The New York Observer, a feisty and influential but financially troubled weekly paper, has been sold to the son of a politically disgraced New Jersey developer, and Editor Peter Kaplan said Sunday that the new owner represented “the next generation of newspaper publishers.”
Jared Kushner, 25, a second-year law student at New York University, bought the paper from longtime Observer owner and founder Arthur Carter.
Kushner, who is said to be independently wealthy, has pledged to run the publication with no involvement on the part of his father, Charles, sources close to the negotiations said. The purchase price was estimated to be $10 million.
“I think it’s great,” Kaplan said of the sale.
Jared Kushner “has a clear focus and a set of goals for the paper,” Kaplan said. “Arthur was thrilled to find him, because he felt that Jared was a younger version of himself. He’s part of a new wave of newspaper owners. He’s not going to be weighed down by conventional wisdom. He believes that newspapers are very important, and I’m delighted.”
The sale culminates Carter’s nearly six-month effort to sell the paper, which has a circulation of about 50,000 and reportedly loses nearly $2 million a year.
Earlier this month, a rumored deal in which Carter would have sold the paper to actor Robert De Niro and other business partners in his New York-based Tribeca Enterprises company collapsed.
Kushner, who will become the paper’s publisher, “believes the Observer is a tremendous brand with a unique, only-in-New York voice and editorial style,” Kushner spokesman Howard Rubenstein said. “He’s going to try to take the paper to the next level, working with its financial and operational performance, trying to increase its reach. But he’s not going to interfere in the editorial product.”
In a letter to the Observer’s staff released Sunday, Kushner said: “The only promise I will make on the business front is to keep a completely open mind. At 25, and with only non-publishing-related business experience, I am now equipped with two of the finest tools that a publisher could ever have: this fine staff, and the inquisitive energy needed to tackle convention.”
Under the agreement, Carter will maintain an undisclosed “interest in and influence over the newspaper, and his daughter, Mary Dixie Carter, will continue on as publishing director,” sources said.
The new owner’s father, a once-prominent Democratic donor and confidant to former New Jersey Gov. James E. McGreevey, pleaded guilty in 2004 to tax violations, and paid $508,900 in fines to the Federal Election Commission for campaign reporting irregularities.
Charles Kushner also pleaded guilty to obstructing a federal investigation into his affairs. He was sentenced to 24 months in prison.
Kaplan, who has been asked to stay on as editor, helped transform the Observer into a must-read for Manhattan’s political, cultural, media and real estate elites.
Although its main circulation base is the city’s tony Upper East Side, the paper has regularly broken stories about New York Times internal affairs and served up gossip about prominent New York politicians that other publications have missed.
The Observer, which has never turned a profit, needs to broaden its presence on the Internet amid stiff competition from New York-based websites like mediabistro.com and Gawker.com, Kaplan said in an interview this year.
The paper should also increase coverage of the city’s burgeoning independent filmmaking community and its links to Hollywood, he said.
Despite these challenges, Kaplan added, “the Observer’s best days are ahead of it. We are in a position to enjoy tremendous growth.”