War for the Observer: Management Battles With Legacy

When Jared Kushner bought The New York Observer in 2006 from its benefactor and owner, Arthur Carter, New York City’s salmon-colored staple had been losing about $2 million dollars a year.

But the paper, which had always been financially troubled, had incalculable cachet. For the cultural and media elite it chronicled, it was a must-read, and a significant voice in local politics and real estate. Created in its storied form by Graydon Carter, who would go on to edit Vanity Fair, briefly edited by Susan Morrison, now of The New Yorker, and then guided by longtime editor Peter Kaplan, the paper’s relatively small circulation of 50,000 understated its influence.

Kushner, a then-25-year-old real estate heir, paid nearly $10 million for this cachet. He saw the Observer not only as a way to improve his standing—as one of the paper’s former reporters has written, “owning the Observer opened doors real estate never could”—but also to prove himself. By running the Observer like a business—marketing the brand, building a Web presence, and providing more editorial resources—he would add profitability to the brand’s coolness and clout. In so doing, he would demonstrate his own value and maturity.

This uncertain business proposition meant Kushner would have to turn the small-circulation periodical into an advertising miracle. To this end, in March 2009, Kushner hired Christopher Barnes, the co-founder and former publisher of AM New York, as president of the Observer. Since arriving, Barnes has been on an aggressive campaign to increase ad revenue and cut costs and to dominate the editorial culture of the paper.

But according to Adweek’s extensive interviews with many of the Observer’s former business and editorial employees, Barnes’ campaign—and Kushner’s apparent faith in Barnes—is destroying much of what gives the paper value.

Through a representative, both Kushner and Barnes declined to be interviewed for this article.

The Observer now is a very different place than it was when Kushner bought it. The once tony publication, which reflected Kaplan’s strong editorial voice and nostalgia for the city’s journalistic traditions, is now driven by Barnes, a local retail ad-space salesman.

“You’ve got a paper, or a brand, that is selling itself on being a premium brand, and they hired a guy whose entire background is in local, classified sales,” one source said in disbelief. “There could not, in my mind, be more of a disconnect.”

Two weeks ago, former Gawker editor Elizabeth Spiers became the Observer’s fourth editor in half as many years. Her appointment signals Kushner’s still-strong desire to enhance the Observer’s voice and build its Web site, which is regarded as behind the times. (One of the paper’s former columnists recently explained that he left the Observer last year because he “didn’t want to get left behind” on the Web.) Spiers will report to Barnes—”She’s going to run screaming in a couple of months,” one former employee said.

Meanwhile, Kushner, who is less and less of a presence in the Observer offices, seems to have higher ambition as a proprietor than mere prestige. In that, he’s been closely counseled by—and become friends with—News Corp. mogul Rupert Murdoch, whose two young daughters were flower girls at Kushner’s wedding to Donald Trump’s daughter Ivanka. Advised by Murdoch to get himself a strong manager, Kushner found Barnes, who he sees, according to multiple sources, as his salvation, if not “as a god.”

Within the paper itself, however, Barnes is, practically speaking, the anti-Christ.

“I’ve never seen someone so universally reviled,” one source said. (Without being prompted, many sources identified only three people at the Observer who might not hate Barnes.) Asked why Barnes is so disliked, the source gave three reasons that were echoed by all those who spoke with Adweek: One, he views editorial content “as a support function” for advertising; two, he thinks “it shouldn’t take time or money to put [the paper] together”; and three, he believes “that every single person is replaceable.”