The online media company whose co-founder impersonated a YouTube executive in an apparent attempt to attract investors has appointed a law firm to investigate its practices.
Ozy Media, whose website promises users that it will “defy convention, change perspectives and ignite ideas”, has appointed Paul, Weiss, Rifkind, Wharton & Garrison to review the company’s business, it said.
It follows a report in the New York Times that broke details of the impersonation and questioned Ozy Media’s audience figures and marketing claims. The law firm’s review was subsequently reported by the Wall Street Journal.
Samir Rao, co-founder and chief operating officer, is at the centre of the news report’s key claim that he impersonated a YouTube executive on a conference call with Goldman Sachs, which was a potential investor, earlier this year.
Ozy Media has confirmed the incident occurred, which it said was the result of a mental health episode.
Rao has been asked to take a leave of absence by the board pending the results of the investigation.
Harry Hawks, a media veteran and former chief financial officer of Hearst Television, has been appointed as interim chief financial officer during the review.
Katty Kay, a veteran BBC journalist who left the organisation in May to work for Ozy, said on Wednesday that she had resigned. “The allegations in the New York Times, which caught me by surprise, are serious and deeply troubling,” she said.
Carlos Watson, chief executive, co-founder and the public face of Ozy Media, earlier this week released a statement that he sent to staff regarding the New York Times article.
It included a quote from Marc Lasry, the billionaire co-owner of the Milwaukee Bucks basketball team who is chair of Ozy Media, that confirmed the board had been made aware of the Goldman Sachs conference call and supported the way it was handled. “The incident was an unfortunate one-time event,” Lasry said in the quote.
Ozy Media was founded in 2013 as a digital media start-up by Watson and Rao and has since expanded into podcasts, TV and events. Germany’s Axel Springer, partners at private equity firm Clayton, Dubilier & Rice, which is attempting to buy UK supermarket Morrisons, and Lasry are among those that have invested in the company.
The New York Times questioned Ozy’s claim in 2019 that it reached 50m unique users a month and compared that to data from Comscore, which measures online engagement, which showed figures at a fraction of that level.
Watson responded in the staff memo posted to Twitter that the company has a database of 26m newsletter subscribers, an audience of 25m for its podcasts and online TV shows and a “social reach” of 30m. “Ozy’s growth . . . has been completely real,” the statement said.
Silicon Valley venture capital group SV Angel surrendered its shares in Ozy yesterday after having invested in the company’s seed round of funding in 2012, said one person briefed on the matter. SV Angel and its founder Ron Conway declined to comment on the move, which was first reported by Axios.
Ozy has said it is unaware of any investigation into its practices after the New York Times wrote that Google, which owns YouTube, alerted the Federal Bureau of Investigation to the conference call with Goldman Sachs.
Watson also said on Twitter that he was “heartbroken” by the report, which he dismissed as a “ridiculous hitjob”.
Ozy Media did not immediately respond to a request for further comment. Rao could not be reached for comment.
Additional reporting by Miles Kruppa in San Francisco