Ozy Media has dissolved its board of directors and chosen not to retain its law firm, Paul, Weiss, or its recently hired crisis PR firm, the Levinson Group.
Ozy’s board brought on the crisis specialist shop last week to work with it and the law firm on the investigation into Ozy’s traffic and investor relations, a person familiar with the matter confirmed to PRWeek.
The decision followed the Friday evening announcement that Ozy Media was shutting down.
Ozy Media cofounder Carlos Watson has since retracted his shutdown statement, saying on CNBC’s “Squawk Box” on Monday that Ozy is not ceasing operations. He described the decision to close as “premature” and said that over the weekend, Ozy had “good conversations” with investors and advertisers. He referred to it as Ozy’s “Lazarus” moment, after the New Testament biblical figure who Jesus restores to life.
Monday’s announcement came as a surprise to employees who were told on Friday that the board had voted to shut down the company. Watson did not explain how or when the company expects to resume operations.
Ozy Media’s crisis unfolded after The New York Times reported last Monday that cofounder Samir Rao impersonated a YouTube executive on a call with Goldman Sachs. The report called into question the company’s audience numbers and other practices.
At the time of the incident, Goldman Sachs did not decide to pursue an investigation.
Watson responded to the allegations in a tweet last Monday, accusing the Times of publishing falsehoods and calling its reporting a “hit job.” The tweet included screen captures of an internal memo Waston sent to his team in which he claimed Rao’s behavior was the result of a mental health crisis.
The FBI reportedly launched a probe into the company, followed by a board investigation started on Tuesday. Former BBC anchor Katty Kay, who left that network for Ozy, resigned, as did chairman Marc Lasry.
Major advertisers including Ford, Goldman Sachs and Target paused ad campaigns that combined amounted to about $5 million in revenue for Ozy.
As of Monday morning, remaining board members include Watson and venture capitalist Michael Moe. The media company has also retained a financial restructuring firm, according to a letter sent to investors.
An Ozy representative did not respond to requests for comment.
This story first appeared on PRWeek US.
