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Media Meltdowns

Ozy Media Is Still A Monumental Bummer

NEW YORK, NY - JULY 21: Carlos Watson speaks onstage during OZY FEST 2018 at Rumsey Playfield, Central Park on July 21, 2018 in New York City.
Matthew Eisman/Getty Images for Ozy Media|

Yeah, you read that right. Photo for Ozy Media. We’re using a photo they contracted for. Too bad!

Samir Rao was trying to be someone else, and having a rough time of it. In real life, Rao was the Chief Operating Officer of Ozy Media. But on a crucial work call with people he hoped would invest money in his company money, Rao was pretending to be Alex Piper, the head of unscripted programming for YouTube Originals. He was using an app on his phone to change his voice, but Ozy CEO Carlos Watson thought his performance needed to be tightened up.

"Use the right pronouns,” Watson texted Rao during the call. “You are NOT OZY.” He later fed some lines: “I am a big fan of Carlos, Samir, and the show.” He also texted Rao to stop using the name of a Goldman Sachs representative on the call; a YouTube exec would not know this person’s name. Ben Smith, then with The New York Times, reported in 2021 that the Goldman team agreed with Watson: Rao did not do a good job pretending to be someone else. They suspected the voice of the person on the other end of the line had been digitally altered, and reached out to Piper. He confirmed that he wasn’t on the call.

None of that, beyond the slapstick details, is really new. I wrote about all of it, talking to former Ozy staffers, as the company imploded in the wake of that story. (Personally, my favorite detail is that Watson threw a copy of The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers at one person.) What happened to all of the staffers stunk. Beyond having to put up with his abuse, they were lied to by Watson, too. He was running what was basically a sham company.

The government apparently agreed. The SEC and U.S. Justice Department announced charges against Watson last Thursday, accusing him of a widespread fraud. Rao and Suzee Han, Ozy’s former Chief of Staff, have pleaded guilty to related charges. Watson was arrested and arraigned that day.

The text messages above come from the charging document. The government says this was not the only impersonation that Watson orchestrated. He’s also accused of telling the company’s CFO to forge a contract between Ozy and a cable network for the second season of an Ozy TV show. She refused, and then Watson and Rao did it anyway. She quit. From the indictment:

Later the same day, after receiving the email with the fake contract, the then-CFO emailed the defendant Watson and Rao to say that she was resigning effective immediately. She explained,“this… is illegal. This is fraud. This is forging someone’s signature with the misrepresentations and omissions about, among other things, OZY’s revenue, the existence of signed contracts for new OZY television shows and the terms of such contracts. This is forging someone’s signature with the intent of getting an advance from a publicly traded bank.” She continued, “To be crystal clear, what you see as a measured risk—I see as a felony. Did either of you (Carlos when you asked me to put together a contract and/or Samir, when you sent the email) have any idea (or did it even occur to you to care) that I could go to jail for forgery and bank fraud?

A person who quits rather than do what she considers to be unethical and uses em-dashes? Do we have a T-shirt for her! The former CFO’s question to Watson and Rao is a good one, I think, and echoes what former staffers told me when I wrote about this after the Times story. Watson in particular just did not seem to care about anyone who worked for them. The company, as he understood it and as he managed it, existed to promote Carlos Watson, even when he was throwing a book. Former Ozy employee Eugene S. Robinson told me that his bosses told him “there’s no such thing as your own time.” The people who worked for Carlos Watson, up to and including the CFO, did not seem to be cared for much by their boss.

But what the charging document also tells me is that ... this all almost worked. From the documents cited by the government, this was an inept, bumbling scam that could and probably should have been found out by potential investors earlier. And yet the government says Ozy used misrepresentations to raise about $50 million over the years. And, per the indictment, Google really was at one point in discussions to buy Ozy. The government calls Google “Media Company 1,” but it also says that Media Company 1 owned “Video Service 1”—which we already know is YouTube from that Times story. Google at least took a meeting with this prolific and shameless scammer to discuss investing in his media company.

And people kept listening! Even after his sham was exposed, Watson was still at it just last month.

Carmen Yulín Cruz, that ex-San Juan mayor, told potential advertisers that Ozy was brand-safe and was all about “spreading love.” This was something like the company’s brand back when it was a company, or anyway a more convincing simulation of one. Do they even still have content? The website won’t load for me currently. That's probably about as brand-safe as Ozy gets.

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