The Ozy Media saga spiraled out of control at warp speed, leaving heads spinning. Not only did the crisis lead to the demise of the company — or did it? — the CEO blamed, at least in part, his crisis counselors.

On Sunday, Sept. 26, New York Times media reporter Ben Smith broke the news that during a February phone call with potential investor Goldman Sachs, Ozy COO Samir Rao posed as a YouTube executive who hailed the company. Smith also recapped previous skepticism about audience numbers from Mountain View, California-based Ozy, which CEO Carlos Watson and Rao created in 2013 to produce podcasts, TV shows, and events.

Ozy attributed the Rao episode to a bout of mental illness (communications question: Was that true?). The company faces other accusations, including that it claimed A&E was involved with one of its shows when it wasn’t.

Quick Response

The response to Smith’s story was quick. Journalist Katty Kay, who joined Ozy after decades at the BBC, departed. Investor Marc Lasry resigned as chairman, saying he lacked the crisis expertise to deal with the situation. A slew of advertisers halted their campaigns. On Sept. 29, Ozy said it hired major-league law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to investigate its business practices.

Yet by Friday, Oct. 1 — five days after Smith’s story appeared — the writing was on the whiteboard. According to a company statement, it was “with the heaviest of hearts that we must announce today that we are closing Ozy’s doors.”

Or was it? On Monday this week, Watson went on the Today show to announce Ozy was in fact not shutting down. “This is our Tylenol moment,” he said, absurdly comparing the self-imposed mess to the famous 1982 crisis in which Johnson & Johnson was lauded for its response to product tampering.

Many Troubles

Today’s Craig Melvin listed Ozy’s many troubles and asked Watson why anyone should trust him. Watson blamed his crisis counselors.

“Last week I got some incredibly bad advice,” he said. “I got advice from some crisis communications folks to go silent. I should not have done that. What ended up over the next week was some half truths, um, in some cases some real things that we did not well, and that we should have done better and different.” He added:  “I wish I had stepped up. I wish I had engaged.”

In fact, the company wasn’t all that silent.

The mixed messages on whether Ozy was shuttering were really the bad communications part. What was — and is — going on here? Ozy reportedly told employees Friday that they would be receiving their final paychecks.

‘New Ideas’

Kerry Flynn and Brian Stelter, writing on CNN, opined that Watson was relying on his habit of trying to “create an appearance of success.” They quoted an unnamed executive who knows Watson: “Carlos is doing what Carlos has always done — he’s rolling out new ideas in the media without addressing any of the old questions.”

That’s bad crisis communications. It’s also an example of how being overly optimistic can lead to bad outcomes (an investor has already sued).

On Monday, the NYT’s Smith, citing an unnamed source, wrote that the Paul Weiss probe was off: The Ozy board members who hired the law firm had resigned.

Image Credit: Shutterstock

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