Ozy Media CEO Carlos Watson appeared to be in tears as he addressed staffers in a company-wide meeting on Monday, one day after a devastating New York Times exposé that led to the abrupt shuttering of his 9-year-old digital media company just four days later.
He vowed, one attendee said, that he was going “to fix this.” But people on the call said Watson’s crying appeared “fake” and “theatrical,” an individual with knowledge of the meeting told TheWrap.
Fixing this was impossible. Instead, the clamor and turmoil just grew day by day and when the CEO appeared on Zoom before his staff on Friday, the mood was much quieter. “Carlos was upset,” one person who was present at the meeting told TheWrap. “He seemed beaten down by all of it. He seemed distracted.”
The Zoom call lasted only about five minutes. Watson’s tone was business-like as he told his staff that the company was shutting down, another staffer said. Employees lost access to email and Slack immediately; some got their final paychecks on Thursday.
“I know this isn’t anything that any of us wanted,” Watson said, according to those present. “I’m very sorry to say that the board has voted, given everything that’s happened, to suspend operations and to close Ozy as of today.”
It was a stunningly sudden end to a media company that, as Watson told TheWrap on Monday, had made $50 million in revenue in 2020 and turned a profit. A company that he claimed had been offered $250 million to be acquired by BuzzFeed in 2019.
In a defiant interview with TheWrap shortly after the publication of the exposé, Watson said he was the target of a “a bulls— ad hominem attack” in the New York Times because “Ozy’s rising.”
The collapse of Ozy reflects the velocity of information in the digital age, and how devastating the consequences can be. The initial Times report led to an avalanche of negative reports that rained down on Ozy all week, confirming what many had suspected but never said aloud: that the entire company was built on Carlos Watson’s charisma — and relentless spin — with little concrete success to back it up.
It was only Sunday evening when Times media columnist Ben Smith published an exposé that accused the company of inflating its online traffic and video viewership and revealed that COO Samir Rao had impersonated a Google executive on a fundraising call with Goldman Sachs — sparking a potential FBI investigation.
The following day Watson called an “all hands” Zoom meeting a day to give his side of the story to his skeptical staff. “He said he was going to fix this,” former Ozy editor at large Eugene Robinson told TheWrap.
But another staffer said that few people believed Watson, calling for someone to step in and save the company. Regarding Watson, this staffer said: “It’s all spin.”
Things began to unravel quickly from there. After Smith’s initial report in the Times, Ozy faced accusations that Watson falsely claimed Sharon and Ozzy Osbourne were investors and had produced a Watson-hosted TV talk show while falsely claiming to guests and corporate partners that it would air on A&E. The company then claimed that “The Carlos Watson Show” was Amazon Prime’s first talk show; later, that it had been “sold” to YouTube Originals.
Reps for A&E, Amazon and YouTube have all refuted those claims.
On Tuesday, the Ozy board — led by venture capitalist Marc Lasry — placed Rao on a leave of absence pending an independent investigation into his conduct and the company’s business activities. “We will continue to review the company’s leadership in the coming months,” the board said in an unsigned statement.
It was a rare retreat after the board’s apparent inaction on Rao, whom Watson claimed that Rao had had a mental breakdown in the moment that he impersonated a Google executive during a fundraising call with Goldman Sachs, trying to vouch for Ozy’s YouTube audience numbers as the company sought to close a $40 million fundraising round.
On Wednesday, former BBC anchor Katty Kay resigned as an executive producer and senior editor citing the Times’ “serious and deeply troubling” report, while Silicon Valley venture capitalist Ron Conway surrendered all his shares in the company, an extraordinary gesture of no-confidence.
On Thursday, Lasry resigned from the board just weeks after he was named chairman, saying he was ill-equipped to deal with the crisis. Investor and longtime Watson friend Laurene Powell Jobs let it be known she was barely involved anymore, and Axel Springer — another top investor — said it had already stepped off the board a while ago. A representative for the publishing giant told TheWrap: “We have nothing to add.”
By Friday, it seemed all over but the shouting. In the morning, Watson resigned from the board of National Public Radio.
By then. there were very few left in Ozy leadership and no one had heard from Watson in days. The board chairman was gone. The COO on leave.
Ozy Media To Shut Down
Throughout the week, Ozy insiders said they were instructed to fill out time sheets without clarity on whether they still had jobs. One contractor, who has not worked since the Times report came out on Sunday, told TheWrap on Friday, “Everything is up in the air.”
By Friday afternoon, the board announced that it was “closing Ozy’s doors,” noting: “At Ozy, we have been blessed with a remarkable team of dedicated staff,” the board said in a statement. “Many of them are world-class journalists and experienced professionals to whom we owe tremendous gratitude, and who are wonderful colleagues.”
Some told TheWrap they were both stunned by the news and relieved to have some clarity. “It was a complete shock to me,” one said. “We were all pretty blindsided.”
Robinson, a 9-year veteran of Ozy who was fired in June for refusing to shut down his Substack that he said he got approval for months before launching it, added: “You got to realize that people are just not going to believe” Watson’s assurances.
Insiders said some of their colleagues had already resigned, or changed their LinkedIn profiles as they began looking for new employment.
Robinson said he had long had suspicions about the company’s rosy portrayal of its audience metrics. When he questioned some of the numbers Ozy was peddling to outsiders — such as its claims of 50 million unique monthly users — Robinson recalled that Watson would brush off the optimistic figures as “placeholders,” and that this practice happens all the time in Silicon Valley.
“It’s amusing to me that (Watson is) accusing other people of lying,” Robinson said on Thursday. “It’s pretty clear he and Samir need to go.”
By Friday they were gone, along with the rest of Ozy Media.