Ozy Media will not shut down, embattled CEO Carlos Watson revealed on Monday - just days after the company told staff it was closing its d...
Ozy Media will not shut down, embattled CEO Carlos Watson revealed on Monday - just days after the company told staff it was closing its doors as a tsunami of scandalous lies emerged.
'We are going to open for business, so we are making news today,' Watson told NBC's TODAY Show on Monday.
'This is our Lazarus moment, if you will,' he said. 'This is our Tylenol moment.'
The about-turn comes after Ozy Media told its staff on Friday it was closing its doors less than a week after it imploded as a litany of lies were revealed - among them was its claims that it had millions of viewers and readers, and that COO Samir Rao had impersonated a YouTube executive on an investors' call with Goldman Sachs in February, a potential case of securities fraud.
On Monday, Watson said that despite the incident the Wall St giant still entered into an 'advertising partnership' with Ozy Media. DailyMail.com has reached out to Goldman Sachs seeking comment.
Watson said he decided to reopen for business after talking to Ozy Media consumers and investors who agreed that the company's newsletters, podcasts, and TV shows have 'a place' and 'is part of this moment.'
When asked to identify who was financing the company's relaunch, Watson refused.
The troubled digital darling founded by Watson - a former MSNBC host - in 2013 had raised a total of $70.3 million in venture capital funding since its inception. It's not clear if its initial investors, inlcuding Laurene Powell Jobs, will likely see their hopes of a return or if they are still backing the company.
Ozy Media CEO Carlos Watson said on Monday that his company would be 'open for business'
How Ozy Media imploded in a week:
- On September 26, the New York Times revealed that Ozy co-founder Samir Rao allegedly impersonated a YouTube exec to impress potential investors
- Days later, 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
- On the day the Forbes article was published, Ozy investor Ron Conway, a Silicon Valley venture capitalist, surrendered all his shares of the company
- The next day, 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
- The New York Times also reported 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, revealing that Watson's claim that the Osbournes invested in the company was a lie
- Shortly after 5pm on October 1, Ozy's board said the company was shutting down
- Watson appeared on NBC's TODAY Show and revealed that the company would be 'open for business' though he declined to say who was funding the firm
Last week, it also emerged that Watson claimed Sharon Osbourne had invested in the company after she and legendary husband Ozzy sued over a trademark dispute.
During a 2019 interview with CNBC, Watson boasted that he was friends with the Osbournes after the two parties settled a lawsuit over the company's Ozyfest and its likeness to the Osbournes' Ozzfest music festival.
Sharon Osburne, pictured with her husband Ozy, denied Watson's claims and said her interactions with Ozy Media were never amicable as the couple sued over the company's Ozyfest name due to its striking similarity to the heavy metal legend's Ozzfest
He added 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.'
But Sharon told CNBC on Thursday night that Watson's story was just one more of the many lies being exposed in the wake of a tsunami of claims against Ozy Media that began just five days ago when a co-founder was accused of posing as a YouTube exec to investors.
'We're not ever, ever a friend, and we don't have any interest in his company,' Sharon said. 'He's insane. 'This guy is the biggest shyster I have ever seen in my life. We're not ever, ever a friend, and we don't have any interest in his company.'
On Monday, Watson said he regretted saying that Osbourne was an investor and said hthat she was awarded shares in the company after filing the lawsuit against Ozy for using the name 'Ozy Fest' - claiming copyright infringement.
Ozzfest was an annual music tour founded by Sharon Osbourne and her husband.
Watson conceded during his TODAY interview on Monday that he, in fact, never did meet Sharon Osbourne.
'It's true that she hasn't met me,' he said.
'The agreement was that [after she sued Ozy Media], we were going to give her shares in the company.
'And the way I think of that, and I think the way a lot of people think about it, if you own shares in a company, you're an investor. She may not have liked that word.'
Watson added: 'I'm not going to raise money by telling sophisticated people that Sharon Osbourne is an investor.'
During his interview with TODAY, Watson denied Ozy Media was a 'house of cards' and rejected comparisons to disgraced Theranos founder Elizabeth Holmes.
He said it was 'slanderous' for people to 'put my name in league alongside Elizabeth Holmes, who never had a real product, who raised billions of dollars?'
'We have five newsletters that go out to millions of people, a dozen TV shows including one that won an Emmy.
'That is not a house of cards.'
Katty Kay (left), who left a lengthy career at the BBC to join Ozy just three months ago, quit in disgust last week, following allegations that Rao (right) impersonated a YouTube executive on a call with potential investors
Ozy Founder Carlos Watson speaks onstage during Ozy Fest 2018 at Rumsey Playfield in Central Park on July 21, 2018. Company claimed to have sold 20,000 tickets to a venue with a capacity of 5,000
The company co-founder, Samir Rao, is facing an FBI probe after allegedly impersonating a YouTube executive during a February 2 conference call with Goldman Sachs to convince the Wall Street giant to close in on a $40million investment in the start-up media company.
Watson told TODAY that he did not know that Rao would be impersonating a YouTube executive during the conference call.
'It's sad, and it's difficult. It was wrong,' Watson said.
'Obviously, they figured it out very quickly.
The New York Times story triggered canceled shows, an internal investigation, investor concern and high-level departures at the company.
An emailed statement Friday from Ozy Media's board called it a company with many 'world-class journalists and experienced professionals to whom we owe tremendous gratitude.'
It said it was 'with the heaviest of hearts that we must announce today that we are closing Ozy's doors.'
The board's statement from Friday did not give the reason for shutting down the company based in Mountain View, California.
Watson started Ozy in 2013. It published stories on its website, made podcasts, newsletters and shows and hosted the OzyFest festival. Its website remained up on Friday afternoon.
It also addressed long-held industry questions of whether Ozy was inflating its audience size.
In a tweet, Watson claimed 25 million newsletter subscribers - the New York Times, with a much bigger brand presence, says it has 15 million newsletter readers - and more than 30 million views on YouTube. The Times said fewer than 500,000 people went to Ozy's website in June and July, according to Comscore data.
On Thursday, Marc Lasry, the hedge-fund billionaire and Milwaukee Bucks co-owner who had been named Ozy's chairman in September, resigned, citing Ozy's need for someone experienced in crisis management and investigations. He remained an investor.
A high-profile employee, former BBC anchor Katty Kay, resigned earlier in the week, and an early investor, a venture capital firm, gave up its Ozy shares. The board had reportedly hired a law firm to review Ozy's business activities.
Cable network A&E pulled a special on mental health hosted by Watson that was scheduled for Monday night, and Watson stepped down from hosting a documentary Emmy awards show Wednesday night.
Stylist Kimmy Erin Kertes (pictured left with Watson) who dressed Ozy's Carlos Watson when he appeared on The Carlos Watson show posted an Instagram Saturday in the wake of embattled digital news site Ozy Media shutting down - and she slammed the company's 'questionable marketing spin' and the 'unethical' decisions made by executives
Kertes, who goes by KimmyErin on the social media site, posted a series of photos alongside a lengthy caption (pictured) after Watson just yesterday gathered the company's staffers at the headquarters in Mountain View, California, to announce through tears that the company was finished
The website Crunchbase, which tracks corporate fund-raising, said Ozy had raised more than $70 million from investors as of late 2019.
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.
Earlier this year Emmy Award-winning television producer Brad Bessey quit the company after he discovered he was producing a show for Ozy without there being a network on which to air it.
Bessey joined the fraudulent network show in June 2020, to work on The Carlos Watson Show - a daily, half-hour talk show presented by Watson, who is also Ozy's CEO.
He was told repeatedly that the show would be broadcast on the cable channel A&E.
Last week, a stylist who worked on Ozy Media's The Carlos Watson Show slammed the company's 'questionable marketing spin' and the 'unethical' decisions made by executives.
Kimmy Erin Kertes, who goes by KimmyErin on Instagram, posted a series of photos - first of her cozied to Watson, and then of him in the outfits she seemingly styled throughout the show.
Kertes made the post on Friday, soon after Watson gathered the company's staffers at the headquarters in Mountain View, California, to announce through tears that the company was finished.
Kertes noted Watson's charm, charisma and easy-to-follow vision, 'especially in light of the racial injustice,' but then criticized Ozy's board and executives for their 'unethical and brutal choices,' adding that she 'always wondered' if the company was 'a house of cards'
'Let me explain,' she started the lengthy caption on the post, noting that Friday, when she found out she was losing her job, was 'heartbreaking to say the very least'.
She noted Watson's charm, charisma and easy-to-follow vision, 'especially in light of the racial injustice,' but then criticized Ozy's board and executives for their 'unethical and brutal choices,' adding that she 'always wondered' if the company was 'a house of cards'.
'The crew of The Carlos Watson Show was blindsided by an article in The New York Times revealing damning information about potential securities fraud and fake audiences and questionable marketing spin,' Kertes penned.
Kertes referenced Bessey in her post, noting that as he 'left for ethical reasons, (she) stayed on for the paycheck and the hope that somehow we would find our audience and get the message out'.
She noted that she was looking forward to the show 'moving production to LA in January,' after revealing that serving as Watson's stylist was a 'sacrifice my daughter and husband made to not have her mama home'.
Kertes was obviously saddened by what The Times' story revealed. She said: 'I feel like I have to delete his photos off my website and social media.
Kertes was obviously saddened by what The Times' story revealed and later posted an Instagram story showing off her hair after leaving the salon adding that 'everything is gonna be alright'
'It's a bummer that I can't be proud of some thing I was a part of for 17 months of a pivotal moment in time and in my life navigating work as a new mom. It's a bummer I can't be proud of Carlos Watson. It's a bummer it was just a paycheck.'
Days after The Times story broke Forbes revealed how Ozy operated a toxic and abusive culture of overworking young and inexperienced employees, making workers in their 20s manage entire departments.
Eva Rodriguez, 24, a creative director at the company since 2017, found herself so overburdened at her job that she was rushed to the ER and later admitted into a six-week outpatient program for 'extremely depressed people' after suffering from a panic attack late last year.
As for Kertes, she's 'not going to let one dude's greed and drive erase my (and my colleagues') hard work'.
She noted that more than 100 'talented, hard working people have lost their jobs and I worry greatly that more fallout will come. l that will be hard for all of us to digest'.
Earlier this year Emmy Award-winning television producer Brad Bessey (pictured) quit the company after he discovered he was producing a show for Ozy without there being a network on which to air it
Kertes signed off the caption by saying: 'So that's where I'm at. Heart broken.
Sending love and solidarity to all who were affected that I've been lucky enough to meet.'
She later posted an Instagram story showing off her hair after leaving the salon. 'Super heartbreaking day for me professionally... But I got my hair did. And it looks great. Everything is gonna be alright,' the text over the photo read.
Other employees at the company also claim to have long had suspicions the company was a house of cards.
'I felt like I was killing myself for very little recognition,' one former editorial employee who left in 2019 said to Business Insider. 'I have never once told someone that I worked at Ozy and they've known what it is. Not once. That was concerning to me.
'Carlos, for his faults, is a fantastic leader and inspirational figurehead. If you've ever spent any time with him, he can convince anyone to do anything, which is both a blessing and a curse,' said one former staffer who described the company as 'the cult of Carlos.'
'It's the worst place I ever worked,' another former employee said. 'My mental health was never as bad as when I worked at Ozy.'
The worker described being asked to write up to five stories a week which would normally require lengthy interviews.
If staffers were seen to be unable to keep up Watson suggested that the site use freelances in a 'veiled threat to fire us, in a way.'
There was also a push for employees to stay in the office and continue to work.
'They're Goldman alums. They don't care if it's impossible — just make it happen,' the source added.
Another former staffer told how Watson held little regard for staffers personal time with a Sunday afternoon meeting often delayed by several hours.
'Sometimes, it would be slated to start at 3pm and not start until 6 or 7pm, so it's just eating up more and more of my personal life and personal time, and I couldn't do it anymore. I was totally run ragged,' they explained.
Eva Rodriguez (pictured), 24, a creative director at the company since 2017, found herself so overburdened at her job that she was rushed to the ER and later admitted into a six-week outpatient program for 'extremely depressed people' after suffering from a panic attack late last year
Watson had claimed the company to have 25 million subscribers to its newsletters and boasted they coupled with TV projects helped to drive revenue to $50 million a year.
Those employed by the company wondered if readers were unwittingly subscribed perhaps through partnerships with other publications such as the New York Times and Wired which helped to grow Ozy's email footprint through cross-promotion.
It appeared widely known in the newsroom that the company had purchased advertising space on social media and other websites but there were indications everything was not as it appeared to be.
Articles sometimes had a huge number of views on social media but often no comments or shares - and in a sign that things may not have been all that they appeared, would also sometimes have sky-high views on social media but zero comments or shares, an indication that such 'viewers' might not have been legitimate.
A couple of staffers in the newsroom who had no access to readership numbers questioned Ozy's true reach after some nine years, there were still plenty of interviewees who had never heard of the site.
'Nine years in, having to explain to people who we are — that seems strange to me,' Eugene Robinson, a former editor-at-large, said to Insider.
Traffic to the site fell dramatically in 2017 after Facebook adjusted its algorithm leading to fewer stories appearing in users feeds.
Kertes said in her post announcing she lost her job at Ozy's The Carlson Show: 'It's a bummer that I can't be proud of some thing I was a part of for 17 months of a pivotal moment in time and in my life navigating work as a new mom. It's a bummer I can't be proud of Carlos Watson. It's a bummer it was just a paycheck'
Ozy then attempted to combine audience figures from the website, social media, TV and newsletters in another desperate attempt to bolster figures and give the illusion of growth.
Following the New York Times story, advertisers had been questioning and seeking to review Ozy's metrics.
Meanwhile, along with its news department and number of non-fiction television shows, in 2016 Ozy launched its own Manhattan-based music and comedy festival, OzyFest – which brought a cease-and-desist letter from Ozzy Osbourne who claimed that the name was too similar to his Ozzfest music festival.
Watson had once vowed that the annual event was going to be 'the new South-by-Southwest,' but former employees and insiders said that the struggling festival was more akin to the infamous Fyre Festival.
By 2018, Ozy was raising eyebrows with the claim that it had sold 20,000 tickets to that year's event at the Rumsey Playfield despite the venue only having a capacity of just 5,000.
'We had never proven the ability to sell even 5,000 tickets,' a former employee told Forbes. 'When we were trying to sell 5,000 tickets we were begging people to buy them. We were putting them on discount, discount, discount, giving them away.'
Much like the Fyre Festival, the failed 2017 event meant to promote the Fyre music booking app, Ozyfest seemed to be an expense that promised much more than it could deliver.
Then in 2019, Watson made an ambitious gamble by scheduling Ozy Fest for Central Park's massive Great Lawn, vowing to sell 100,000 tickets and promising appearances from comedian Trevor Noah and billionaire entrepreneur Mark Cuban.
Planning for the event got off to a rocky start after the company was busted using an image of the much more popular Global Citizen Festival in ads for the Ozyfest- a bait-and-switch that Ozy execs blamed on a rogue team member.
And the promised lineup for the event was even more sleight of hand, according to former employees.
Insiders say it came as a relief when Ozyfest (pictured) was cancelled at the last minute by Mayor Bill de Blasio, who also called off the New York City Triathlon due to a searing heatwave that hit 100 degrees. Likewise, Ozy's 2020 festival was canceled due to the pandemic
'The way they'd get guests on their TV shows and guests on their festivals is they'd lie and say they already had commitments from X, Y and Z,' one employee who worked on Ozy Fest told Forbes.
'And they were like, oh that person dropped out, oh that person can't participate. But they never had those people to begin with.'
Another employee told Forbes that unlike other media outlets that give trade air-time with guests who appear on their shows by allowing the stars a chance to talk about their projects or causes, Ozy's high profile guests were always paid for.
'Ozy would bill them as 'friends of Ozy' and that's why they're there,' says the former employee. 'But no, they were paid to show up. Everything has a price tag.'
Documents filed with the New York City Buildings Department showed the 2019 festival was only licensed to host 15,500 people per day during the two-day festival.
Staging the event would have cost some $6million, in addition to the millions Ozy likely spent on advertising, according to experts consulted by Forbes.
Insiders say it came as a relief when the festival was cancelled at the last minute by Mayor Bill de Blasio, who also called off the New York City Triathlon due to a searing heatwave that hit 100 degrees.
Likewise, Ozy's 2020 festival was canceled due to the pandemic.
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