reporter was asked to review an obscure film that happened to star one of Kushner's friends. Another was discouraged from covering the successes of one of Kushner's real estate rivals. "But we were never asked to go easy on Trump," a former reporter said. When it came to stories that appeared to carry water for Kushner's in-laws, the reporter said, "Ken personally assigned them to his freelancers — I don't know where he found these people — and ran them without our input."

At the same time, Meyer was launching a contributor network, recruiting little-known writers to contribute opinion pieces at rock-bottom rates — as little as $50 a post, according to current and former staffers — but reward them with traffic bonuses if their posts went viral. It incentivized incendiary, even heinous posts like "Islamist C—s," freelancer Jacques Hyzagi's take on the Charlie Hebdo shootings. Full-time employees were mortified by the contributors' work. "The top editors had basically zero involvement in it," said another former staffer, "and yet 'contributors' were published with their bylines next to actual reporters with little or no distinction between the two."

All this meant that by the end of 2015, the Observer, once known for its distinct voice and uniform fascination with power, had become scattershot at the exact moment it was thrust under the glare by its publisher's father-in-law's presidential campaign. Staff were demoralized and embarrassed by Twitter chatter that contributors like Michael Sainato, who published Clinton campaign leaks on the Observer, had turned the paper into a propaganda machine for Trump.

The issue came to a head in April, when New York magazine reported that Kurson, a onetime speechwriter for Rudy Giuliani, had quietly edited the speech Trump was to give before the pro-Israel lobbying group AIPAC. Six Observer reporters confronted Kurson in his office. "Ken was so maddeningly reasonable about it," said a former staffer who was present. "He told us he would have helped any candidate who asked." However, Kurson agreed not to do it again, and then-senior politics editor Jillian Jorgensen drafted a memo making it policy.

But the following week, the paper was in the news again when it endorsed Trump in the New York Republican primary. The Observer's editorial page represents Kushner's views, so the choice wasn't shocking (the paper endorsed Hillary Clinton in the Democratic primary — and did not make a presidential endorsement in the general election). But the piece was surprisingly impassioned. Kushner's proxies gloated about how Trump's rise had eluded the "nattering" "cognoscenti — the media elite, the professional political class and the people largely insulated or directly benefitting from the failures of the last seven years." In other words, the Observer's readership and editorial purview since its inception. Now, the publisher wrote, "their opinions have become increasingly irrelevant."

If the coastal elites the Observer once represented are now political poison, it's possible that Kushner's stature in Trump's purportedly populist administration could inject the Observer with new relevance. "It has a surprising opportunity, in that there are those readers who believe that the White House and senior aides are closely reading the publication," said David Wallis, the former deputy editor of the Observer who now is the opinion editor at The Forward. "I don't know whether that's true, but the perception is something to capitalize on."

The last time Kushner met with members of the Observer staff was last May. Kurson took the top editorial staffers out to lunch at Michael's, according to multiple sources, and then to the Kushner Companies' offices at 666 Fifth Ave. The goal, he said, was to "clear the air," according to staffers who were present. With his now famous soft-spoken manner, Kushner downplayed his role in his father-in-law's campaign, giving those present the impression that it would all be over soon. But Trump's win complicated the paper's mission, without actually sounding its death knell. "Is it possible to take a newspaper behind a building and shoot it?" asked former Observer reporter Andrew Goldman. "I think that would be a fitting next phase."

Others disagree, including some that occupy New York's top echelon of media power, who answered THR's question: Who should buy the New York Observer?

Jeff Zucker, President, CNN Worldwide
Michael Bloomberg

Dean Baquet, Executive editor, The New York Times
Someone who wants it to survive. It's a great voice on the cultural history of New York.

David Remnick, Editor, The New Yorker
Someone, anyone, who is willing to follow the Jeff Bezos model in D.C. He seems to have the right idea with The Washington Post: spend on editorial talent and trust that good things will happen.

Adam Moss, Editor-in-Chief, New York magazine
Jeff Bezos would be ideal, though I think he's got his hands full. He's the definition of a model modern media mogul. Someone who doesn't want to get in the way of the smart and enterprising reporters and editors he hires, with the bucks and technological wizardry to make it work.

Ben Smith, Editor-in-chief, BuzzFeed
Charlie Kushner, obviously.

Don Lemon, Host, CNN Tonight
The thriving New York Times.

Trevor Noah, Host/executive producer, The Daily Show
The bigger question is, should anyone buy the New York Observer? We're living in a world now where everything is fake news and everything can so easily be undermined by each side saying that it's not true according to beliefs. So is there really business for news right now? That's more of the question I would be asking.

David Rhodes, President, CBS News
They still charge for that?

Jesse Angelo, CEO/publisher; Editor-in-chief, New York Post
Jimmy "The Rent is Too Damn High" McMillan. [Founder of The Rent Is Too Damn High political party in New York, McMillan has run for office multiple times, announcing his candidacy for the Republican nomination for president in 2016, then withdrawing to retire.]

Phil Griffin, President, MSNBC
Preet Bharara [U.S. attorney for the southern district of New York from 2009-17].

Joe Scarborough, Host, Morning Joe
One of our friends. It'd be nice to have a newspaper.

Alec Baldwin, Actor, author, podcaster
People who have a spare moment after reading The New York Times and The New Yorker.

Additional reporting by Alex Bhattacharji, Peter Flax, Eriq Gardner, Marisa Guthrie, Natalie Jarvey, Michael O'Connell, Bryn Sandberg, Tatiana Siegel