On Wednesday, November 10, Carlos Watson, the embattled founder and C.E.O. of Ozy Media, told me that he was flying from his home in Mountain View, California, down to Los Angeles, where I was staying, to see me. Carlos wanted to have lunch at the house I had been renting for a few weeks in the Hollywood Hills, and to discuss his current predicament, which can best be described as a near-constant state of chaos ever since Ben Smith, the well-respected and intrepid New York Times media columnist, dropped a bombshell report about the company in late September. The only ground rules for the on-the-record conversation related to the kind of sandwich that I was buying him for lunch from Joan’s on Third, L.A.’s version of Dean & Deluca—a highly curated, overpriced boulangerie. “No roast beef,” Watson texted after I presented him with Joan’s lunch menu. “Turkey club.” And then in all caps, “NO MAYO.”
This was a very important point, apparently, and one reiterated to me by Kate Bohner, Watson’s new public relations adviser. (Watson hired Kate after first hiring Phil Singer, a former Clinton aide whom Smith had originally described in his piece a few weeks earlier as his “new public relations adviser.”) I’ve known Kate for 30 years. We both worked at Lazard, the tony investment bank, in the early 1990s. I was a banking associate; she was a two-year banking analyst, fresh out of the University of Pennsylvania. This was well before her brief marriage to Michael Lewis, a friend and former colleague, and her longer career as a journalist at Forbes, at CNBC, and as an E-Trade television anchor. Kate told me she was the one who recommended to Carlos that he speak to me amid the ongoing fallout from the Smith article. Maybe there was an alternative narrative that was worth exploring, she suggested.
“Any sandwich will be fine,” Kate texted me, “except and this is a big except—no Mayo! He told me Mayo is the only thing that will kill him.”
The mere fact that Carlos was still kicking following the reportorial evisceration that Ozy had endured at Ben Smith’s hand seemed itself some kind of minor miracle. The bombshell in the September 26 column related to what happened during a due diligence telephone call that Goldman Sachs conducted, in February 2021, with an executive it thought was a representative of YouTube. Goldman was then considering a $40 million investment in Ozy, and the call with YouTube was meant to verify Ozy’s representation to Goldman that it had a great relationship with YouTube and that its videos had more than 1 million views on the platform.
But the call went haywire, Smith reported, when the Goldman team suspected that something was off with the voice of the supposed YouTube executive, who had “told the bankers what they wanted to hear,” Smith wrote, which was that Ozy’s videos were popular and generated ad revenue and that Watson was a great C.E.O. But, as Smith reported, the alleged YouTube executive was actually being impersonated by Samir Rao, Ozy’s co-founder and chief operating officer. In the end, Goldman passed on the Ozy investment and the incident went unreported until Smith’s column appeared. (A representative for Goldman confirmed the episode to me. He also said that Goldman had spent around $50,000 in ad-buys in the Ozy newsletters after February, a fraction of what was to be a $250,000 advertising deal.)
Watson told Smith that Rao had been suffering from a “mental health crisis” and had taken a leave from Ozy after the call, but had since returned to work at the company. He said he was proud to have stood by Rao “while he struggled.” Marc Lasry, a hedge fund manager, Ozy investor, and board member whom Barack Obama nearly appointed to be the U.S. Ambassador to France a decade ago, told Smith that the Ozy board was aware of the incident and that the board, too, was proud of the way Carlos and his team had handled the Rao matter. The support for Rao had its limits, though. On October 15, in a letter to his investors, Watson noted that Rao had left Ozy, and would “not be returning to the company.”
Smith also reported other problems at Ozy, including staff defections, buying web traffic from “low quality sources,” and overstating the readership for its newsletters, podcasts and TV shows. Katy Kay, the high-profile former longtime BBC anchor, resigned from Ozy after only a few months. Eugene Robinson, who was fired by Ozy after serving as an editor-at-large from 2012 to November 2021, told Smith that Ozy was a “Potemkin Village.”
By then, the media torrent had been unleashed. Smith wrote several follow-up pieces to his first Ozy story. On September 30, he reported that a producer of The Carlos Watson Show had been led to believe the program would appear in prime time on A&E, the cable channel, rather than on YouTube, where it eventually aired. The producer resigned. (“We clearly got out in front of ourselves in our outreach to early guests by referencing A&E instead of YouTube even after we shifted,” Carlos wrote in his October 15 letter to his investors. “I regret that that happened.”) On October 4, Smith shared that his “reporting continues to uncover instances of possible deception,” including a document that claimed The Carlos Watson Show would appear on Hulu even though the show was not on Hulu, and a letter distributed to Ozy’s investors claiming that a quotation of praise about Watson had appeared in the New York Times when it hadn’t.
More fallout: Lasry resigned as board chairman, issuing a peculiar statement about how he lacked the “particular experience” with “crisis management and investigations” that he believed Ozy required. Smith reported that Paul Weiss, the prominent law firm, was approached to conduct an investigation of Ozy, but the assignment never materialized. (According to someone familiar with the situation, Paul Weiss was actually never retained by Ozy.)
In his October 15 letter to investors, Watson acknowledged having “heard” from the Securities and Exchange Commission and from the Justice Department, and explained that Ozy had opted to retain another law firm, Zuckerman Spaeder, instead of Paul Weiss, “with an excellent reputation and record but with more reasonable fees,” to help with any investigations. (Neither the S.E.C. nor the D.O.J. have commented on the investigations, and it is unknown whether they will lead to charges.)
Ron Conway, a Silicon Valley “super angel” investor who was also an investor in Ozy, implored Watson to shutter Ozy and to use its remaining funds—said by Watson to be $10 million—to make payments to some of the 75 shellshocked employees, according to Smith’s reporting. Instead, after briefly pausing operations, Watson reversed course and decided to keep Ozy going and to rededicate himself to its turnaround. Shortly after the first Smith story appeared, Watson appeared on CNBC and the Today show to plead his case and explain why he was soldiering on. But he had gone underground in the subsequent weeks. The story seemed to fade to embers, too. My parade of regular Ozy emails—“OZY Weekender,” “The Best of OZY,” and “OZY Daily Dose”—resumed.
Then, on Monday, November 8, Kate emailed me to say that she had joined the legal and P.R. teams advising Watson and Ozy. “I just love the work and the team,” she wrote. “Carlos is such a nice guy too.” She urged me to keep an open mind about the Ozy story. “[D]on’t judge a book by its cover,” she wrote. “Well more than half of what’s been written is false, out of context, inflated, etc.—maybe even more. It was such an unfair piling on—that it’s hard to tell sometimes where certain threads even got started.” She offered me an exclusive. “You’re the only journalist who I believe could/would cover this story behind the story,” she concluded. She urged me to get in touch. “Write or text!” she wrote. “I’m available all day.”
Over the last decade or so, a series of new media brands have been created to disrupt the broader establishment, and many of them were wrapped around a unique and charismatic founder: Shane Smith forged Vice in his own image just as Arianna Huffington created the Huffington Post in hers. Nick Denton was, for a time at least, the living embodiment of Gawker, just as Bill Simmons remains the incarnation of The Ringer.
Watson created Ozy while looking in his own mirror, too. And it was a wonderful story. Raised by a single mother in Miami, educated at Harvard and Stanford Law School, Watson eventually worked at Goldman, McKinsey, CNN, and MSNBC before starting Ozy around 2013. (I appeared on his MSNBC show a time or two.) His vision for the brand was a quixotic and brainy response to a coarsening and hysterical era on the Internet. Rather than cater to coastal elites, Ozy would create content based on serious issues, such as race and policy, for a broader consumer base. Ozy was arguably out in front of the traditional media in covering talents such as Issa Rae and Amanda Gorman. Watson had also booked eminences such as Lloyd Blankfein, the former C.E.O. of Goldman Sachs, on his signature show. (According to the Goldman representative, Ozy had also reached out to book the current Goldman C.E.O., David Solomon, although he never appeared.)
Ozy was an ambitious idea, and Watson—brilliant, charming, effusive, and trained in the arts of broadcast TV—had the natural salesmanship required of any successful entrepreneur. In addition to Conway and Lasry’s Avenue Capital, Ozy raised money from some other serious financial heavyweights, including Laurene Powell Jobs’ Emerson Collective, and an early investment from Axel Springer, the German media conglomerate that owns both Insider (formerly Business Insider) and Politico, which it recently bought for $1 billion. Other Ozy investors included David Drummond, the former general counsel of Google, and Michael Moe, the founder of GSV Ventures, another Silicon Valley deity. Citing Pitchbook, Smith reported that, by 2020, Ozy had raised “more than $83 million” and valued itself at $159 million.
When Kate texted, I assumed that Watson wanted to explain to me how Ozy was not only a good story turned bad but also that it was still a legitimate business, too. And, of course, to explain to me how Carlos had been terribly misunderstood. After all, he and Kate had reached out to me, a former Wall Street banker, presumably to help to try to facilitate Ozy’s redemption in the face of bad press and, according to both the Times and Watson’s letter to investors, dual investigations by the S.E.C. and the D.O.J. “When is a good time to chat?” I replied to Kate.
After I spoke with Kate that afternoon, I suggested she set up a call for me with Carlos to set the scene, prior to our in-person interview. I then headed out for a jog in the Hollywood Hills, a slow jaunt that took me past the exclusive Mulholland Tennis Club, at the top of a rather large hill, and down to the famous Mulholland Drive and back. I was reminded of Frank Sinatra Has a Cold, the famous magazine profile, published in the April 1966 issue of Esquire, in which Gay Talese circled ole Blue Eyes for an interview, only to be blockaded by one, and then another and another, of his intermediaries.
Over the years, the story has been elevated to a Rosetta Stone, of sorts, for many journalists, especially when subjects refuse to talk. Watson, at first blush, seemed to be quite the opposite: an interview subject who eagerly wanted to connect, and fast. In fact, once I finished my trot, Kate emailed me again that Carlos wanted to meet me the next day, and in person. “Carlos just told me he’d fly to you”—from Mountain View—“if you’re in L.A.,” Kate wrote.
She also shared with me an email that Ben Smith had written that day to Andy Levander, a high-powered attorney at Dechert whom Smith apparently believed Ozy had hired to represent the company in the investigation by the U.S. Attorney’s Office in the Eastern District of New York that was just getting underway. Smith’s email informed Levander that he would soon be writing about the investigation for the Times and also about another investigation into Ozy being conducted by the S.E.C., which, Smith continued, had requested documents “connected to Ozy from investors.” (Levander did not respond to my request for comment so I could not independently confirm whether he’s still working for Ozy, or not, or the status of any investigations.)
I wasn’t exactly sure why Kate had shared the emails with me about the two investigations. Was she trying to alert me to the fact that Ozy knew about them and that Smith would be breaking the story? It was the latest unusual twist in a couple of days filled with them.
As I was panting up the steep hills, I got to thinking about what was transpiring, journalistically. I was surprised by Carlos’ sense of urgency not only to meet with me, but also his willingness to fly to Los Angeles, rather than to just Zoom. I suggested to Kate that Wednesday, November 10—two days later—would be an easier day to meet and that the next day, Tuesday, we should first do a Zoom call to get the lay of the land and see how things went. Watson, perhaps frazzled from the negative press and legal pressures, seemed intent on the hard pitch. I wanted to slow down the cadence a little, and catch my breath both figuratively and metaphorically.
All caps response from Kate, still urging me to agree to the in-person meeting with him on Tuesday: “HE CAN DO TOMORROW ANYTIME,” she wrote. “He doesn’t mind meeting you late, like after dinner, either.” She also wrote that Wednesday would also work for our in-person meeting, if I preferred. In the end, we agreed that Carlos and I would have a Zoom on Tuesday for an hour or so and then to meet on Wednesday at my L.A. rental.
Later that night, Kate sent me a copy of a nine-page letter that Armstrong Teasdale, yet another one of Ozy’s new law firms, had sent to Diane Brayton, the general counsel of The New York Times. The letter seemed largely focused on Ben Smith. Armstrong Teasdale described Smith as “deeply conflicted” and claimed that his “string” of articles was “inappropriate” and “unjustified,” and that the Times “engaged in defamation and libel as well as tortious interference” with advertisers and ad agencies, both of which have “begun to either breach” or “attempt to cancel” contracts with Ozy.
I also received another two letters that Armstrong Teasdale had written to GM and to Dentsu, the large global advertising agency, urging them not to renege on their agreements to advertise on Ozy in the wake of the Ben Smith articles. Heavy cake. Ozy and its law firm wanted the Times to suspend Smith “pending further investigation.” (In a statement, Danielle Rhoades Ha, the V.P., Communications at the Times, wrote to me, “Our coverage was accurate and consistent with our policies. We looked into their complaint and responded. No, Ben wasn’t suspended.”)
The gist of Smith’s supposed conflict, according to the letter to the Times, was that Smith not only still owned a significant amount of stock in BuzzFeed, his employer before the Times, but also that BuzzFeed had allegedly “tried to acquire” Ozy two years earlier, for $225 million, with Smith making the initial introductions between Carlos and Jonah Peretti, BuzzFeed’s C.E.O. Ozy’s lawyers stated their belief that Smith had “carte blanche” access to confidential information about Ozy, including its financial statements, its investors, and its commercial agreements and that therefore he shouldn’t have been writing about the company in The New York Times.
Armstrong Teasdale also alleged that Watson and Ozy had twice rejected BuzzFeed’s supposed $225 million offer, once in November 2019 and again in January 2020, right before Smith left BuzzFeed for The New York Times. There was the allegation that if BuzzFeed succeeded in buying Ozy that Carlos “was to become President of BuzzFeed and Mr. Smith’s boss,” the lawyers wrote. “Mr. Smith bucked at that.” Armstrong Teasdale further argued that Smith was miffed that the Ozy deal did not happen because both he and Peretti “had hoped that buying the Black-owned, up-and-coming, irreverent and inspiring OZY would have allowed BuzzFeed to gain fresh momentum and ultimately go public,” the lawyers continued, “which could have made Mr. Smith more than $50M.”
In the letter, however, there was no explanation of the contradictory allegations that Smith wanted BuzzFeed to buy Ozy to get his theoretical windfall, but simultaneously didn’t want BuzzFeed to do the deal because he didn’t want Carlos to be his boss. Furthermore, according to a number of people familiar with the conversations between Ozy and BuzzFeed, Smith’s role in any dialogue between the companies was generally limited to his initial email introducing Watson to Peretti. (It also seems rather unlikely that a newsroom executive would participate in any business combination discussions or a merger due diligence session, except superficially.)
Regardless, according to a source familiar with the situation, Smith had already submitted his resignation to Peretti in order to join the Times, obviating the impact on him of the suggestion that Watson would become his boss as part of a BuzzFeed-Ozy combination. Additionally, Peretti wasn’t likely to share information about any potential deal with someone leaving BuzzFeed for the Times. (Smith stated in his first Times piece that he was only peripherally involved in the deal talks. My requests to review Ozy’s private financial statements, in order to evaluate the logic of the alleged $225 million BuzzFeed offer, were denied.)
And while it’s true that Buzzfeed had been charting its own financial exit strategy for some time, I was told by multiple people familiar with the matter that the discussions between BuzzFeed and Ozy never got much beyond the talking stage. There may have been a PowerPoint presentation or two exchanged, I’m told, but nothing resembling a term sheet was produced and shared. “It was an inchoate idea that was only in the first or second inning,” is the way one participant described to me the BuzzFeed-Ozy merger conversations. According to someone else close to the brief discussions between BuzzFeed and Ozy, “Any suggestion that this was just about to happen is just not true.”
In any event, BuzzFeed, without Ozy, will likely succeed in going public in the coming days, via a combination with a SPAC sponsored by 890 5th Avenue Partners, at a projected $1.5 billion valuation. Given that BuzzFeed raised about $550 million in equity financing from a series of well-heeled Silicon Valley investors, according to Crunchbase, as well as from NBCUniversal, which kicked in $400 million, presumably all (or at least most) of it on a preferred basis, it seems extraordinarily unlikely and fanciful that any individual employee, like Smith, could be in a position to ka-ching anywhere remotely near the range of $50 million. (Smith declined to comment. Peretti did not respond to a request for comment.)
On Tuesday afternoon, as planned, I dialed into a Zoom with Watson and Kate. We agreed that this preliminary conversation would be conducted “on background,” journalist argot for an understanding that I wouldn’t quote or attribute facts to him. I agreed to this only because we were scheduled for an on-the-record, in-person interview at my rental house in the Hollywood Hills the next day. Otherwise I would never have consented to a background conversation with him, especially since he and Kate reached out to me.
Regardless, I was looking forward to chatting with him on the record a day later and hearing what he had to say. Watson, after all, seemed very much the careful analytical thinker one expects to come out of McKinsey, or the kind of polished specimens that Goldman manufactures. As he told his investors in that October 15 letter, “I continue to believe deeply in OZY and our mission to help curious people see the world more broadly and more boldly. We created something real and valuable including 5 newsletters, 10+ tv shows (on the air and in development), 6 podcasts, 4 festivals and relationships with ~30 of the Fortune 1000. While we now have a long way to go to get back on our feet, I am focused on getting us there.”
The next morning—his sandwich without mayonnaise procured—I waited for Carlos to arrive in the Hollywood Hills, occasionally peering over the glass wall on the deck three stories up to see if his car was coming around the winding and hilly roads. I was still more than a little surprised that he’d been willing to fly down from Mountain View to see me in Los Angeles. But Kate assured me by text that Carlos would be at the house by 2 p.m.
At 1:41, I texted him and wondered if he was arriving by Uber or by rental car. If the latter, I had to direct him to the sparse street parking or the narrow parking bays at the house. “Just landed,” he texted back. “Sorry. Uber.” We agreed to meet at 3 p.m. since he was running late. At 3:44, Carlos texted, “Sorry for the delay. See you shortly.” Kate told me he was sitting in a car right outside my house on a phone call and would be coming in shortly. But I didn’t see him. I was beginning to think he was ghosting me.
At the same time, Ben Smith and Ben Protess, another New York Times reporter, broke the news about the S.E.C. and Justice Department investigations into Ozy. They had gotten hold of the letter that Carlos had written to Ozy’s investors about the investigations and informing them that Ozy had hired Zuckerman Spaeder. The Times wrote that Levander, at Dechert, had been hired, too. But no mention was made of the hiring of Armstrong Teasdale or of the involvement of yet another lawyer, David Lawrence, who had spent around 20 years at Goldman Sachs as associate general counsel and who was also advising Carlos. In fact, it seemed that Lawrence was at the time potentially the most influential of all Carlos Watson’s new set of advisors. (Lawrence nixed my request to quote Watson or attribute facts to him from our conversation.)
Watson’s letter to investors, made public by Protess and Smith, revealed that Ozy was “taking a very deliberate approach with the media going forward” in the belief that “it is best not to aggravate social media activity by responding to any and all inquiries designed to provoke additional rounds of coverage.” Was Carlos’ overture to me part of the new, “very deliberate” approach to the media?
As the minutes ticked by without Carlos’ arrival, I began to wonder if there was a connection between the publication of the latest Times story about Ozy and the fact that Carlos still had not shown up at my door. Certainly if I were advising him, I would tell him to keep quiet, especially in the face of the two federal investigations. Perhaps the lawyers were starting to take over from Kate in the strategy department.
At 4:27, nearly two and a half hours after we had originally planned to meet, I texted Kate and asked her if maybe Carlos wanted to reschedule for the next day and wondered if he were staying overnight in Los Angeles. “Holy smokes,” Kate replied, surprised. “[S]o Carlos didn’t come in? Holy cow. Last time I spoke to him he was going to come to you.” She wrote that she would find out what was going on. With no answer and the afternoon light fading, I decided to go for another run. More hills. More trudging.
When I got back to the house, there was still no sign of Carlos. I was told that he had wanted to come to see me, to shake my hand, and to apologize for not being able to talk after all. But, I was told, his lawyers threatened to quit if he stepped one foot into the same house where I was staying. In fact, I never heard from him after his 3:44 p.m. text to me.
I began to sympathize more than ever with Gay Talese. Of course, unlike Talese and Sinatra, I wouldn’t have cared one way or the other had I never spoken to Carlos Watson in my life. (Kasowitz Benson Torres, Watson’s newest legal counsel, told me that the Ozy founder declined to comment on why he did not show up at my rental house after agreeing to do so; or to elaborate on the discrepancies between my reporting on the BuzzFeed-Ozy discussions and what his lawyers told the Times; or to answer any questions about Watson’s plans to rejuvenate Ozy, as he mentioned in his letter to investors. Lawrence, likewise, did not agree to be interviewed, preferring to put the attorney from Armstrong Teasdale on the phone with me to answer questions, albeit off-the-record.)
That evening, as the dust was settling on what turned out to be a very strange couple of days, my family and I headed to a trendy sushi restaurant in the hipster Silver Lake neighborhood. As I was driving our rental car through one of the many treacherous Los Angeles roads and marveling at yet another example of surprising human behavior, I spied the license plate of a car parked on the side of the road. It was one of those older California license plates, the ones with the black background and the orange letters. It read: “NO MAYO.”