When Jared Kushner swooped in to buy the New York Observer in 2006, he embarked on a mini media tour, posing with the paper at parties and sitting down with esteemed media reporters from The New York Times and New York magazine.
But after a decade as the owner of the iconic New York newspaper, Kushner appears to be angling for a much quieter exit.
WWD reported on Wednesday that Kushner was exploring a sale, potentially to American Media Inc., which owns the National Enquirer. And one New York media source previously told Business Insider, "I know from the rumor mill he's been trying to sell the Observer."
Kushner's close associates were quick to tamp down speculation.
"While Observer is not for sale, as one of the fastest-growing businesses in all of digital media, we are constantly being approached by potential investors and partners," Observer Media CEO Joseph Meyer said in a statement to Business Insider. He did not specify the identity of the potential investors or partners.
The purchase of the Observer, along with several other media properties, in 2006 marked Kushner's foray into expanding his influence beyond the successful family real-estate business, a personal quest that hinted at greater ambitions and vision within the New York media industry.
Kushner, the son-in-law of President-elect Donald Trump and the husband of his daughter Ivanka, has spent most of his time over the past 18 months in a different role. Since Trump launched his campaign, the 35-year-old confidante often played the behind-the-scenes foil to the bombastic real-estate mogul, shepherding his father-in-law's campaign through several major staff overhauls and maintaining ties with the Republican National Committee.
"It's hard to overstate and hard to summarize Jared's role in the campaign," VC billionaire Peter Thiel, Trump's biggest support in the tech world, told Forbes. "If Trump was the CEO, Jared was effectively the chief operating officer."
Like Trump himself, Kushner is an enigmatic figure even to many of his employees and business partners, seeming to relish doing things his own way while leaving people guessing about his true motivations.
"If the anti-Semitism rising up around Trump's candidacy and online presence didn't bother him as an orthodox Jew and grandson of Holocaust survivors, then who can fathom his moves as a publisher and mini media mogul? He's an enigma to me," New York University journalism professor Jay Rosen told Business Insider.
But a close look at Kushner's investments show an occasionally determined effort to establish himself as a media industry leader and hint at how he'd adapt to a potential role in the White House.
Business Insider spoke with more than a dozen people who know or have worked with Kushner. To some, Kushner's media moves stand as early examples of the real-estate scion's dexterity in adapting to unfamiliar territory, displaying a quick grasp of the facts, a wide-ranging intellect, and a disciplined fiscal management style.
But according to others close to Kushner, his frequent forays into digital and print media — a mishmash of new ventures and disjointed acquisitions — often lacked vision, cohesion, and passion. To them, his endeavors were marked by misfires that have left some wondering whether it was all just a half-hearted vanity project or simply an expedient stepping stone to prestige and influence.
One person close to Kushner told Business Insider that real estate has always been at the center of Kushner's professional life, describing his forays into media as him looking for opportunities to turn around sagging publications.
"In the scheme of Jared's professional life, this is like an appetizer," the person said. "Real estate is the core."
Kushner declined to comment for this article.
Name recognition
Kushner was born into the real-estate business as the youngest son of Charles Kushner, a New Jersey real-estate baron who fell from grace in dramatic fashion. When the elder Kushner was sentenced in 2005 to two years in prison for crimes including tax evasion and witness tampering, Jared, at 24, was suddenly handed the reins to the business.
Over the course of a decade, the younger Kushner became the second-largest landlord in the East Village, making splashy purchases that included Brooklyn's Watchtower, the Puck Building, and the $1.8 billion purchase of 666 Fifth Ave.
At the same time, he was amassing a collection of properties and developments throughout Manhattan, he set to work building a parallel mini empire of media properties that included everything from a Las Vegas weekly to luxury magazines and news blogs.
It was media, not real estate, that earned Kushner his first mention in The New York Times, in a 2006 story about his negotiations to buy the Observer.
The $10 million deal brought Kushner, who was until then little known in New York City society, instant clout and recognition. The paper, perpetually losing money, wielded an outsize influence among Manhattan elite, and several sources told Business Insider it was a way for Kushner to have a voice in New York.
The Observer has always been "a toy for rich people to sort of get their point of view about art and real estate and culture out there," Ken Kurson, the current editor of the Observer, said in a recent podcast with Recode.
"That's exactly what Jared wanted," he added.
Major launches, quick shutdowns
But since Kushner's purchase of the Observer in 2006, he has repeatedly tried — with mixed results — to turn this "toy" into the center of a mini media empire and a money-making business.
In January 2008, Kushner boasted to The Times about a multimillion-dollar investment to launch a network of 50 local news sites, modeled after the Observer's Politicker blog. The goal was to fill the political news void created by failing local papers, Kushner said.
The organization was to create "50 news bureaus with full-time reporters in each state," Robert Sommer, the Observer Media Group's president, told The Times.
The project failed miserably. Before the year was up, Kushner abruptly shut down 12 of the new state sites, claiming that he was going to focus on profitability. A month later he shut down three more, leaving just the remaining original Politicker sites.
At the same time, Kushner was looking to make a major splash in New York local media through acquisitions.
Months after launching Politicker's national blog, the Observer Media Group offered to buy Newsday for over $500 million from the Tribune Company, jockeying with media heavyweights including 21st Century Fox's Rupert Murdoch — a friend of the Kushners — and Mort Zuckerman.
The young developer originally planned to partner with Cablevision on the purchase, but various reports said that Kushner backed out of the deal or was cut out by the cable giant when it decided to purchase the Long Island news outlet alone.
In another instance, Kushner completed a deal but seemed to take little interest and offer little direction.
When the internet media conglomerate IAC put its Very Short List daily newsletter up for sale in 2009, Kushner was reportedly the only bidder, paying less than $1 million for the asset.
Kushner quickly laid off staff and eliminated sections he deemed unnecessary while attempting to develop ideas to monetize the newsletter with ads. Today, the Observer shares the newsletter — which mostly consists of several paragraphs about a single item review or recommendation — less than once a day at best.
Kurt Andersen, VSL's cofounder, said that though he was not involved with the sale, he had several meetings with Kushner in the first six months after Kushner took over.
"He was polite and not unintelligent, and that was that," Andersen said in an email.
'He's never not taken a call, no matter how big or small'
After a few years as an aspiring media mogul, Kushner took a crack at innovating in the magazine arena.
But even then, Kushner's motives and ambitions were unclear to many. Peter Davis, the former editor in chief of Scene magazine, whose tag was "affluence and influence," said the publication seemed to be more Ivanka Trump's idea than Kushner's.
"I think she told him to meet with me," Davis said. "Ivanka had his ear a lot. It was more her wheelhouse, more her world."
And during Scene's run, Davis said Kushner didn't give feedback on particular stories. He responded to "the look" of the magazine "more than anything," Davis said.
Scene was part of a slate of magazines Kushner launched around 2011, including the Chinese-language luxury magazine Yue and the parenting magazine Scooter. And Kushner even took a brief interest in purchasing The New Republic in 2012, before it sold to another young media owner, Facebook's Chris Hughes.
"Part of business strategy was to have these magazines that could bring in revenue and reach a different audience," said Peter Feld, the former editor in chief of Scooter magazine, which focused on raising children in Manhattan and existed from 2011 to 2014.
Scooter replaced Observer Playground, a parent-focused supplement whose editor had been involved in a 2010 scandal over promised coverage in return for an unpaid dental bill. When Feld met Kushner, the latter quipped about Playground: "Your teeth are OK," Kushner said, according to Feld.
Good teeth weren't enough to save Scooter, though. Feld said Scooter was making a profit, thanks in large part to real-estate advertising. But a new management team appointed by Kushner decided Scooter was putting a strain on the Observer's shared resources, such as its ad sales.
The mandate was to downsize and streamline. And by the end of 2014, Scooter, Scene, and Yue were all shut down.
Not all of the magazines the Observer Media Group promoted failed.
Justin Weniger and Ryan Doherty met Kushner a decade ago through mutual friends in New York. The three hit it off, sensing what Weniger described as an entrepreneurial kinship — the Las Vegas duo were self-starting club promoters who'd recently launched a monthly Vegas magazine dedicated to lifestyle and entertainment.
When Weniger and Doherty decided to bump their publication from monthly to weekly, they reached out to Kushner for advice. Instead, they got an investment and partnership with Observer Media Group in 2010.
Though Kushner maintains his investment, Weniger said Kushner and Observer Media are almost completely uninvolved, save for a semiannual earnings review.
"It really wasn't too financially driven or even resource-driven — it was really just something that started as a friendship, even when we were making the deal," Weniger said. "It wasn't like we started there and negotiated back and forth about the value of the company or the percentage. There was never a harsh negotiation. He approached everything like it was our business but something he wanted to be supportive of."
He added: "He's undoubtedly one of the smartest people I've ever been in a room with. He's never not taken a call, no matter how big or small, and at the same time he's never called once to be like, 'Where are we at with this?' He's never forced himself in our business, but he's always been there for us, for anything we've needed."
Loyal, polite, and calm
Kushner is described by those close to him as soft-spoken, loyal, and relatively media-shy — a polar opposite from the tabloid-friendly image his father-in-law embraced.
To those not in his inner circle, "he's almost like Teflon," Davis said. He's "kind of untouchable, much like politicians, who keep you on your toes" by not letting you know what's going on inside their heads.
Well-groomed and eternally polite, Kushner is the man standing calmly behind Trump's bombast, smoothing the edges.
In July, Trump was accused of anti-Semitism by a writer at the Observer itself after the Republican presidential nominee retweeted an image critical of Hillary Clinton that had a Jewish star.
Kushner responded to the writer he employed with his own op-ed defending his father-in-law. Raised in an Orthodox Jewish household, Kushner referenced his grandparents' history surviving the Holocaust and advised people to save the outrage for the real racists. Several cousins from an estranged branch of the Kushner family blasted him for invoking the family history to defend Trump.
As Trump prepares to take office, he is already presenting Kushner as one of his main liaisons with the business world.
And as the recent summit of tech executives at New York's Trump Tower showed, Kushner is willing to parachute into an industry where he doesn't have expertise and to speak with titans like Amazon CEO Jeff Bezos, Apple CEO Tim Cook, and Google cofounder Larry Page.
"Jared's big skill is how quickly he learns things," Kurson said in the Recode podcast. "That's really his greatest strength. It's one of the reasons he gets underestimated."
Identity crisis
Like Trump, Kushner prizes loyalty and family.
His latest strategy for the Observer is being spearheaded by two trusted allies: Meyer, Kushner's brother-in-law, who became chairman and CEO of Observer Media Group in 2013, and Kurson, who is a close personal friend of both Kushner and his father and became editor in chief that same year.
The goal under their tenure has been to turn the Observer into something broader than a New York paper. In November, the Observer discontinued its print edition, a move portrayed by management as a bid to become a national online publication and a reaction to the industrywide decline in print advertising. In a statement to Business Insider, Kurson said the Observer had grown its audience seven times over since Meyer took over in January 2013.
But some insiders say that changes at the Observer have led to an erosion of its underlying identity.
"It's lost all of its voice," Feld said. "Print or digital, it doesn't really matter. They have completely killed the Observer's DNA."
The Observer's main site increasingly features contributors, who provide a low-cost traffic boost but have saddled the Observer with a reputation in some circles for being a right-wing, partisan mouthpiece.
"There are still good reporters, and their work is being completely overshadowed by some of the absurd op-eds," a current Observer employee said.
Kurson described any political skewing in the contributor network as "total bullshit."
"We had Jon Reinish, respected Democratic strategist and great writer, lobbing cluster bombs at Trump on a regular basis," Kurson said.
"Our contributor Brent Budowsky was so pro-Hillary that he showed up in Podesta's hacked email," he added, referring to the WikiLeaks email hacks of former Clinton campaign chair John Podesta.
Kurson has another explanation for the criticism.
"The reason we get accused of carrying water is not just the family relationship of our publisher, but the fact that we took Trump seriously as a candidate from day one," he said.
He continued:
"Where some other publications were doing ridiculous, unjournalistic gimmicks like putting their coverage in the entertainment section or adding ludicrously biased disclaimers about his unfitness, the Observer believed from the beginning that despite our challenges of covering fairly a candidate to whom our publisher is related, that he would have real appeal and a real chance to win. We were right and others were wrong.
"I'm impressed that some in the journalism community, like Dean Baquet of The New York Times and Peter Kafka of Recode, reached out to me after the election to talk about what they'd missed. Others are content just to talk shit and keep their knit-capped, hipster-bearded heads buried in the Williamsburg sand."
Rumors of Kushner's meddling in the Observer's political coverage were categorically denied by staffers interviewed by Business Insider.
In fact, several former Observer employees told Business Insider that Kushner seemed almost exclusively interested in lists and real-estate coverage. Kushner took particular interest in the Commercial Observer, the real-estate trade publication he launched, and its "Power 100," which decides the most powerful people in real estate, more than anything else.
Some also suggested that Kushner's interest in the Observer was fleeting, while others said he focused the vast majority of his time on building his real-estate empire, with almost random interests in different media projects.
"You look at this, you look at that, he did this, he did that — keep in mind, add it all up and it's less than one of his new buildings in Manhattan or Brooklyn or Jersey City," a former top Observer figure told Business Insider.
Others with favorable opinions of Kushner acknowledge that while he changed the Observer, he was simply searching for a way to keep the historic institution afloat financially.
"He bought absolutely, positively, a dying publication in the Observer," the former top employee said. "It was a cultural icon, but it was also within hours of becoming a cultural relic. So when you change something, everyone gets upset, and Jared changed it because what it was couldn't possibly continue to exist financially."
But still, morale at the Observer is low and many are looking for the exits, current and former staffers said.
"I don't think [the low morale comes from] the cost-cutting," one current employee said. "I think it's the involvement with the Trump family and lack of editorial direction."
One source also told Business Insider that Kushner may be preparing to jettison the Observer altogether as his attention turns to Washington.
As one current Observer staffer said in response to a question about Kushner's role in potential pro-Trump editorial meddling at the news organization, "I really think he has bigger fish to fry at the moment, for better or worse."
No comments:
Post a Comment