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Ozy Makes Announcement With 'Heaviest of Hearts'

Digital media company is shutting down after week of bombshell reports, controversies
By Jenn Gidman,  Newser Staff
Posted Oct 1, 2021 9:06 AM CDT
Updated Oct 2, 2021 6:00 AM CDT
For Ozy Media and Its Execs, the Controversies Swirl
Ozy CEO Carlos Watson is seen during the PBS Television Critics Association summer press tour on July 29, 2016, in Beverly Hills, Calif.   (Photo by Richard Shotwell/Invision/AP)

(Newser) Update: A "strange chapter" in the media world has come to a close. That's per the New York Times, which reports that Ozy Media, the digital media firm it had dropped a bombshell report on earlier in the week, is shuttering. "It is ... with the heaviest of hearts that we must announce today that we are closing Ozy's doors," the company's board of directors said in a Friday statement, praising its "dedicated staff" of "world-class journalists." Apparently, investors and advertisers had started to flee after this week's developments, and CEO Carlos Watson determined the company couldn't bounce back. Meanwhile, the Times reports that Watson has stepped down from his position on the board of public radio group NPR. Our original story from Friday follows:

On Sunday, the New York Times published a bombshell report by reporter Ben Smith, claiming that a top exec at digital media company Ozy Media had impersonated a YouTube employee while on a call with possible investors. By the end of the week, one of Ozy's biggest stars had left the company, and the chairman of the firm's board had also resigned, per the Hill. Now, a Thursday report by Smith details new allegations by a former Ozy producer who says the company created a TV program based on "a false claim." More on this evolving story:

story continues below

  • The faked call: Smith's original expose details a meeting set up on Feb. 2 by Ozy between the asset management division of Goldman Sachs (which was considering investing $40 million in Ozy) and YouTube. Meant to be representing YouTube was Alex Piper, the unscripted programming chief of YouTube Originals. The players were supposed to meet via a Zoom video call, but Piper said he was having trouble with Zoom and suggested a regular conference call. That's when things got weird.
  • Not Piper: In the call, the man representing YouTube, ostensibly Piper, talked up Ozy and CEO Carlos Watson. But sources say as he spoke, "the man's voice began to sound strange to the Goldman Sachs team, as though it might have been digitally altered," per the Times. A probe revealed it wasn't Piper after all, but Ozy co-founder and COO Samir Rao.
  • What happened: Watson told both Smith and Goldman Sachs that Rao had been suffering from a mental health crisis, and that he'd taken a break from work after the call. Ozy has since suspended Rao, per Ad Age. "Following reports of conduct that is not in keeping with our standards or values," Ozy has retained a law firm "to conduct a review of the company's business activities," Ozy says in a statement.
  • Further fallout: On Wednesday, one of Ozy's biggest stars, ex-BBC journalist Katty Kay, announced she'd left the company. Meanwhile, Marc Lasry, the chair of Ozy Media's board, resigned on Thursday, telling Axios in a statement that "I believe that going forward Ozy requires experience in areas like crisis management and investigations, where I do not have particular expertise."
  • The TV show: Brad Bessey tells Ben Smith in a new Times piece that in June 2020, he began as an executive producer on The Carlos Watson Show, an Ozy interview program hosted by the CEO. Bessey says he was told by both Watson and Rao that the show was set to appear on cable channel A&E in prime time, with an August 2020 debut. Then came all the "red flags." An A&E spokesperson confirms to the Times that the network nixed the show before taping even started. Bessey resigned in early August upon learning this. "You are playing a dangerous game with the truth," Bessey wrote in his farewell email to Watson and Rao.
  • Word from Watson: On Monday, the CEO called the initial Times probe a "ridiculous hitjob" and said he's "heartbroken." "But we are strong and undeterred," he tweeted, along with a lengthy statement and responses to questions posed by Smith.
  • Ozy vs. Ozzy: Two unexpected players in this brouhaha: Ozzy and Sharon Osbourne, who filed a trademark lawsuit against Ozy Media in 2017 over the latter's Ozy Fest music event, whose name the Osbournes complained was too similar to their heavy-metal-themed Ozzfest. Sharon Osbourne tells CNBC that Watson tried to intimidate her while the suit was ongoing, and that once it was settled, he went on the network and lied about the Osbournes investing in his company (CNBC confirms Watson made that claim and posts video of it). "This guy is the biggest shyster I have ever seen in my life," Sharon Osbourne tells the outlet of Watson.
(Read more Ozy Media stories.)

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