Ozy Media, the embattled digital news site, has announced it is shutting down following a series of damaging allegations of using smoke-and-mirrors tactics to deceive investors and partners.
‘At Ozy, we have been blessed with a remarkable team of dedicated staff,’ the company’s board of directors said in a statement to the New York Times late on on Friday afternoon.
‘Many of them are world-class journalists and experienced professionals to whom we owe tremendous gratitude and who are wonderful colleagues. It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy’s doors,’ the company added.
Founded by former MSNBC host Carlos Watson in 2013, Ozy had raised a total of $70.3 million in venture capital funding since its inception, and the shutdown means that those investors will likely see their hopes of a return evaporate.
The company’s well-heeled investors include the Berlin-based media powerhouse Axel Springer and Laurene Powell Jobs’ Emerson Collective. One of Ozy’s earliest investors, Silicon Valley venture capitalist Ron Conway’s SV Angel, took the extraordinary step of surrendering its shares this week, forgoing all chance of a profit.
Ozy has faced a snowballing crisis after a Times story earlier this week said the company’s COO, Samir Rao, impersonated a YouTube executive on a call with Goldman Sachs while attempting to raise $40 million from the investment bank, a potential case of securities fraud.
The story also questioned Ozy’s claims of a large audience, not the first time the company has been accused of manipulating readership metrics.
Ozy Founder Carlos Watson speaks onstage during Ozy Fest 2018 at Rumsey Playfield in Central Park on July 21, 2018. The company is now shutting down
Ozy has faced a snowballing crisis after a Times story earlier this week said the company’s COO, Samir Rao (above), impersonated a YouTube executive on a call with investors
How Ozy Media imploded in a week:
- On Sunday, the New York Times revealed that Ozy co-founder Samir Rao allegedly impersonated a YouTube exec to impress potential investors
- On Wednesday, a Forbes article revealed how Ozy operated a toxic and abusive culture of overworking young and inexperienced employees
- The article also detailed how Ozy profited off the insurance money of a cancelled music festival in 2019 likened to the Fyre Fest fiasco
- Wednesday also saw Ozy investor Ron Conway, a Silicon Valley venture capitalist, surrender all his shares of the company
- On Thursday, Ozy Chairman Marc Lasry stepped down, saying the company was in need of crisis management leadership
- That same day, former BBC anchor Katty Kay, one of Ozy’s biggest names also resigned after learning of Rao’s alleged behavior
- CNN later released a report detailing how Ozy CEO Carlos Watson acted as a ‘bully’ who never took no for an answer
- On Thursday, the NY Times found that television producer Brad Bessey had quit Ozy in August when he found out the show he was producing had no cable deal
- Sharon Osbourne also spoke up on Thursday, revealing that Watson’s claim that the Osbournes invested in the company was a lie
On Thusday, Marc Lasry, the hedge-fund billionaire and Milwaukee Bucks co-owner who was named Ozy’s chairman earlier this month, resigned from its board.
‘I believe that going forward Ozy requires experience in areas like crisis management and investigations, where I do not have particular expertise,’ Lasry said in a statement.
‘For that reason, I have stepped down from the company´s board. I remain an investor in the company and wish it the best going forward.’
Sharon Osbourne slammed Ozy founder Watson in an interview on Thursday night.
Watson had previously boasted that he was friends with the Osbournes after the two parties settled a lawsuit over the company’s Ozy Fest and its similarity to the Osbournes’ Ozzfest music festival.
Watson claimed in 2019 that they were on such good terms that the Osbournes even became investors in the fledgling media company, saying: ‘They’re part of the family.’
‘We’re not ever, ever a friend, and we don’t have any interest in his company,’ Sharon told CNBC. ‘He’s insane.’
‘This guy is the biggest shyster I have ever seen in my life.’
Sharon Osbourne called Ozy Media co-founder Carlos Watson a ‘shyster’ and claimed he tried to strong-arm her family into ending their lawsuit over trademark infringement
On Thusday, Marc Lasry, the hedge-fund billionaire and Milwaukee Bucks co-owner who was named Ozy’s chairman earlier this month, resigned from its board
She alleged that Watson had offered her shares of Ozy Media during their legal battle, but she declined after Watson supposedly tried to strong arm the Osbournes with claims of the company’s wealth from billionaire investors.
‘To be honest, he did say, “Well we’ll give you shares in the company,” but I said, ‘Your company is worth nothing.'”
Ozy Media’s known investors are Laurene Powell Jobs, wife of the late Apple founder Steven Jobs, venture capitalist Ron Conway and former Google exec David Drummond.
Berlin publishing giant Axel Springer, investment bank LionTree and the radio and podcast company iHeart Media also invested in the company.
The crisis for Ozy has unfolded with breakneck speed following the shocking revelation of Rao’s impersonation of a YouTube executive to deceive investors, a potential federal crime that may be under FBI investigation.
Laurene Powell Jobs, wife of the late Apple founder Steven Jobs, was an Ozy investor through her Emerson Collective
Rao had allegedly set up a videoconference call with Goldman Sachs on February 2 that included an appearance by Alex Piper, YouTube’s head of unscripted programming, to vouch for Ozy’s audience numbers on the platform.
But when it came time for Piper to talk, Goldman Sachs officials received a notice that the YouTube exec was running late and having trouble logging into Zoom.
The videoconference then switched over to an old-fashioned telephone call where Rao allegedly began impersonating Piper.
During the call, Rao – as Piper – boasted that Ozy had a huge subscriber base, garnered significant ad dollars and was run by an incredible leader, all to win favor with Goldman Sachs.
But Goldman Sachs officials grew suspicious, noting the call was unnatural, almost sounding ‘digitally altered,’ the Times reported.
After the call, a Goldman Sachs official emailed a confused Piper, who said that he was never on the call.
Meanwhile, allegations have surfaced accusing Ozy of a toxic work environment, a bullying boss, and smoke-and-mirror business tactics that almost ended in a Fyre Festival-style disaster.
Developing story, more to follow.