The digital media start-up, led by Carlos Watson, had come under scrutiny for its business practices following articles in The Times.
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, debuted 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, saying in a statement, “I believe that going forward Ozy requires experience in areas like crisis management and investigations, where I do not have particular expertise.” Ron Conway, a Silicon Valley investor and an early Ozy backer, said this week that he had returned his shares to the company.
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 call, the impersonator told the Goldman Sachs team that Ozy was a great success on the platform.
Mr. Watson apologized to Goldman Sachs after the call, saying the impersonator was Samir Rao, the co-founder and chief operating officer of Ozy. In his apology to Goldman Sachs and in an email to The Times last week, Mr. Watson said that Mr. Rao had been going through a mental health crisis at the time and was “now thriving again.”
After the conference call, YouTube’s security team started an investigation of the matter. In addition, 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.
Ozy also lost one of its biggest stars in recent days The former BBC anchor Katty Kay, who had joined Ozy this year after nearly three decades at the British broadcaster, announced on Twitter that she had handed in her resignation on Tuesday morning, saying 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.”
Brad Bessey, an Emmy-winning executive producer, and Heidi Clements, a longtime TV writer, said in an article published in The Times on Thursday that they had been misled by Ozy executives while they were working on “The Carlos Watson Show,” Mr. Watson’s talk show, for the company. Specifically, they said, executives had told them the show would appear on the cable network A&E. Mr. Bessey resigned when he learned there was no such deal in place, and the show ended up appearing on YouTube and the Ozy website.
In addition to Ms. Powell Jobs, early investors included Axel Springer, the Berlin publishing giant, and David Drummond, the former chief legal officer at Google. In 2019, Ozy said it raised $35 million from a group led by Mr. Lasry. The Ford Foundation, seeking to support a minority-led company, also backed the company with grants, its president, Darren Walker, said. By April 2020, Ozy had raised more than $83 million and valued itself at $159 million, according to the data service PitchBook.
This is a developing story. Check back for updates.
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