The Media

Why Hasn’t the New York Times Made Ben Smith Sell His BuzzFeed Options Yet?

Ben Smith types at his laptop, which is decorated with two stickers.
BuzzFeed News editor-in-chief Ben Smith poses for a picture in his office in New York City on Dec. 11, 2018. Drew Angerer/Getty Images

On Sept. 26, New York Times media columnist Ben Smith broke a big story. In a column headlined “Goldman Sachs, Ozy Media and a $40 Million Conference Call Gone Wrong,” Smith wrote about the little-read, loftily valued digital outlet Ozy, whose leaders allegedly engaged in fabulism in their efforts to attract financing, promote an online talk show starring CEO Carlos Watson, and generally leave the impression that they were running a thriving media business. In his column, Smith deftly laid out the absurd lengths to which Watson and COO Samir Rao went to pull off this illusion. At one point, on a conference call with potential financiers from Goldman Sachs, Rao impersonated a YouTube executive in order to claim that Ozy was seeing huge success on the video platform.

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The column was a blockbuster, and for perhaps the first time in its existence Ozy became the most-talked-about property in digital media. The negative buzz increased over the next week, when, in a series of follow-up articles—some written with the Times’ Katie Robertson—Smith unearthed more tales of Ozy’s alleged deceptions. By Oct. 1, Ozy had announced that it would shut down (it has since walked back the decision), and Smith was soon eulogizing the company in his column. “Now the investors and advertisers who found validation in Ozy are leaving empty-handed. The employees are no longer getting paid,” Smith wrote. “It was an abrupt fall from a dream, promoted as recently as June to investors, according to a deck shared with me, that the company would be valued at $5 billion in 2025.” It was also a huge journalistic accomplishment for Ben Smith. His reporting on Ozy had measurable impact.

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But there was a hitch to Smith’s burial of Ozy, one that’s been a problem for the columnist’s reporting for as long as he’s had the media columnist gig: Before joining the Times in 2020, Smith was the editor in chief of BuzzFeed News, and he holds BuzzFeed stock options dating from his employment there. (It’s unclear how many of these Smith has.) In this particular case, Smith had intersected with Watson and Ozy in both his executive and editorial capacities at BuzzFeed—BuzzFeed had not only run a 2017 investigation into Ozy’s traffic numbers, but it had explored an acquisition of Ozy during Smith’s tenure. Watson knew this, which Smith dutifully acknowledged in an extended parenthetical in his original Ozy piece:

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(I was editor in chief of BuzzFeed News at the time of that [2017] article. Later, I met Mr. Watson when I was peripherally involved in acquisition talks between the companies. Mr. Watson told The Times he believed that it was unethical for me to write this column. Under New York Times policy, I can’t write about BuzzFeed extensively until I divest stock options in the company, which I left last year.)

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Amid the ensuing furor over Ozy, this aside hardly counted as a big story in itself. But while Watson couldn’t convincingly rebut Smith’s reporting, he was right that the country’s most prominent media columnist has a real conflict—and Smith and the Times have already pushed back the timeline for resolving it. That Smith has had to disclose his BuzzFeed stake and policy of not reporting on BuzzFeed a half-dozen times since April 2020—usually in the course of relating something about BuzzFeed—shows how persistent this issue is.

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The problem cuts a few ways. As a columnist for the country’s most prominent newspaper, Smith has the industry’s most visible platform for media coverage and analysis. When the Times breaks a big story, it has immediate and wide-ranging consequences. But Smith also has options to buy shares in a competitor of both his own employer and of every company he writes about. It’s even possible that as other media companies get dinged, BuzzFeed’s value rises. It doesn’t really matter whether we know this for certain. The fact that the possibility exists is enough to give readers reason to wonder not only whether Smith’s coverage is in any way complicated by financial self-interest, but whether the Times’ media columnist is free to cover every important story that comes his way. Right now, should a scandal befall BuzzFeed (hypothetically!), it would go unexamined by one significant perch. Plenty of journalists have conflicts that limit what they can cover. But the shadow cast by BuzzFeed —a company that helped terraform today’s digital media landscape—looms large over Smith’s beat, and it’s not easy to get out from under it.

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Smith’s former editorship of BuzzFeed is not as much of a concern as is his financial interest in the company. The fact that Smith helped lead an influential newsroom that he now must (or will eventually) cover doesn’t actually bother me all that much. Many media reporters even write about their own institutions, including Smith at the Times. It’s all fine, as long as Smith is upfront and precise with any disclosures.

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In fact, Smith’s successful tenure at BuzzFeed is surely one big reason why he was qualified for the Times media columnist job in the first place. At BuzzFeed, Smith didn’t just preside over one of digital media’s most ambitious operations; he also gained firsthand insight into the decisions both digital and legacy media companies must make now. This experience is actually a boon to readers. In the year-and-a-half he’s been at the Times, his scoopy, playful columns have become must-reads for anyone interested in the culture and business of media. He is a sharp reporter whose career on the leading edge of new media gives him direct knowledge of and extensive connections within the world he covers.

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But the experience that may have helped Smith break a story like the Ozy saga—he was in a good position to know if Ozy’s pitch didn’t add up—also stands to potentially undermine readers’ trust in his work. Again, this isn’t because he and Watson may have once rubbed elbows, but because BuzzFeed theoretically benefits from bad news about other digital media properties. This particular situation has the potential to present not just an editorial conflict of interest, but a material one.

(I suppose this is a good place to drop my own disclaimer: My wife works for the New York Times. As such, I am personally invested in the continued existence of the New York Times, and it would be a bad thing for me if, for some weird reason, this article set in motion a chain of events that somehow led the Times to shut down.)

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So, why hasn’t Smith unloaded his options yet? Neither he nor the Times would tell me, but the answer appears to involve the kind of high-stakes digital media maneuvering I sure would love to read a Ben Smith column about.

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In June, BuzzFeed announced its plans to become a publicly traded company via a special purpose acquisition company, or SPAC, with an initial valuation of $1.5 billion. At some point after this happens, Smith stands to personally profit by the opportunity to exercise his options. I do not mean to suggest that Smith set out to “get” Ozy in order to improve BuzzFeed’s, and his, financial position; I’m quite confident he didn’t. But it does present a problem that Smith’s current disclaimer doesn’t go quite far enough to address.

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Since he first started at the Times in March 2020, Smith has been transparent about his conflict. In an early column headlined “How a New Breed of Union Activists Is Changing the Rules (and Newsrooms),” Smith acknowledged that he and the Times had decided he wouldn’t write much about BuzzFeed “because I retain stock options in the company, which could bring me into conflict with The Times’s ethics standards. I also agreed to divest those options as quickly as I could, and certainly by the end of the year.”

Smith included a similar disclaimer two weeks later, in a column titled “Is Ronan Farrow Too Good to Be True?” Noting that he first became skeptical of Farrow’s work while he was editor in chief of BuzzFeed News, Smith wrote that “I don’t cover BuzzFeed extensively in this column because I retain stock options in the company, which I left in February. I’ve agreed to divest those options by the end of the year.” Those are pretty good disclaimers. They clearly establish the conflict of interest and both the interim and eventual resolutions of that conflict. By setting forth a clear timeline for divestment, Smith rendered the conflict more of a short-term annoyance than a long-term problem.

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Soon, however, that timeline disappeared. In his next published disclaimer, in a June 2020 column, Smith once again acknowledged that “I should disclose again that I don’t extensively cover BuzzFeed, which I left in February, in this column because I have yet to divest my stock options in the company, as required by The Times.” As far as I can tell, Smith has not mentioned a specific target date for divesting since.

I asked Smith why he had stopped saying when he would sell his options. In an email responding to my questions, Times spokesperson Danielle Rhoades Ha told me that the newspaper had “extended Ben’s deadline to divest the stock options to February 2022. In the interim, Ben is not covering BuzzFeed extensively and he is disclosing that he retains options whenever he mentions BuzzFeed in a column.” Neither Smith nor Rhoades Ha responded to separate questions about why, exactly, the Times extended Smith’s divestment deadline, or whether the shifting deadline had anything to do with BuzzFeed’s plans to go public. But an SEC filing from July pertaining to BuzzFeed’s proposed SPAC merger—and an amended filing dated Oct. 1—describes a 180-day post-merger lockup period during which certain stockholders and options holders are prohibited from transferring their shares.

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While it’s unclear whether Smith’s options are subject to the restrictions pursuant to the pending merger, it’s nevertheless fair to speculate that Smith’s extended divestment timeline is in some way related to BuzzFeed’s public offering. And while it’s a good thing that Smith is open about his ongoing conflict of interest, it’s also fair to wonder why the Times tolerates this lengthy, ongoing conflict in the first place. Not only is it bad for readers to have a media columnist whose motives they cannot absolutely trust to be disinterested—it’s aggravating to have to read a media columnist who either can’t write or probably shouldn’t be writing about such a broad swath of digital media.

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I do think that too much is made sometimes about perceived bias in journalism. It was a mistake for journalists to ever pretend that it was valuable or even possible to suppress their own beliefs, knowledge, and perspectives in pursuit of absolute neutrality in every story they ever report. (Funnily enough, Smith’s most recent column was about the ongoing debate over the doctrine of journalistic objectivity.) In my opinion, readers are better served when journalists are open and honest about their predispositions.

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But there’s a difference between trumped-up claims of political bias in journalism and legitimate concerns over financial conflicts of interest. A mere disclaimer mentioning the existence of his stock options in BuzzFeed is an insufficient reckoning both with the fact that Smith still holds them, almost two years after the Times announced his hiring, and that their fluctuating value might reasonably lead readers to think twice about whether to absolutely trust the premise and intent of his reporting on other media companies.

Smith’s columns on Ozy were great pieces. He unearthed a real story, backed his assertions up with reporting, and kept on reporting until the world was forced to take notice. But that doesn’t make it an unmitigated success for the Times, and it certainly doesn’t mean that Times readers should be satisfied with an opaque, evolving disclaimer that has come to raise more questions than it answers.

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