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After week of scandal, Ozy CEO says it is ‘premature to close down’

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Ozy Media’s CEO said Monday that it was premature to close down the company. He stated that he wanted to continue operating, despite scandals that exposed Ozy as a media outlet that had little audience.

CNBC spoke with Carlos Watson, an ex-cable-news commentator and host who co-founded Ozy in 2013. He said that he met investors and advertisers over the weekend and that Ozy should continue.

The company sent an email Monday describing the difficulties of the past week, saying it was “committed to getting over” and that they are “excited to reopen.” Ozy also stated that newsletters will resume this week and that video production would resume at the end the month.

The board of directors at Ozy announced Friday that the company would cease operations. This shutdown comes less than one week after a New York Times column raised concerns about the media company’s claims of millions viewers and readers. It also highlighted a possible case of securities fraud.

This story led to cancellations of shows, an investigation by the investor community, investor concerns, and departures from high-ranking employees at the company, before Friday’s shutdown.

The Times also reported that Ozy’s chief operating officers and co-founder, Samir Raho, impersonated an executive from YouTube while trying to raise money at the investment bank. Watson stated that he didn’t know what Watson meant by the call. Watson said that he wasn’t there. He continued to state that they had “figured it out”, but didn’t elaborate further. Watson stated, “Look, it is heartbreaking, it is wrong, it doesn’t good, it not OK.” “I love Goldman. I worked there. I have a lot of friends there.

According to Crunchbase, Ozy, a California-based company, had raised more $70 million from investors by late 2019. It has been long suspected of exaggerating its audience size. Watson claimed that Ozy had 25,000,000 subscribers to its newsletter, and 30,000,000 YouTube views last week. The New York Times has a larger brand presence and claims it has 15,000,000 newsletter subscribers. According to Comscore data, the newspaper reported that less than 500,000 people visited Ozy’s website between June and July. It was apparent that Ozy paid for a large portion of its audience, rather than building a base of readers or viewers.

The company must reestablish trust among employees, investors, and advertisers in order to restart. The company abruptly shut down, causing distress to workers. Apart from traffic, it has been found in many dishonest situations. It claimed that it told peopleworking on the interview series “The Carlos Watson Show” that it would air on cable TV. However, episodes were uploaded to YouTube. Watson interviewed Bill Gates, Matthew McConaughey and other celebrities for the online program. Watson spoke on Monday to CNBC, saying that the original show was created with A&E. Then it was “shifted” to YouTube and that there was “lots miscommunication.”

Marc Lasry, the hedge fund billionaire and Milwaukee Bucks coowner, resigned on Thursday. He cited Ozy’s need to have someone skilled in crisis management as well as investigations. He was still an investor. Katty Kay, a former BBC anchor, had resigned earlier this week. A venture capital firm was an early investor and gave up its Ozy shares. According to reports, the board had hired a law firm for a review of Ozy’s business activities.