Ozy's Carlos Watson resigns from NPR corporate board after week of scandal

Carlos Watson resigned as a corporate director of NPR on Friday after the spectacular public meltdown of the digital media company that he leads and co-founded. The governance committee of NPR's corporate board had been set to meet later in the day to determine Watson's future with the public radio network.

In recent days, Watson and his company, Ozy, have been accused of misleading the public, advertisers and investors about the buzz-hungry outlet and its performance.

Watson, who was appointed to NPR's board in 2016, had just been reelected to a second three-year term, which had been set to begin next month. His resignation came Friday in a letter to the chairman of NPR's board, LaFontaine Oliver, who is the president of NPR Baltimore member station, WYPR.

"Earlier today, Carlos Watson submitted his resignation from the NPR Board of Directors. I have accepted his resignation on behalf of the Board. Mr. Watson's resignation is effective as of today," Oliver said in a statement.

Since an expose in The New York Times, Watson's claims of digital traffic at the millennial-focused outlet have come under withering view. The figures Watson and Ozy cited for the audiences of its website, newsletter and social media platforms now look improbable or artificially inflated.

In a memo to staff defending his actions and past claims, Watson called the Times story "salacious and profoundly inaccurate." In a tweet on Monday, he called it a "ridiculous hit job."

Claims of success wither under scrutiny

Watson repeatedly claimed a talk show he hosted was Amazon Prime's first. But it wasn't done in partnership with Amazon Prime at all, just uploaded to its platform. Ozy executives told television producers hired by the firm that they were working on a series to air on A&E Television Networks. They weren't. Watson told CNBC viewers that he had landed Ozzy and Sharon Osbourne as investors after a dispute over the use of the name Ozy. He hadn't. What appeared in promotional materials to be praise for Ozy and Watson from other news outlets such as the Los Angeles Times and Deadline turned out to be quotations of what Ozy had itself said.

And the site's claims of being "ahead of the curve" on identifying rising stars such as Democratic Rep. Alexandria Ocasio-Cortez of New York and Daily Show host Trevor Noah have unraveled as well.

Perhaps most strikingly, The New York Times alleged that Ozy's co-founder and chief operating officer, Samir Rao, impersonated a YouTube executive in a conference call with Goldman Sachs earlier this year as the firm prepared to make a $40 million investment into Ozy.

That YouTube executive, contacted by Goldman Sachs officials who became suspicious that they had heard a computer-altered voice, denied any knowledge of the meeting. In explanation, Watson said in a statement shared publicly that Rao had a mental breakdown and took a leave from the firm but returned.

Watson depicted the episode as showing Ozy's compassionate response to a colleague in pain. Rao has made no public comment to NPR or to other news outlets confirming his activities or his health. Google, which is YouTube's parent company, referred the matter to the FBI for possible investigation into whether there was criminal behavior, given the deceit in presentation to potential investors. Goldman Sachs never invested, but the firm has since drawn others to infuse money in a fresh round of investments. It is not clear whether the FBI has launched a formal investigation.

Investors and others quit on Ozy

Over the past four days, the Ozy board has commissioned its own investigation of the firm's business practices to be conducted by an outside law firm. Major investors have distanced themselves, including the German media giant Axel Springer, which owns Politico and Business Insider. The chairman of Ozy's board, the billionaire investor Marc Lasry, resigned on Thursday, saying in a statement shared with NPR that the company needed someone better suited to handling crisis. A top editor, former BBC anchor Katty Kay, was among Ozy journalists who also resigned.

Watson, a graduate of Harvard and Stanford Law School who had a brief stint at Goldman Sachs, is a charismatic figure. After dabbling in politics, he did some work on the air for MSNBC and CNN. He has declined to comment to NPR News this week, despite his position on the nonprofit network's corporate board.

In 2013, Watson and Rao launched Ozy, promising a millennial-driven, multi-platform media outlet that would puncture the chatter to find news that mattered to younger, more demographically diverse audiences. Ozy started with money from the billionaire philanthropist and investor Laurene Powell Jobs and continued to attract financial backers even as large audiences eluded him.

His appointment to the board followed a collaboration between NPR and Ozy. For the better part of a year, starting in the summer of 2013, Watson appeared regularly on Weekend All Things Considered and some of his site's articles were crossposted on NPR.org.

In his first appearance under this partnership, Watson invoked the inspiration for his company's name, the poem "Ozymandias," by Percy Bysshe Shelley.

"I've always interpreted it as, 'Think big but be humble,' lest you end up two vast and legless trunks, right?" Watson told then-NPR host Arun Rath. "Our ambition is to help people see more and be more, introduce them to the new and the next, but make sure that while they're thinking about those big ideas that they're a little bit humble about it."

Disclosure: This story was reported by NPR media correspondent David Folkenflik and edited by NPR media and technology editor Emily Kopp. Because of Watson's role on NPR's board, no senior news executive or corporate official at NPR reviewed this story before it was published.

Google is a financial supporter of NPR.

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