- OG Media, which has come under fire following multiple reports of questionable business practices detailed at the company, took out two separate PPP loans for a total of $5.7 million.
- The bulk of the money was earmarked for payroll, but former employees say they’re not sure where the money went.
- One former employee said, “It was disappointing. You work so hard and give your life to this company, to be dismissed and humiliated.”
Several former Ozzy Media employees say there is no evidence that the millions of dollars the company received through a federal COVID relief program to protect paychecks ever went to job saving or salary increases.
Ozzy, which has come under scrutiny after multiple reports detailing questionable business strategy, applied for two loans through a program called the Paycheck Protection Program, or PPP. According to the Small Business Administration website.
Ozzie’s first loan, for $3.75 million, was approved in April 2020, a month after the US government passed a $2 trillion coronavirus relief bill. The company was approved in February 2021 for another $2 million.
It is not clear how OG used the PPP funds. Ozzie Media’s CEO and co-founder, Carlos Watson, did not return multiple emails with specific questions about how the company used the money or who decided how the money would be used. Nor did he answer the question of why Ozzy applied for another loan. The company claimed Earned $50 million in revenue in 2020. It laid off many employees and took pay cuts earlier that year.
Ozzy announced it was closing its doors last week after a series of reports cast doubt on the company’s business practices. the new York Times An event detailed from February — the same month OG received its second PPP loan — where co-founder and chief operating officer Samir Rao impersonated a YouTube executive on a conference call with Goldman Sachs in hopes of securing a $40 million investment.
During an interview on the syndicated radio program “The Breakfast Club” on Tuesday, Watson said on Tuesday that he has asked Rao to step down, in spite of claiming this incident”mental health problem“
whereas it was not unusual For media companies to participate in PPP, OG specifically earmarked their loans for payroll. Full-time employees working for Ozzy told Businesshala they didn’t know where the money went and that it didn’t go to reinstate their pay after the pay cut.
According to a former employee who left OG earlier this year, “There are none to my knowledge, and I have been talking to at least 10 people. After receiving these PPP loans, no one will be given a salary as Didn’t find anything.”
“I must have followed up with Samiro [Rao] Four to six times,” said another regarding the reinstatement of pay. “It was disappointing. You work so hard and give your life to this company, to be dismissed and humiliated.”
Former Ozy employees who spoke to Businesshala worked in various departments of the company. He spoke on condition of anonymity to discuss personal matters and to avoid reprisals.
Watson Told Axios in January 2021 — a month before taking out the second PPP loan — that his company was profitable for the first time in 2020 after taking in $50 million in revenue. the new York Times First reported Ozy has increased its traffic numbers And it has a history of exaggerating its success. Watson told Businesshala earlier this week that OG over-marketed itself about 20% of the time.
“It’s on me, and I own it,” Watson said Monday.
Axios was the first to mention that Ozy kept About 20% of its workforce at the beginning of 2020. The news outlet also reported that Ozzy implemented a pay cut of about 19%. According to two people familiar with the matter, Businesshala has since learned that some employees took even bigger cuts, with one person taking a pay cut of up to 35%.
Watson announced Monday that Ozzy was planning to keep its doors open, just days after it told employees the company would be shutting down. Also on Monday, Lifeline Legacy Holdings, which claims to have invested $2 million in Ozzy Media, case filed against the company, alleging “fraudulent, deceptive and illegal conduct”.
Luck reported on Wednesday Watson has contacted the staff asking them to return to Ozzy.
The PPP, launched under the administration of then-President Donald Trump, generated nearly $800 billion in forgivable loans for small businesses that were struggling as the pandemic raged.
The SBA website says that Ozy’s PPP loans, which were officially disbursed by Silicon Valley Bank, are ongoing and each has “not yet been fully repaid or forgiven.” For his first loan, Ozy identified his industry as “custom computer programming services”, According to the SBA site. For a second loan, Ozzie’s industry has been described as an “Internet publishing and broadcasting and web search portal”.
OG claimed that the majority of the loan amount would be used for payroll, and that the money helped the company retain 143 jobs, according to February 2021 loan document. Watson said in an interview with “The Breakfast Club” on Tuesday that Ozzy had “over 75” full-time employees before Friday’s shutdown.
Watson also said in that interview that he hasn’t taken a salary since the start of the pandemic to hire more people at his company.
Representatives for Ozzy and Watson did not return requests for comment. Representatives for Silicon Valley Bank referred questions about the loan to Ozzy and declined to comment further. David Fockenflick of National Public Radio tweeted On Wednesday, Watson’s new spokesman, Phil Singer, resigned after working just four days.
Watson has spoken to multiple outlets, including Businesshala’s “Squawk Box,” after Ozzy’s board told employees that the company would be shutting down, but did not respond to multiple requests for comment on the article. Businesshala also sent a detailed list of questions to Watson, who did not return a request for comment prior to publication.
An SBA spokesperson did not comment on the loans given to Ozy, but did provide an explanation of how such loans were granted.
“PPP is a delegated lending process where participating lenders act as agents of the government and approve loans,” Shannon Giles, a spokeswoman for the SBA, told Businesshala in an email on Tuesday. “A participating lender submits a PPP loan application, which it has already approved to the SBA for federal guarantees. The SBA does not have details on PPP loan disbursement. It is a third-party relationship between the lender and borrower. Every PPP-participating lender has to implement the program to its borrowers within the rules and program guidelines given by Congress.”
The 2020 loan comes a year after Ozzie Media hosted its annual Ozzie Fest in New York on the Great Lawn of Central Park. although it was eventually Canceled because of the heat that summer, The New York Times reported that the top selling tickets for the event were at $400. The festival was set for music by John Legend, food by celebrity chefs including Rachel Ray, and comedy by “Daily Show” host Trevor Noah.
Businesshala’s Andrew Ross Sorkin asked Watson directly in 2019 how much the company had to pay New York City to host the extravaganza.
“You just say I’m with Andrew Ross Sorkin and everything goes well, so it’s easy that way,” Watson replied. “One of the things we’re really appreciating is that the city has embraced it,” Watson said. He also said in the same interview that he was expecting 100,000 people to attend the 2019 event.
In fact, Ozzy paid the city at least up to $2 million for its use of Central Park’s Great Lawn, according to a person with knowledge of the matter. The company spent the same amount on marketing the festival. It is not clear what happened to that money after the event was cancelled.
Former baseball superstar Alex Rodriguez, who appeared with Watson in interviews, suggested at the time that at least some festival-goers would be aware of some sort of “swag”. When asked about that year’s “swag bag,” Watson said it had “unusual VR.” is included [virtual reality] Headset.”
Rodriguez’s press representatives have yet to respond to Businesshala’s requests for comment.
Ozzy Fest was also at the center of a legal headache for Watson, which raised more questions about his company’s business model long after the case was settled. Music industry giants Sharon and Ozzy Osbourne sued in 2017 over the name Ozzy Fest, saying it was too close to the name of their music festival, OzFest. The parties eventually reached an agreement.
Then, in 2019, Watson claimed live on Businesshala that music legends Sharon and Ozzy Osbourne were friends and investors in his company after a year-long legal battle. Sharon Osbourne recently told Businesshala that she has never been friends with Watson or investors in Ozzy Media. In an interview that aired Monday on Businesshala, Watson said a deal had been reached that Osbourne would receive approximately 50,000 Ozzie shares as part of an agreement. Sharon Osbourne even called Watson a “schister”.
Watson also disputed Monday that he called Sharon Osbourne a friend.
“I didn’t say she was a friend. You know what? Play the tape, then. Please go ahead and play the tape. You know what,” Watson said Monday.
The tape reveals that Watson actually described Osbourne as friends during a 2019 interview: “Fun fact: Our friends Ozzy and Sharon sued us briefly, and then we decided to be friends.” and now they are investors in Ozzie.”
WATCH: OG Media CEO Carlos Watson calls Osbourne a “friend” during a 2019 interview.