Peter bridles a bit at the 21st-century linkage, however. He’s publishing more and more on the Web—he understands it’s the future—but that doesn’t mean he’s platform-agnostic. “Metaphysically, a newspaper is something you hold in your hand and doesn’t vanish—I hate to get too marijuana-like about it, but print is not the Cheshire cat. The power of physical publication is immense.”
The Observer is defined by its subject—“the power elite,” says the editor—and its smart, knowing, wry, sometimes snotty cosmopolite’s take. Yet for its first several years, it was just about the opposite—dorky, earnest, clueless, entirely unhip, a thing today’s Observer would sneer at. And something which Spy, back then, did. Such perfect irony, therefore, that it was a tag team of my fellow Spy editors—Graydon Carter for a year, then Susan Morrison for two years—who decamped to run the Observer and invent its smart-set sensibility.
I buy the paper without fail, and not only because it covers the worlds I inhabit as minutely as a trade publication. Sure, its relentless hothouse humidity and high-school-with-money smugness can be enervating—just like New York itself. But the paper manages always to have a handful of quirky, excellent writers and reporters.
So many paradoxes: annoying but irresistible, old-fashioned but newfangled, cheap but posh—and Establishment but anti-Establishment, “the insider’s underground newspaper,” as the paper once billed itself. Another paradox is the asymmetry between its size and its visibility: The Observer has a disproportionate importance because its subjects and wannabe subjects are its readers, all of whom have a disproportionate sense of their own importance.
Thus the apparent eagerness of certain plutocrats to publish a paper that ranks in circulation somewhere between the alternative weeklies of Milwaukee and Boise, and loses more than $2 million a year. Fine! Choosing not to maximize profits in order to enliven the culture, another un-American paradox, is grand—partly vanity, of course, but so is straight philanthropy.
Arthur Carter, who donated $11 million to NYU in the 2004–5 school year, is pretty paradoxical himself. Peter finds his eccentricities sweet; his two previous editors, not so much. Carter is, on the one hand, very fancy: He has a degree in French literature from Brown, and once in a conversation with me about business he quoted Pierre Bourdieu to the effect that status, not money, was life’s animating force. But his accent and vocabulary remind me of my plumber in Brooklyn. “I hope it has a simplistic elegance to it,” he once told me about the minimalist steel sculptures he makes and shows.
And while he has poured many, many millions into the Observer with almost no hope of recouping, he’s also published it on the cheap. There are strict limits to his quasi-charitable irrationality. Even today, he’s still spending—last week I got a piece of Observer junk mail—but he also just shrank the paper to one measly section.
They do an amazing job given the tiny staff (25 or so), but the perpetually tight budgets and Carter’s own geographic and demographic parochialism have probably made the Observer an underachiever, editorially and maybe even financially. “None of my friends read the paper,” says one of its young reporters, “except media people and Upper East Siders.” Only in the last few months, for instance, has bobo Brooklyn become a regular beat, about a decade late.
If the new owners are willing to underwrite somewhat bigger losses in the near term, the editor would undertake “more Wall Street coverage. We’ve never really covered theater or Seventh Avenue. And obviously Hollywood.” Any new owner should bring Observer .com up to snuff. Of the six blogs, only a few have fresh posts every day.
But can the paper ever be a real business? It makes around $1.5 million a year in subscription revenue, and more than that from advertising. What’s required, Peter thinks, is a more serious ad-sales operation, as well as, yes, more Web-dedicated journalists. “We are a brand name for a kind of high-end New York. We ought to be raking it in.”
True-believing wishfulness, maybe. But while the Observer is small, its demographics are impressive—similar to the Times’s, but younger, more highly educated, and more affluent. When I told Peter I’d heard a rumor that the Times might be a buyer, I knocked the wind out of him. “Maybe the two Arthurs”—Carter and Arthur Sulzberger Jr.—“have talked.” He paused. “That would be the end of everything. So much of why the Observer is here is to tell New Yorkers that the benign dominance of the Times is a sort of tyranny. It’s as important to us as covering the State Department is to them.”
So here’s hoping that De Niro and his savvy, cool friends make the deal, and devise the commercial means not only to keep the paper going but to nudge it from good to great. I asked Peter if the budget pinch is the only thing that’s ever made him think seriously about leaving.