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Illustration: Aïda Amer/Axios

Good people quit good jobs to join Ozy Media. They believed in its mission, its leadership and its potential for wealth creation. Investors cut big checks in good faith. They were all betrayed.

The big picture: A horde of sources described a pattern of bad behavior, well beyond the failed fraud that was first reported Sunday by the N.Y. Times.

What happened yesterday: Do you have a minute?

Marc Lasry stepped down from Ozy Media's board, saying: "I believe that going forward Ozy requires experience in areas like crisis management and investigations, where I do not have particular expertise."

  • This is just weeks after Lasry became chairman, and just days after initially saying that an investigation wasn't needed.
  • Axios learned that Lasry only invested $1 million of his own money in what we were told was a $35 million Series C round in 2019. At the time, CEO Carlos Watson referred to Lasry as that round's lead investor.

Watson in 2019 also told CNBC that Sharon and Ozzy Osborne had invested in his company. Sharon now says that never happened, adding: "This guy is the biggest shyster I have ever seen in my life."

Stories published Thursday by Bloomberg and CNN portray Watson as an erratic leader who used unprofessional practices to micromanage his staff. Oh, and some advertisers are fleeing.

But wait, there's more, per new reporting by Axios:

  • Just months after that $35 million funding round (for which there is no SEC filing), Ozy implemented 19% pay cuts, citing the pandemic, per multiple sources, although the specific percentage could vary based on pay level.
  • The company quietly laid off around 20% of its staff in early 2020, per multiple sources.
  • Eugene Robinson, Ozy's editor-at-large and one of its original hires, says he was fired for posting a story on his personal Substack, even though he had approval to do so from a senior editor (as verified via a screenshot shared with Axios). Watson allegedly told Robinson: "You were wrong for doing it and they were wrong for telling you to do it."
  • Robinson says he's free to speak with reporters because his severance negotiations, which would have included an NDA, broke down after Ozy insisted he remove a negative Glassdoor review that the company believed he had posted (Robinson denies it's his).
  • Other ex-employees tell Axios that management encouraged them to write positive Glassdoor reviews.
  • German publisher Axel Springer, an early Ozy investor, tells Axios that it gave up its right to a board seat and voting rights after only investing $300,000 in the Series C round. But Ozy continued to list Axel Springer's rep as an active director in a July 2021 filing with the state of Florida.
  • Several sources note Watson's penchant for Sunday meetings, and say he often strung employees for hours on Sunday. Some say Watson made it very hard to leave the company, and would continue to call after their departures.
  • People can be prone to badmouthing their ex-employers, but what we're getting here is a consistent story.
  • Axios reached out to a current member of Ozy's accounting department for clarification on revenue numbers that the company originally shared with us, but she hung up.

The bottom line: All we know for sure about Ozy is that there's bad news to come.

Go deeper: Ozy loses an early investor

Go deeper

Dan Primack, author of Pro Rata
Oct 5, 2021 - Economy & Business

Ozy Media investor sues the company for fraud

Illustration: Rae Cook/Axios

Ozy Media is being sued by one of its investors for fraud after a whirlwind week in which the digital media company announced both that it was shutting down and then opening back up.

Driving the news: Lifeline Legacy Holdings, a Beverly Hills-based group, claims that Ozy misrepresented its business performance and interest from other investors, according to a lawsuit filed yesterday in California.

Updated 8 hours ago - World

U.S. airstrike kills senior al-Qaeda leader in Syria, DOD says

A displacement camp near the village of Qah in Syria's northwestern Idlib province. Photo: Ahmad Al-Atrash/AFP via Getty Images

A U.S. airstrike in northwest Syria on Friday killed senior al-Qaeda leader Abdul Hamid al-Matar, U.S. Central Command said in a statement.

Why it matters: Syria serves as a "safe haven" for the extremist group to plan external operations, according to U.S. Army Maj. John Rigsbee.

Updated 13 hours ago - Politics & Policy

Giuliani associate Lev Parnas convicted of campaign finance crimes

Lev Parnas, a former associate of then-President Donald Trump’s personal lawyer Rudy Giuliani. Photo: Stefani Reynolds/Bloomberg via Getty Images

Florida businessman Lev Parnas was convicted Friday on charges of conspiracy to make foreign contributions to political campaigns, according to multiple outlets.

Why it matters: Prosecutors said Parnas, then an associate of former President Donald Trump's personal lawyer Rudy Giuliani, funneled over $150,000 from a Russian businessman into U.S. campaigns as part of an effort to land licenses in the U.S.'s legal cannabis industry.