An Interview With Jared Kushner

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L.G.: Now some of your long-standing tenants are paying way under market price, aren't they? 
 
J.K.: Well, the market runs probably $120 a foot. Annually. Ridiculous. An upper floor is probably about $150, a lower floor is as low as in the $90s, so it ranges.
 
L.G.: You've had Brooks Brothers in here for a long time.
 
J.K.: Yeah, they were paying substantially below market.
 
L.G.: Are you having to renegotiate those deals?
 
J.K.: No, you have a lease, you have to respect the lease. But, for example, at Brooks Brothers, we were able to make a deal with them that was beneficial. This is something that's been reported, where they're going to be leaving in February, and we've already rented half the space to the tenant [the Abercrombie & Fitch children's store] at market price. Citibank is still one of the largest tenants in the building. But it's a great building, it's a lot of fun.
 
L.G.: Obviously it got its address, 666, before all the craziness surrounding "the mark of the beast" from the Book of Revelation.
 
J.K.: Well I think "the mark of the beast" has probably existed before the building. The way that I look at it is, six plus six plus six is 18, which in the Jewish religion is a lucky number. It's "chai," it's "life." Like with everything in life, you can see it one way, or you could see it another way.

[Back in Kushner's office.]

So I would've had you at the Observer office, but this is where I'm working out of today. But the difference is pretty stark there—it's a much different décor.

L.G.: How often are you down there [at the Observer office in the Flatiron neighborhood] versus up here?
 
J.K.: What I've done is I've bifurcated my week, so I spend three days a week, generally Sunday, Monday, and Friday, down at the paper, then I'll be here in the real estate office Tuesday, Wednesday, Thursday. Now when I'm down there, I work on my internet ventures and all that stuff as well, and when I'm in one place, I'm always working on projects from the other. I take Saturdays off. And occasionally I'll take a Sunday off too, or I'll work at home or whatever it is. But on Sundays I try to get to the office.

L.G.: You're coming up on two years of owning the Observer.
 
J.K.: Yeah, it's pretty scary.
 
L.G.: And you're 27, right?
 
J.K.: Yes.
 
L.G.: So what possessed you to go buy a dinosaur? This is, like, so old-media. Isn't it a bit yesterday?

J.K.: Well, I would say two things. People are hysterical about the death of newspapers and I would say they're not dying, they're just kind of reinventing themselves. What the ultimate body count is in reinvention is still to be determined, but the difference between a weekly and a daily is that my product is a country home, whereas a daily is your primary residence. You need a primary residence so people may choose one primary residence over the other, and internet and the newsprint to some degree are interchangeable for certain people. You're only going to buy a country house if you know you're going to use it. You're only going to buy a country house if you want to go to it. You are only going to subscribe to the New York Observer if you're going to make time to read it and if it adds something to your life that's kind of special. The way I look at it is, there's obviously a lot competing for readers' attention these days, but the goal of the Observer is to be something very unique. It's a hyper-unique product. I'd like to think that our editorial mission is to give our readers every week one or two things that they just can't get anywhere else that would make them smile, or a little bit smarter. We have the smartest readership probably in the world of any publication.

L.G.: I'm sure you have studies to back up that assertion.
 
J.K.: That they're the smartest in the world?
 
L.G.: Yeah, you have their I.Q.'s?
 
J.K.: Well, they're very discerning. I think the readership is made up of a lot of the media elite, thought leaders, the people in politics, people who run banks. It's more anecdotal that they're the smartest readers in the world, but to some degree, you can really say that we've got a hyper-self-selecting group of people who really run things, who pay attention to this publication.

L.G.: Let's go back, and tell me why you wanted it. Why did you decide to get into the journalism business? You have no history. You wrote one review of something when you were in college. What was it?
 

J.K.: Food. I did an article on how to survive on food when you're in college based on, how do you mix things together in the cafeteria and from different places, how to cook in your dorm room. It was kind of a bad idea with a lot of follow-through, and I didn't have a strong interest in journalism or anything like that.
 
L.G.: So you went from zero to 500 miles per hour. What possessed you to do that?

J.K.: I was very attracted to the Observer, I heard the paper was for sale and I was very attracted to the brand. I thought it was an incredible brand, I knew that it was read by an incredibly strong demographic. The more I investigated a), what it would cost and b) how it was run, I thought there were tremendous opportunities to improve the operations from an efficiency point of view. I felt like it was an under-invested-in company and I thought that the brand could be incredibly valuable. So I've spent the last two years kind of doing this in different stages. The first stage was really revamping the product and the systems. So before you kind of paint the car and make it pretty, you want to make sure that everything's working under the hood. So we've rebuilt the engine, reoriented the newsroom, rebuilt the news site, reoriented the sales staff. We changed a lot of the upper management, we brought in an events team. We did a lot of things that we had to do to compete in the marketplace today. I spent a lot of time in the beginning with Peter [Kaplan, the editor in chief], trying to figure out what the product should be-because my general instinct on it is that it's easier to build a business off a great product than it is to build a business off something that isn't. So we invested a lot in the product, redesigned it, we tried to make a modern-day paper.

L.G.: You paid $10 million for it? That's what has been reported.
 
J.K.: Yeah, but I've never confirmed anything.
 
L.G.: Oh, you haven't. But then you put in millions more?
 
J.K.: Absolutely. We've invested a lot in the paper. But, for example, in the first quarter of this year, our revenues were up 61 percent over the last year, which, given the general climate for newspapers, we were very happy with that.

L.G.: Where does that come from—is that internet? Is that display advertising?
 
J.K.: Display advertising, classified is down a little bit, internet is up pretty big, our events revenues are up, magazines and the circulars that we're doing are up. We published a Luxury Living magazine which was probably the biggest magazine the Observer has ever done, which was in conjunction with the event we did. [Kushner brandishes a copy with a beautiful model on the cover.] 
 
L.G.: How long have you been dating her?
 
J.K.: [Laughs] Well, no such luck there. But I really had the opportunity to meet with a lot of different people who were willing to give me advice as to what they're doing. And I think not a lot of people see the Observer as competition because it's such a unique product, so I was able to really pick the brains of a lot of really smart people in this industry and get a sense for what they were doing. And so we built the organization that way, we've added a lot of expense so that we could be kind of a new-age organization. But at the end of the day, it's really starting to pay off. Our advertisers are saying to us a) Why has no one ever called us before?, and b) It was never explained to us what a great efficiency buy this could be for our clients. So the value proposition tends to be great in the sense that they get to reach the power elite, and it's less expensive than taking an ad in the New York Times. There's very little waste in the money that they spend in our publication.

L.G.: So looking at this magazine, Luxury Living: New York Condo Showcase, when did it come out?
 
J.K.: That was put out in conjunction with an event we did earlier this year. It was an insert in the newspaper, and it got tremendous feedback. We took the Puck Building [which the Kushners own] for a day on Sunday and we got 40 developers to pay for booths and we got about 2,300 consumers and brokers to come through. I think this year we're going to publish about five special-insert magazines, and hopefully next year I'll take it up to six, eight.

L.G.: Had the Observer been doing that kind of thing before you arrived?
 
J.K.: They had been, but it's kind of a microcosm for the whole business in the sense that they just weren't investing in the magazines. So they were on poor stock, the content wasn't that good. We went out, we hired first-rate freelancers, we made first-rate magazines, we put them on better paper stock and we went out and trained the sales staff how to sell them properly. And the first time we did that, we literally tripled the revenue from the year before, just on that one magazine. So we've been able to grow that business, and I see that as kind of the microcosm for the rest of the paper, where we've invested in the product. I think more people are reading it—readership is up.

L.G.: Where have you put the money—into hiring more staff? God forbid paying those young people more!

J.K.: We've increased our newsroom staff by about 20 percent. We hired a design director, which was a position that they'd previously cut out; we had a photo editor, we spent a lot more money on art, on photography, trying to make the paper look good. The real philosophy is that the way people read today, you want to make this a fun, smart read, but it's got to be able to feel fun.
 
L.G.: Did you know immediately that you wanted to go from broadsheet to tabloid?

J.K.: No. I try to be always completely open-minded. One of my favorite things that I've ever read when I was in college was John Stuart Mill. And I remember reading his "marketplace of ideas," the notion that there's no such thing as a bad idea because it'll either help you find the new truth or reinforce the existing truth. And so we looked at a million different things—where the paper is now is a far departure from what the first mock-ups were. It's a far departure, but it's an evolving thing. You have to be open-minded, you have to be willing to make mistakes, take risks, and ultimately you'll come out with something that works. The good thing about our organization, too, is we're very nimble in the sense that we're not bureaucratic, and if there's a change that we want to make, we'll just go ahead and make it.

L.G.: How large is the staff of the Observer now?
 
J.K.: We have over 100 employees, about half-and-half business and editorial...The cost of paper is up, but at the end of the day, it's still not the biggest variable. I mean, we don't print a million copies like some of the dailies have to. We print once a week and our print run is our circulation plus 20,000 or so. I have to check what the last numbers were, but our circulation is close to 50,000 on the paid, but in terms of what we distribute, it's close to 60,000, so you have all the different comps and targeted circulation. We sell about 10 percent on the newsstand, and recently raised our price.

L.G.: I'll say! I paid $2 for my copy. That's pretty aggressive!

J.K.: Thank you very much.
 
L.G.: I'm helping to defray your losses.
 
J.K.: Well, the truth is, it's a premium product. You get just as much out of there, if not more, than you would from, say, a New York magazine, and some of its competitors, which are closer to the $4 price tag. Just because it's on newspaper print doesn't mean you're getting anything less. So I would argue that at $2 it's still a great buy, and we didn't raise the price for subscribers, we just raised newsstand prices.

L.G.: Is there any kind of newspaper owner or media mogul that you can model yourself after a little bit?
 
J.K.: I wouldn't like to model myself. I'd like to take a lot of role models in a lot of different places. I'd like to hopefully take the best of what I see in great people and try to emulate those things. I think that in some ways, you want to be creative but in some ways, you don't want to be too creative. If there's something that you see someone else doing that works, you know, they say imitation is the greatest form of flattery. A lot of people have things that they do well and things that they do less well, and I think the goal in life is to try and increase to your arsenal as many things you do well and try to limit the amount of things that are in your arsenal that you do less well.
 
L.G.: There's an anecdote about you sitting with an unnamed New York media owner and having a long conversation with him and just being shocked at how disdainful this person was of the staff, and just the people who work for him in this particular news operation. And my question to you—is this anyone I know?
 
J.K.: I guess so. I didn't give the report of that story.
 
L.G.: Peter Kaplan did.
 
J.K.: Part of getting into the business with no experience, I was literally airdropped behind enemy lines with no guidance or support system, you know, and having Peter as my editor and really partner in this is that he's been able to, at least on a journalistic side, teach me what's appropriate for a publisher to do. Teach me, like what he does with all of our reporters, why what we do is important and how to get a great appreciation for journalism, and its very best way.
 
L.G.: Well, having worked for so many years for the Washington Post, there's the Graham family model of ownership. Surely the top editors would hear from the Grahams if they didn't like something, but it was always clear whose job it was to oversee content. I was joking with you earlier about the fact that, you obviously would have been included on anybody's short list of the most powerful people in New York real estate, but were not, in your newspaper, because—

J.K.: Definitely my mother's.
 
L.G.: Was there a sense that you have to be a bit above the fray, as an owner, in terms of content? Because I can tell you, from personal experience, that some newspaper owners don't take that attitude.
 
J.K.: No, it's very, very true. I think that, as far as the product's concerned, I really believe that the product has to have credibility. Our readers are very smart, they know very quickly how to smell a fraud. One thing about Peter is that he's got incredibly high ethical standards for what is journalistically acceptable and what's journalistically not acceptable, and I trust him to use his judgment.
 
L.G.: Can the Observer cover the Kushner company?
 
J.K.: It has.
 
L.G.: And have you ever been irritated by the way they've covered it?
 
J.K.: Um, well, if there's something that I think they did wrong, I kind of take the approach that everyone else should—which is, I encourage people who feel wronged by it to send a letter to the editor. It just so happens I can speak to him, so if there's something that we did wrong, that was covered incorrectly, but for the most part, it hasn't been an issue in any real way.

L.G.: Now when people come to you, as I'm sure they do, and they just read something snarky about themselves in the Observer, and you have a business or social relationship with them, and they say "Jesus Christ, Jared, look at what your paper did to me"—what  do you do in those situations?

J.K.: Well, I think people for the most part are very respectful and they know that I'm a publisher who has strong belief in editorial independence. And I'm very fortunate to surround myself with great people, and I believe that you hire good chefs and you let them shop for the groceries and cook.
 
L.G.: So do you let these people know, "Well, look, that's not my department"?
 
J.K.: If there's something that's a factual mistake—and my family's been in the limelight of the press, and I've seen tons of press accounts that were just factually inaccurate in my time—so we're hypersensitive to making mistakes, and that's something that's not acceptable. The only thing that I care about is that a journalist be fair, that they gave a chance for comment, that they're diligent in their research, and as long as they do the right thing journalistically, then that's what the Observer is. That's what it's about, and that's what I've signed up for.

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