Ozy Media, the embattled digital media company that had said it would be shutting down in the wake of a scandal, is now reversing course and will continue to operate, according to its chief, who called the prior announcement premature.
Carlos Watson, CEO of Ozy, announced the dramatic pivot in an Oct. 4 interview on CNBC’s Squawk Box, during which he acknowledged scope for improvement and said he hoped the company would emerge revitalized from recent controversy.
“As embarrassing as it may sometimes feel to do, I realize that we were premature,” Watson said of last week’s decision to shut down, noting that “good conversations” over the weekend with investors and advertisers prompted the turnabout.
The company announced last week that it would suspend operations and move ahead with an orderly wind-down after damning media coverage of deceitful practices, including overstating its audience numbers and an Ozy staffer posing as a YouTube executive.
The company’s board of directors said in an Oct. 1 statement, “It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy’s doors.”
Watson, in an Oct. 1 letter to company investors that was cited by Axios, touched on the fallout from the controversy.
“As you know, Ozy has been materially and adversely affected by recent events,” the letter reads. “After considering all alternatives and input from many of you, we have determined that ceasing operations and beginning the process of winding down the company with an eye toward preservation of value is in the best interest of all stakeholders.”
Those announcements came on the heels of an expose by The New York Times, which claimed that Ozy co-founder and Chief Operating Officer Samir Rao pretended to be a YouTube executive on a conference call with Goldman Sachs several months ago as the investment bank was closing in on a $40 million investment in the media company.
After the misrepresentation came to light, Watson apologized, attributing the incident to a mental health crisis.
Watson co-founded Ozy in 2013 with Rao. Both are Harvard graduates and both worked for Goldman Sachs at one point.
Ozy produces left-leaning podcasts, television series, and events.
“We have lots of things we have to do to improve, but I very genuinely feel like we have a meaningful, transformational voice,” Watson said during the Oct. 4 CNBC interview.
Company officials didn’t respond to a request for comment by press time.