Ozy Media’s Carlos Watson Addresses The Company’s Downfall

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Ozy Media’s Carlos Watson Addresses The Company’s Downfall
Image source: CNBC Video Screenshot

Following is the unofficial transcript of a CNBC interview with Ozy Media Co-Founder Carlos Watson on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Monday, October 4th.  Following are links to video on CNBC.com:

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Ozy Media’s Watson On Path Forward: We’re Going To Have To Change Substantially

Ozy Media’s Watson Addresses Numerous Scandals Leading To Company’s Downfall

ANDREW ROSS SORKIN: Welcome back to “Squawk Box.” Our next guest is here to give us a first-person account of the dramatic rise and fall of Ozy, a roughly 8-year old new media company that collapsed last week following reporting The New York Times about a series of allegedly misleading statements and actions. We’ve been talking about it all week, Ozy Media Co-Founder Carlos Watson is here with us on the set. Carlos, good morning to you.

CARLOS WATSON: Morning.

SORKIN: We have so many questions that have been unanswered and I’m hoping you can help us with. The first though—

WATSON: Do you mind if I start at the top though?

SORKIN: Well I think what you’re about to say because we just heard that, and we talked about it as a collapse. On Friday, the company said effectively they’re, it was going out of business.

WATSON: Said we’re going to suspend operations and begin an orderly wind down but over the weekend, good conversations with investors, with advertisers. I was warmly surprised to hear from a number of folks readers, viewers, others, and as embarrassing sometimes as it may feel to do, I realized that we were premature. I realized we have something special here. I think that there’s a really good opportunity and part of what last week showed me is not only that we have lots of things that we have to do to improve. We do and I know we’re going to talk about some of those today. But I very genuinely feel like we have a meaningful important voice in what is maybe the most transformative decade and a half century, and I want Ozy to be around and be a part of it. I want people to read our newsletters. I want them to watch our TV shows. I want them to enjoy our podcast. I want them to come to our live events. I think all of that matters.

SORKIN: Okay for them to do that, if that’s going to be the case, they’re gonna have to trust you and they’re gonna have to trust the Ozy brand.

WATSON: Right.

SORKIN: So, let’s talk about that trust because I think there’s, there were so many questions raised by the reporting that that was in the New York Times last week plus lots of other reporting in other places. And let’s just say this, lots of Ozy was real. I just wanna say that out loud, which is to say, the newsletters exist, the festival exists, the advertising exists. You’ve won an Emmy, that exists. But I think there’s other questions about whether the numbers were inflated. We heard about this phone call between your co-founder and Goldman Sachs apparently impersonating somebody from YouTube. We’ve talked about the advertising that suggested that said one thing, but the quotes necessarily, didn’t necessarily come from where they said they were coming from. I think we need to just try to the extent that you can clear the error, explain it—

WATSON: Sure.

SORKIN: Let’s do that. Let’s start with this phone call though because that’s what sort of set this whole thing off. Your co-founder had a phone call with Goldman Sachs as you were trying to raise money and effectively took them off of a Zoom, and then apparently started to impersonate within it with a fake email address as well, somebody from YouTube. What happened?

WATSON: I don’t know. I wasn’t there. But I do know that I got a call from the YouTube folks after it saying something strange had happened, and we figured out what happened. I immediately called back to the folks at Goldman, right away, not four days later as I think someone wrote at one point and, and look, it’s heartbreaking, it’s wrong, it’s not good, it’s not okay. I love Goldman, I worked there, I’ve got a lot of friends there, you know, to this day several months afterwards. I’m grateful to them that, you know, we’ve formed a new advertising partnership and so, you know, hopefully there was some sense of trust regained, but there’s no doubt about it that that was not okay and that fractured a lot of trust not just there, but obviously, you saw what happened in a very tumultuous week last week,

SORKIN: But part of what was happening in that instance from what I understand is, you had represented, and the company had represented at one point that your show was going to appear originally on A&E, by the way represented to me because I appeared on your show, and when I first got that email from the producer, it said this show was on going to be on A&E with 95 million households and I remember sitting down actually when I was about to do your show and I said to the producer in the, in the ear I said, “By the way, when does this air?” Thinking it’s going to air on A&E and she said something like, “We, you know, we’re really leaning in hard to online media, this is actually a YouTube Original.” But what it now appears like is it actually wasn’t a YouTube Original either. And in fact, that was somewhat of what the discussion or the issue was with Goldman Sachs, that you were uploading these videos to YouTube, but a YouTube Original is something where you say they’ve effectively commissioned the program.

WATSON: So lots of miscommunication in that but I want to clarify that one because I think that that was definitely one where we lost a lot of trust. We originally conceived the show with A&E, you’ve seen the announcements that we have, have a partnership with them or a multi-year partnership. You know we’ve done shows on A&E, on their sister network History Channel, on Lifetime Channel, did good things. And originally during the summer, the conversation was with them. We created a sizzle reel together. We talked about which guests and things like that. And as the summer moved on, we realized that they were on a different timetable than we were and so, we shifted to YouTube. Now in the back of our mind we thought there still could be an opportunity for us to come back to them, but we clearly shifted to YouTube. I know that for you and for a number of other people, you got emails on that. That was wrong. I don’t know whether that was a mistake or whether that was intentional but whatever it is, that was wrong.

SORKIN: But the executive producer that you hired believed that he was making a show for A&E and in fact, suggested on the record in the New York Times this week, or last week, that the show, every time he was told that he wanted to call someone at A&E, he was told effectively not to.

WATSON: You know, I don’t know about that but I have to say this, I made a really bad decision last week and I didn’t respond to your text. I didn’t respond to texts lots of other people I know and I wish I had engaged with the media, had good conversations because I felt like after that piece, it was kind of like open season for people to throw whatever crazy half-truth and put it out there. Now, to be really clear, some of the things that came out last week were mistakes that we made, I know that we’ll talk about those too, but that’s a good example of one that I think that’s true. That same producer you’re talking about is the same producer who’s texted me multiple times since then with multiple exclamation points saying congratulations on the show bringing Matt Damon on, congratulations on the show now appearing on Amazon Prime. So, look, there’s no doubt about it that last summer, as the show started, we originally hoped that we were going to do with A&E and it ended up shifting to YouTube and, and, and I am sure that we did not communicate that well and I own that and that’s—

SORKIN: But you use the word half-truths. I think there’s more than a half-truth or, or a half-lie in that which is the producer actually said to you specifically that you were lying to the staff about the fact that this show was supposed to be on A&E and then apparently lied again when you said it was gonna be a YouTube Original.

WATSON: I disagree. I don’t think that’s true. So, both pieces of what you’re saying, which is the idea that he said to me that I was lying—

SORKIN: Right.

WATSON: And number two that I then said to the staff that it was YouTube Original, right. Clearly it wasn’t a YouTube Original and knowing what a YouTube Original was, it clearly wasn’t that. And let me—

SORKIN: But why did they believe that it was a YouTube Original? Why were they telling me by the way that it was YouTube Original?

WATSON: I hope that it was only a mix up of words, right. I hope that’s all it was. It may not have been but I hope there was only a mix up of words. But Andrew, what I don’t want to have obscured is that we didn’t do one or two episodes of the show, we’ve done 200 episodes and when Scarlett Johansson has come on, when Dr. Fauci has come on, when H.E.R. has come on, when Mark Cuban has come on, when Malcolm Gladwell has come on.

SORKIN: But no one is—

WATSON: Hold on one second. They come on knowing that they’re coming on a terrific YouTube show that has a chance to reach a really dynamic audience.

SORKIN: Nobody’s disputing the quality of the program but by the way you just mentioned this being on Amazon Prime which became another issue is that you advertised it was the first show, first talk show on Amazon Prime. You were uploading that show to Amazon Prime. I remember seeing that ad for the first time thinking wow good for Carlos, Amazon Prime has commissioned him. That’s amazing. And then I found out when I read the story, that in fact you were just simply uploading it like anybody could.

WATSON: It’s not. No, no, no, timeout guys and again, thank you for this time. I know we are going to spend a lot of time, Joe, do you mind if I hit this first and then come to you?

JOE KERNEN: I’m just seeing like a pattern and I’m just wondering who is in charge that decided—

WATSON: You know what? Let me, let me answer that and let me come back there because that also ties to the question of regaining trust and there’s a larger question, that’s totally legitimate question. So, to be really clear, getting on Amazon Prime, not everyone can upload it. That’s a very rare thing and this suggestion in one of the articles is just like any random yahoo can do that. You can’t do that, you should talk to the folks at Amazon and not believe some of the, you know, not very good reporting about that so it is a big deal. Number two, our understanding from them is that we were the only talk show and part of what was special about that is that they hadn’t done it otherwise and they weren’t in a place yet where they were willing to put their own money, but what they were willing to do in terms of a large upfront payment, but what they were willing to do and what they do for a few people is allow you to be part of Amazon Prime where you take risk and they take risk and the more views you have, the more you get paid.

SORKIN: But to put a fine point on it.

WATSON: Hold on. Hold on.

SORKIN: They then asked you to stop advertising this point.

WATSON: Well, but they asked to stop everything because what they said to us and what they said to me is because we are not convinced that we’re definitely gonna get in the talk show business and if you advertise it like that, you’re gonna have lots of other people, their agents and everyone calling, so they didn’t say take it down because it’s not true, they said take it down because we don’t want you stimulating more pitches for us in a space that we haven’t committed to yet. Let’s see how you do. If you do well with the interesting guests you have, whether it’s a Priyanka Chopra, whether it’s a Mark Cuban, a Lloyd Blankfein, whomever, then great and we’ll see where we go from there. So, please with all of these things let’s have the conversation, right, because we definitively made some mistakes and Joe I know we want to have a larger conversation about whether mistakes were ingrained in who we are or whether, like a lot of young companies, we made mistakes but that was the 20% not the 80% of who we are, but let’s go through all of these because I think that’s a super important point. We are on Amazon Prime, it’s a very difficult place to get. There are only two ways to get in there, you can either get a meaningful upfront payment and they drive it or for a few people, they say you’re special enough and if you want to take risk, and we’ll take risk, we’ll do that together and we bet on ourselves and we did it and our understanding and talking to them is that we were the only talk show and their hesitation about having it out there was not that it wasn’t true but that they didn’t want to stimulate more demand and so I want to clear that up and I think that’s important.

SORKIN: Okay, Becky’s got a question for you.

BECKY QUICK: Carlos, really quickly, back to the issue of—

WATSON: Becky, I apologize, I’m not hearing you yet.

QUICK: Oh sorry, maybe they can turn on the microphone. Can you hear me now?

SORKIN: Can you hear her?

WATSON: I don’t hear her yet.

QUICK: Okay, maybe it’s not back. Joe’s got a question, why don’t you let him ask.

KERNEN: Mine, I’m just wondering, the, the aggressive marketing that caused sort of to oversell and you could call it aggressive or someone was downright just this falsehoods about where, you know, you buy some advertising somewhere and then the entity suddenly the LA Times is saying — who was that, who because it happened again and again, again, do you have a head of marketing or—

WATSON: But let me start with a macro place Joe and I’m saying this in order to address this and address it comprehensively because it’s important.

KERNEN: Right.

WATSON: Again, as you said before and as you know because I’ve been here with you before. We have a real business. We have real newsletters that millions of people get. We have real TV shows that people watch, we’ve won an Emmy. We have real podcasts that have been in the top 10 on Apple. We have real festivals that people come to. We have tried to market these very different franchises, about 25 in all, we’ve tried very hard to market them well. I would tell you that one of the mistakes we made is that sometimes we were too aggressive in marketing them unequivocally and I own that, not anyone else, I own that. That’s my mistake. I’m the CEO, I’m responsible that we tried our best. Now, do, if you’re asking me do I think that we got it wrong 50% of the time or 80% of time? No. If you ask me do I think we got it wrong 20% of the time? Yeah, we probably did and that’s on me and I own that and one of the things I hope will be true of that going forward is we’ll be much better about that, much crisper about that.

KERNEN: So, 80% of the marketing was, was true, I don’t think that’s true.

WATSON: Why do you not think it’s true?

KERNEN: I just heard of some of the best—

WATSON: Look, it was an incredibly salacious week and I do think at some point I hope you will invite me back to talk about the state of journalism, and I want to talk to Andrew and Becky about that too. I thought last week there was, there was not only real critique and there was, and make no mistake about it, I own the things that we need to do better on data, the things we need to do better on marketing, the things we need to do better on leadership and culture. I clearly own that and clearly have thoughts about where we can go from there. But in addition to that, I thought there was a wild piling on that was inappropriate, and that left you, and a lot of other people saying, is this everything about Ozy? Even Andrew, Andrew I look back, you sent me a text after you were on my show and you said, I’ve never had so many people tell me that they were watching the show, where did you get that magic from. You remember sending me that text?

SORKIN: I remember looking at the, I think what I said to you, I think was—

WATSON: No, no, no, I—

SORKIN: You can get it because I remember being amazed by how many people were watching it on YouTube.

WATSON: You told me in the text, you said and I’m happy to bring it.

SORKIN: You can.

WATSON: You said on the text to me and I’ll read it here to you if you like. You said to me—

SORKIN: I was amazed how many people were watching it.

WATSON: You said to me quote on August 29th at 7:54pm, “You have a big audience on YouTube, I keep hearing from various people who say they saw it.” I keep hearing from various people saying that they saw it. “I’d love to talk to you.”

SORKIN: Right.

WATSON: So that’s what you said, keep hearing from people. So, look, I just, I need you guys to be fair about this and thoughtful about this and not just go with this kind of one way digital mob.

SORKIN: I know and Becky’s got a question but I want to ask you one other, which relates to the newsletter franchise, one of the things you’ve talked about is having 26 million people getting this newsletter. And I don’t disbelieve that you have 26 million addresses in your database. You can buy some of those, you can do some of that organically. But I also saw an investment deck that you had.

WATSON: You can partner.

SORKIN: Right, you can partner.

WATSON: And I’ve partnered before on newsletter efforts with The New York Times.

SORKIN: But I did see, I saw an investment deck that said you had a 25% open rate on those 26 million newsletters, subscribers. That is a very high open rate for what I don’t believe is a fully organic list. Can you, can you speak to that? Was it really, do you really have a 25% open rate on 26 million newsletters?

WATSON: We do not. But, but I hope what it said and I don’t know which deck you’re referring to, I hope what it said is that for our best most regular people that it was 25%. So, of that 26 million, that 10 to 12 million who were the most regular, I hope what it said is that we have a 25% open rate, I hope that’s what it said.

SORKIN: This was a deck for your, for your Series D, which brings me to another question. The investors who invested after this now infamous call between your executive and Goldman Sachs. Were they made aware of the call and the questions that have been raised that we’re now talking about today?

WATSON: You know what, because you know that that is fraught and there are a lot of questions, I’m not going to go into that but I will say this and I think this is really important and when we talk about investments you know this with private companies, when you invest in a private company, you don’t just have one conversation or there’s not one data point. You and I both know that it can be a three to 12-month process. You and I both know that you often, if you’re the potential investor, you often have dozens of conversations both ones at the company sets up but also ones that you do yourself and that there are lots of data points and you go through that and you sync it all through and I’m confident that all of our investors and I’m confident that they talk to customers. I’m confident they talk to members of our team. I’m confident that they talk to other competitors. I’m confident that they consumed our newsletters and our TV shows and our podcasts, and many of them would come in the earlier days to our festivals as well so I want to say that because I know we keep having this conversation—

QUICK: Hey Carlos. Just on that point though—

WATSON: As though—

QUICK: On that, on that point—

WATSON: Becky, sorry, Becky can I just say one more thing—

QUICK: But on that point, I just want to clarify what the point that you’re making right now. We know that the situation the conversation with Samir Rao, that that was a situation that you say where it was a mental break. Was there, were there any other occasions where investors were given misleading information in any of these conversations that you’re talking about right now or was that a one-off event?

WATSON: Becky, I hope and I hope and I believe that that was a one-off event. I mean it’s a tragic event, it’s a horrific event, it’s a wrong event. And, and so I hope and trust that that was a that was a one-off. And so, but let me say something else because I think, again, this is important and it started at the beginning of the conversation Andrew. Like, I think it’s completely inappropriate and not thoughtful these kind of comparisons to Theranos. You and I both know that Theranos didn’t have a real product. And again, you’ve been on my TV shows. You’ve seen the Emmy that we won. You’ve received our newsletters at least heard of so—

SORKIN: No, no, I—

WATSON: So I want to make sure that we have like a grounded, thoughtful conversation and so investors who were thinking about us, considering us, getting to know us by the way, we’re also investing in other companies who were investing in Reese Witherspoon’s Hello Sunshine, they were investing in Business Insider, they were investing in, in the Atlantic and all sorts of other companies and so these are people who aren’t just sophisticated investors but often investors who know the media space, maybe even better than I do.

SORKIN: The point that Ben Smith made in today’s column was though, that it was a group think. It was everybody trying to be part of a club and that they actually didn’t do their diligence at all.

WATSON: Yeah, so let’s, what I’d say is that I think Ben Smith should never have had a chance to write this piece. I’ve shared with a number of people before that two years ago in August of 2019, Ben Smith sent an email to me and his then CEO Jonah Peretti said I think you guys should get together for the purposes of talking about them buying me. We spent three months in conversation. They had me meet all of their top leaders, folks in marketing, folks in finance, folks in analytics, they went through our numbers backwards and forwards, they put together a joint presentation, and they made us after the end of that, in November, right before Thanksgiving, spending all that time doing diligence, Joe they made us an offer of nearly a quarter of a billion dollars for a company that Ben Smith now sets up as though it’s a house of cards and it was just group think. How is that possible that Ben Smith who’s been in new media for that many years, kicked off a process, followed up with me and they ended up making an offer for nearly a quarter of a billion dollars, $225 million, for something that they now say was group think and it was made up. And when we said no to him once and said no to him twice, two weeks later he quit, went to the Times and his first column in March of 2020 was, I guess, new media can’t work, I guess I’ve got to join the Times. Just because it didn’t work for him, not okay for him now to take a potshot at us and did he tell his editor that he was conflicted when he was writing about us. Did he tell his editor that he still owns lots of stock in Buzzfeed and that he tried to buy us? He didn’t. I don’t think that’s okay. I don’t think that’s okay, I don’t think he should have been able to write that piece and write the other pieces and create this false narrative that because Ozy doesn’t look like something he wants it to be and because we said no to him multiple times—

SORKIN: But clearly you’re acknowledging that there are things that you, you and the company have done that are misleading. That were fair game for, for a journalist to write about.

WATSON: 100% that we should have done better. Three of the areas and there may be more than three, but we definitely should have been better with data because so many of the data tools, only look at digital only, and we’re not a digital media company. I call us a modern media company because we’ve got TV shows, newsletters, podcasts and festivals. So we should have figured out that multi-platform data, we should have been better on the marketing. Joe, we got it wrong, it’s not okay what we did, it’s not, but I don’t think it was 80% of the time, I think it was probably more like 20% of the time and I would tell you that there’s some things around leadership and culture that I need to be better at and we need to be at.

QUICK: Carlos, can I just, can I just clarify on that point? The things that you say you own because you were the leader you own it because people under you were doing things you didn’t know about or people under you were doing things that you did know about?

WATSON: Becky, that’s such a broad question and, you know, that’s such a broad question.

QUICK: No, I’m trying to be specific. It’s right for a leader to say it happened on my watch, it’s my fault. But is it your fault because you didn’t know or your fault because you did—

WATSON: Fair. Let me give you a couple. So one on the data, I should have figured out a third party group that could have done, not just digital like Comscore does because Comscore only looks at website traffic or mainly looks at website traffic, but even though it was hard I should have figured out a solution as I now have and we have a third party that has done a preliminary look and hopefully they’ll finish up in the next couple of weeks and we will share it broadly with people and going forward, every month, we will share our data. We’ve got nothing to hide, we’ve got good things there. And so yes, I own that I didn’t make sure that that happened. And I knew that that was critical to us and we did the best we could. We did it piecemeal, but I should have had someone external as an example do it, do it consistently and share it with people in an easy consumable way.

QUICK: But I’m sorry when we’re talking about made up marketing numbers, did you know that was happening or not?

WATSON: I don’t believe we had made up marketing numbers, Becky. I don’t believe we had made up marketing numbers, and so I’ve heard people say that repeatedly but what it is, in my mind, is it’s Ben Smith and people like him who only believe that what happens on Twitter and websites matter and discount newsletters and discount podcasts and discount TV shows and discount festivals, and so their belief is, if you’re not doing that, if you’re not active on Twitter and doing snarky things on Twitter, then you don’t have a real media company and I, I constitutionally reject that. In fact, a big part of the reason why we’re going to continue going forward is because I don’t think it’s a good world where the only kind of media companies you have or the kind of media companies that get Ben Smith excited, what about the rest of us.

SORKIN: I just want to say because I asked you about the email opens before and I’m looking at the deck, I’ll show it to you right here. 25% email opens. Ozy email average 25% open rate, 2.5 times industry and 3% CTR. It doesn’t have a star next to it that says just the people who are actively engaged with you in some way, and—

WATSON: You know, I need to look at that more closely but let’s make sure that we do something here, which is that I don’t want, if you and I looked at any small company—

SORKIN: Right.

WATSON: Or a large company, we would find a handful of things that aren’t great. Just to be really clear, we would, we would find and just because something is sloppy or stupid, doesn’t mean it’s illegal, right. I just want to be really clear about that—

SORKIN: Look I’m not, I recognize mistakes can be made, I think the question is whether there’s a pattern and series of mistakes and I think that is the, the larger issue. I’ll raise another one with you, Sharon Osborne, you made a comment on this program, by the way, saying that she was a friend and investor in the company.

WATSON: I didn’t say she was a friend.

SORKIN: I think we can probably go back and get the tape.

WATSON: You know what, play the tape then. Please, go ahead, play the tape.

SORKIN: I don’t know if we have the tape—

WATSON: You know what, cue up the tape. This is an Obama Romney moment. Cue up the tape. Show me the tape.

SORKIN: As we wait for the tape if we can get it.

WATSON: So here’s, here’s what I said and here’s what is true. We have a wonderful music and ideas festival that I’ve invited you to many times. Becky you were going to come, as you recall, and you were going to do something. We had a conversation about that you couldn’t do it, we went back and forth with folks to try and see if we could get you to be a moderator of one of the things—

QUICK: Yeah, it was something I couldn’t do.

WATSON: It’s called OZY Fest and Sharon Osborne and the folks said that that was too close to the name of something they did called Ozzfest. They ended up suing us. We went back and forth and the final resolution was that they would get stock in our company, they would ultimately get about 50,000 shares. And so, I think on this show and maybe a couple of others, in my mind people who own shares in our company, are investors—

SORKIN: But you do recognize an investor—

WATSON: Hang on, hang on. Hey can I finish?

SORKIN: You tell somebody that they’re an investor, they typically do that proactively and you didn’t say by the way, they happened to get shares instead of cash.

WATSON: Andrew.

SORKIN: I mean there’s a difference. There’s a difference.

WATSON: Andrew, no doubt that there’s a difference but also if you put the blink test on this, the Malcolm level blink test, do you think I’m really saying to serious investors invest because Sharon Osborne? Like do you really think that’s like a calling card, like seriously, is that a calling card like just the blink test here. You really think that’s what I was doing or do you think you and I were having a light moment and we were making a joke and I said that, like play the tape. I’m sure it’s a light moment and there’s no one I’m going to say, hey, you know why you should invest because Sharon Osborne is in Ozy. I’m not gonna say that we were probably having a light moment I hope you’ll play the tape.

SORKIN: What do you say to people, and I want to go back if we could to this though, you’re going to try to continue this company and, and keep going.

WATSON: And it will be tough and it will be tough, as you said we will to, Joe, we will have to regain trust.

SORKIN: The investors apparently have left the company. I mean Ron Conway effectively said I’m giving back the shares.

WATSON: And again, I need you, Andrew, as sophisticated as you are about this stuff, like, you know, that we’ve raised millions of dollars of capital and Ron Conway put in $50,000. And so for you to keep banding about Ron Conway—

SORKIN: It’s the first time I’m mentioning his name.

WATSON: Hey, hey, today, right. But you mentioned it before last week so for you to keep banding that about like that’s a substantive big decision, like that’s not accurate and that’s what I meant before Joe about these things that are misleading. So, I’m sorry to see them go. He’s a terrific investor.

SORKIN: But why do they, why do they abandon the company if things are as, as good as you say they are. Marc Lasry, by the way, defended you initially said that he thought that this mental health issue was real, said that it was dealt with appropriately. You know, 72 hours later, he’s gone. Why? Tell us about that conversation then.

WATSON: Can’t, can’t speak to that except to say it’s heartbreaking. I am a big fan of Marc’s. I’ve been lucky to get a chance to work with him. He was great as an investor, as a board member, as a chairman. He joined me here on this show, as you know, I think more than once. He helped me with a number of our key business development efforts and so he was great and I’m, I, you know I don’t want to put words in his mouth, but I’m sure he and I both wish last week hadn’t happened. I think we both felt like Ozy had had some incredible momentum this year, which is part of the reason why he became chairman. I think we both hoped that a lot more will happen but part of my opportunity going forward is to make sure that we build back stronger, that we create something that he and others can be proud of and, you know, Joe, you probably remember Tylenol situation, years ago, right. And that was a moment of leadership, that was a moment when it looked like an important company was going to go away.

KERNEN: Timber.

WATSON: You remember that?

KERNEN: I remember it well.

WATSON: And so, you know, look at our best and we, we may not get there, right, this is gonna be hard but at our best, this will be our Lazarus moment, right, at our best, and we may or may not see—

SORKIN: So, tell us, what do you think you need to do at this point. By the way, you’re gonna have to get, I assume, maybe more, more investors though I know you have some cash still on hand, you’re gonna have to bring back the advertising community to ultimately support this and then readers and the public.

WATSON: And so I think the first thing I have to do is think about my team.

SORKIN: How are they gonna stay with you by the way?

WATSON: You know what? That that’s a good question. That’s a good question.

SORKIN: Have you talked to them?

WATSON: I’ve talked to some of them. Obviously this has all happened very quickly. It’s a terrific team, they were as traumatized last week as I was as heartbroken as I was. I mean, whenever you want to say, you and I both know that when you ever you met people from Ozy, they loved Ozy. They weren’t kind of going through the motions, it wasn’t just like they loved Ozy, right, and so and so—

SORKIN: But by the way, there were a number of reports last week from at least ex-employees who clearly didn’t love Ozy.

WATSON: Fair enough. Of the, of the nearly thousand people we’ve hired over the last decade, part time and full time from freelance reporters to software engineers to people doing our festivals, crews on our TV shows and other folks, we did have people. And people ran with stories from for example one gentleman who we fired for lying multiple times but they set him up and allowed his quote Potemkin village or things like that to run wild as though he was a credible source, I don’t think that’s okay. Right. And so, I’m happy to have conversations about that and I’m happy to walk through that. But here’s the bottom line when you ask me what I need to do next, got to make sure that our team is in a good place and that’s not going to be easy and you and I both know that, have to make sure that we regain the trust of investors that’s not going to be easy either, have to make sure that we deliver really premium products. So at the end of the day, if we don’t have a newsletter that people want to read, if we don’t have TV shows that people want to watch, we don’t podcasts that people put on their headsets and go for a safe swim like we don’t have anything. If we don’t have an OZY Fest, that you can come to we don’t have anything so that’s going to be important. And the last thing I would say that’s going to ultimately be really important is we have to change. We have to change substantially on data, on leadership and culture, on marketing.

SORKIN: Carlos Watson, we very much appreciate you being here.

WATSON: You know what I wish I’d come last week—

SORKIN: But one thing I can tell you is that I do wish you luck, I really do.

WATSON: Thank you. Thank you. I hope I get a chance to come back.

SORKIN: Thank you, Carlos.

KERNEN: Thank you.

WATSON: Thank you Joe. Thank you Becky.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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