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Ozy Media Will Shut Down

Ozy Media, the digital media company that came under scrutiny for its business practices in recent days, announced on Friday that it was shutting down.

“At Ozy, we have been blessed with a remarkable team of dedicated staff,” the company’s board of directors 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. It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy’s doors.”

The company, led by the former MSNBC anchor Carlos Watson, was founded in 2013. It attracted high-profile investors including Emerson Collective, the organization run by Laurene Powell Jobs, and Marc Lasry, a hedge fund manager and the co-owner of the Milwaukee Bucks basketball franchise.

In a statement last week, Emerson Collective distanced itself from Ozy, saying that it “did not participate in Ozy’s latest investment round and has not served on its board since 2019.” On Thursday, Mr. Lasry resigned as the chairman of the Ozy board.

The announcement of the shutdown came five days after The New York Times published an article that raised questions about the company, including detailing an episode in which a top executive at Ozy appeared to have impersonated a YouTube executive during a conference call with Goldman Sachs bankers while the company was trying to raise $40 million.

Ozy’s success depended to some degree on the performance of the company’s videos on YouTube. On the conference call, the impersonator told the Goldman Sachs team that Ozy was a great success on the platform.

After the call, Google, the owner of YouTube, alerted the Federal Bureau of Investigations, and Goldman Sachs received an inquiry from federal law enforcement officials, according to three people with knowledge of the matter. The F.B.I.’s San Francisco field office would not confirm or deny the existence of an investigation.

The board said on Tuesday that it had hired Paul, Weiss, Rifkind, Wharton and Garrison, a large international firm with headquarters in New York, to conduct a review of Ozy’s business activities. The board also said it had asked Samir Rao, the chief operating officer of Ozy and the person who apparently impersonated the YouTube executive, “to take a leave of absence pending the results of the investigation.”

After the article was published, Ozy lost one of its biggest stars, when the former BBC anchor Katty Kay, who had joined the company earlier this year after nearly three decades at the British broadcaster, announced that she had resigned. Ms. Kay wrote on Twitter that she had handed in her resignation on Tuesday morning, adding that “the allegations in The New York Times, which caught me by surprise, are serious and deeply troubling and I had no choice but to end my relationship with the company.”

On Thursday, The Times published another report that, last year, Ozy hired a team to make a talk show for the cable network A&E — “The Carlos Watson Show,” hosted by Mr. Watson. Guests were told the show would air on A&E, and the show’s executive producer was told it would premiere in August 2020 in prime time.

The problem: A&E said there was no such deal. The executive producer resigned after finding out, writing to Ozy’s leaders: “You are playing a dangerous game with the truth. The consequences of offering an A&E show to guests when we don’t have one to offer are catastrophic for Ozy and for me.”

When the executive producer, Brad Bessey, resigned, he told the show’s staff that the program was not, in fact, going to be shown on A&E. Mr. Watson then told the people on the Zoom call that “The Carlos Watson Show” would eventually wind up on A&E, according to Mr. Bessey and one other person on the call. Until that time, Mr. Watson added, the show would appear on YouTube as part of its YouTube Originals, a slate of programming made by professional studios and paid for by YouTube.

“The Carlos Watson Show” ended up appearing on Ozy.com and on YouTube, although not as a YouTube Original. A YouTube official confirmed that the show was not a YouTube Original. Mr. Watson and an Ozy spokesperson did not reply to requests for comment.

This is a developing story. Check back for updates.