Over the past week, Ozy has gone from a seemingly successful media startup to a now-closed colossal wreck, thanks to a New York Times expose And subsequent report from others electrical outlets to suggest Ozy may have been built on deception.
Reporting on the wide array of alleged misconduct by Ozy’s management raised the question: How has the company, which launched in 2013, avoided scrutiny for so long?
The Daily Beast spoke to more than a dozen current and former Ozy employees, many of whom highlighted the efforts of Ozy founder and CEO Carlos Watson to quell dissent both internally and externally. A spokesperson for Ozy did not respond to a request for comment for this story.
Staff members expressed reluctance to publicize their concerns about the workplace culture or the alleged health of the company due to the strict nondisclosure agreements they signed with Ozy, a move unusual for a group of journalists. Insider and CNN both reported this week on how staff members thought the company was operating as a “Carlos cult”, With the founder both allegedly bullying and charm employees to work 18-hour days and keep internal doubts to themselves.
And Watson seemed to have been successful in battling negativity from other media as well.
In 2019, Ozy featured an article on his annual Ozy Fest for Inc. magazine, a business-focused publication known for its tips and advice for startups, managers, and business owners. But in this case, Inc. heard of a frustrating and low morale work environment at Ozy, where many staff were demoralized by long hours and verbal reprimands from some managers. (Several electrical outlets this week reported as much.)
As a reporter for the publication continued to investigate, Watson struggled to convince the magazine not to publish its reports, even going so far as to fly to New York to meet in person. Inc. brass to implore them to abandon history. The ploy apparently worked; the best editors of Inc. became convinced they didn’t have enough supply to spread a story.
Inc. disputed that Watson’s efforts convinced superiors not to publish, instead saying the outlet was uncomfortable with its own sourcing at the time. “This is absolutely inaccurate. Inc. was pursuing a potential story about the company that didn’t come to fruition because people weren’t willing to do it,” a spokesperson wrote in an email to The Daily. When asked if the magazine regretted not publishing its article, in light of subsequent articles reporting similar concerns about Ozy’s culture in the workplace, the spokesperson reaffirmed than Inc. had “only rumors and no source willing to speak officially.”
Other outlets were apparently less convinced by Watson’s charm.
At the end of 2017, BuzzFeed News published a detailed and damning report about a number of digital publishers buying fraudulent web traffic. The main focus of the story was Ozy, who had just announced a major investment of $ 35 million and bragged about big advertisers like JPMorgan Chase, Amazon and Visa. The report explained how Ozy purchased a service that “automatically loads specific web pages and redirects traffic between participating websites to quickly accumulate views without any human action.”
The story sounded alarm bells inside Ozy, and multiple sources told The Daily Beast that Watson even called then-editor Ben Smith to try and dissuade BuzzFeed News from publishing. While Watson ultimately failed to stop the play, there was a small victory for Ozy: The company was able to convince BuzzFeed not to post how Ozy’s traffic appeared to come from at least one website. pornographic. (Several points of sale reported this week to Ozy’s questionable means to get web traffic.)
And Watson was not shy about shutting down parts of his own company reports. For example, insider reported this week, according to a former editor, Watson killed an Ozy story when she mentioned one of the firm’s own investors.
The digital media startup’s public denouement, which culminated on Friday with Ozy’s council stopped the whole operation– started last weekend when The New York Times reported that COO Samir Rao posed as a YouTube executive during a fundraising appeal with Goldman Sachs officials. The bank reportedly mistrusted the presentation when an infiltrator Rao overstated the performance of Ozy’s videos on the streaming platform. (The Times further reported that law enforcement was investigating the appeal.)
Watson blamed the deceptive ploy on the rao’s mental health struggles, who was asked to take time off pending investigation by an external law firm Paul, Weiss, Rifkind, Wharton and Garrison LLP. But following the Times report, a host of other questions regarding Ozy’s marketing, fundraising, workplace and partnerships emerged, mostly centered on Carlos Watson’s show, a daily interview show hosted by the CEO and founder of the same name.
For example, like The New York Times reported, Watson and Rao urged the show’s producers to have it distributed by A&E, a claim used to entice celebrities like actor Terry Crews and writer Malcolm Gladwell to sit down for interviews. Carlos Watson’s showBrad Bessey’s executive producer resigned when he found out the show was in fact not scheduled to air on A&E, written in a scathing note to Watson and Rao: “You are playing a dangerous game with the truth. The consequences of giving guests an A&E show when we don’t have one are catastrophic for Ozy and for me.
Nonetheless, Watson continued to claim the show would air on A&E and at one point claimed it would become a YouTube Original, special status for paid programming by the video streaming giant. However, when the show finally debuted, it was simply hosted on Ozy’s own YouTube page.
Elsewhere, Ozy has used deceptive marketing tactics to promote Watson’s show and the media company to the general public. An advertisement labeled the show “the most important trade fair of 2020», A quote attributed to Los Angeles Times even if the newspaper could not find any trace of this praise written by its journalists or columnists. Another advertisement called Watson “the best interviewer on television,” citing entertainment media Deadline when in fact, this quote came from the leaders of Ozy themselves. A splashy MTA bus ad for the Watson show declared it to be “Anderson Cooper meets Oprah” – praise awarded once again to the Los Angeles Times when it comes from Ozy own paid content.
Bloomberg reported that Ozy has faced several lawsuits for allegedly failing to pay a company he hired to inflate web traffic and for defaulting on a large small business loan from Regis Capital Group, a Florida-based direct lender. And several outlets further reported that Ozy appeared to serve as a trademark exercise for Watson, a former MSNBC personality, and as such resulted in a allegedly abusive workplace with intense pressure to produce at an exceedingly unrealistic level.
Ozy hired an outside crisis PR firm this week as advertisers and investors bailed out and key figures including former BBC reporter Katty Kay and Chairman of the Board of Directors Marc Lasry resigned. But the damage was done and Ozy is no more.