Ozy Media said it wouldn’t shut down after all, days after its board said the embattled digital-media startup was ceasing operations amid growing questions over the company’s business practices.
Ozy Media Chief Executive Carlos Watson said on NBC’s “Today” show Monday morning that the company would resume operations, calling it Ozy Media’s “Lazarus moment,” a reference to a follower of Jesus who is raised from the dead in the biblical Gospel of John.
The announcement is an abrupt reversal for Ozy Media, which has been engulfed in a spreading crisis over the past week in the wake of a New York Times NYT -0.49% article that raised questions about its business. On Friday, Ozy Media’s board of directors released a statement saying it was closing Ozy’s doors “with the heaviest of hearts.”
A spokesman for Ozy Media said the company has begun reaching out to former employees to bring them back, adding that staffers who don’t want to return to Ozy Media would be “paid whatever is owed to them.”
The company also plans to resume producing newsletters this week and production of its videos later this month, the spokesman said. It plans to resume its Ozy Fest event series next year, he said.
“The bottom line is that we hit a bump in the road but are committed to getting past this moment and renewing our commitment to being the kind of media company that delivers amazing content about topics and people that are too often overlooked,” the Ozy Media spokesman said in a statement.
The company plans to resume its Ozy Fest event series next year.
Photo: Matthew Eisman/Getty Images for Ozy Media
The New York Times on Sept. 26 reported that Ozy Chief Operating Officer Samir Rao had impersonated an executive from Alphabet Inc.’s GOOG -2.31% YouTube on a February fundraising call with Goldman Sachs Group Inc. GS -1.56% In a statement last week, Mr. Watson attributed Mr. Rao’s behavior to a “mental health issue,” calling the incident “deeply unfortunate.”
Ozy Media’s board said last week it had hired the law firm Paul, Weiss, Rifkind, Wharton and Garrison LLP to “conduct a review of the company’s business activities.” That investigation is no longer ongoing, according to a person familiar with the matter.
Last week, Marc Lasry, an investor in Ozy and the co-owner of the Milwaukee Bucks National Basketball Association team, stepped down from Ozy’s board, and Katty Kay, a high-profile Ozy recruit who was a correspondent and anchor for the BBC, left the company.
Company employees lost access to their email accounts after Ozy Media said it was shutting down, according to another person familiar with the matter, and many employees still haven’t been contacted about potentially rejoining the company, the person said.
In an interview with CNBC on Monday, Mr. Watson said that he reached a decision to relaunch the company after speaking with advertisers, investors and employees, but didn’t name them.
Some advertisers and investors have taken steps to distance themselves from Ozy Media in the past week. The Wall Street Journal reported Thursday that many of Ozy Media’s major advertisers have paused their spending with the company.
A spokeswoman for Emerson Collective, one of Ozy Media’s early backers, said on Monday that the investment firm wasn’t involved in the discussions over the weekend about relaunching the company. Ozy investor Axel Springer wasn’t involved in those discussions either, according to a person familiar with the matter.
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