Vice Media Files for Bankruptcy and Sells Assets to Creditors
Vice Media, the parent company of news outlets Vice News and Refinery29, filed for bankruptcy on Monday and announced an agreement to sell its assets to its creditors. The company, once valued at $5.7 billion, will continue its operations through the sale process thanks to a $20 million loan secured by the proposed buyers. If the deal is successful, Vice will be acquired by lenders such as Fortress Investment Group and Soros Fund Management for $225 million, who will also assume “significant liabilities.” Following Vice’s decision to abandon its plan to go public in 2021 and the mounting debts of the company, Nancy Dubuc, the CEO, announced her resignation in February.
Vice Media’s five main business units are: Vice.com, the Vice Studios film and TV production unit; the Vice TV television network; Vice News; and creative agency Virtue. The company’s portfolio also includes Refinery29, the media and entertainment brand focused on women acquired in 2019; London-based Pulse Films; and i-D, a digital and print style publication covering fashion, culture and design.
The bankruptcy filing is a milestone for the digital media arena, as Vice had been struggling with its finances for several years. The already harsh conditions for media and technology firms were exacerbated by this, leading many to implement severe measures such as reducing staff and cutting costs to endure the volatile economy and feeble advertising sector. Last month, BuzzFeed, a pioneering digital company, closed down its esteemed news department.
Vice was one of the digital media ventures that quickly gained popularity and attracted high valuations while targeting millennial audiences. Together with its co-founder Shane Smith, it gained widespread recognition as he established his media empire from a lone Canadian magazine. Vice launched as a magazine in 1994 and was known for its no-fear approach to journalism and digital video, becoming a world-leading youth media brand.
The company relocated to New York in 1999 and expanded greatly, becoming more digital-focused and adding film and TV units. After a period of triumph and significant impact on culture, Vice reached the height of its success when TPG Capital, a private equity behemoth, infused $450 million into the company, leading to an extraordinary valuation of $5.7 billion.
In the previous month, Vice Media carried out job cuts in its news department and announced the discontinuation of “Vice News Tonight,” the nightly program on Vice TV that was previously broadcast on HBO. Jesse Angelo, who served as Vice Media’s global president of news and entertainment, announced in March that he would leave the company to establish his own media and consulting venture.
According to a statement from Vice co-CEOs Bruce Dixon and Hozefa Lokhandwala, the speedy sale process supervised by the court will enhance the company’s strength and set it up for long-term expansion, ensuring its reputation for genuine journalism and content creation that resonates with young audiences. This will also maintain Vice’s position as a valued partner to brands, agencies, and platforms.
Vice’s bankruptcy and sale to its creditors is another example of the struggles that digital media outlets are facing in the current economic climate. BuzzFeed also recently announced that it was shutting down its news division and laying off 15% of its workforce amid serious financial challenges and a slump in advertising revenue. Despite the challenges, Vice’s various multi-platform media brands including Vice News, Vice TV, Pulse Films, Virtue, Refinery29, and i-D will continue to operate, while its international entities and Vice TV’s joint venture with A&E are not part of the Chapter 11 filing.
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