The firm that owns Vice and Motherboard has declared bankruptcy in the United States and is poised to be sold to a group of its lenders. Vice Media Group, which was valued at $5.7 billion in 2017, could be acquired for $225 million.
The youth-focused digital publisher has stated that it will continue to function throughout the bankruptcy process. It went on to say that it “expects to emerge as a financially healthy and stronger company in the next two to three months.”
Shane Smith, Gavin McInnes, and Suroosh Alvi founded Vice in 1994 as a fringe journal named Voice of Montreal. Vice now operates in over 30 countries.
It was formerly hailed as one of the companies poised to challenge the traditional media landscape with edgy, youth-oriented content encompassing print, events, music, online, TV, and feature films.
Rupert Murdoch, the media magnate, tweeted after visiting the Brooklyn-based firm’s office in 2012: “Who’s heard of VICE media? A fascinating attempt to engage millennials who do not read or watch traditional media. “International success.”
Previous credits include My Journey Inside the Islamic State, a Vice documentary shot alongside the extremist group in Syria. It also followed Dennis Rodman and the Harlem Globetrotters on a “sports diplomacy” mission to North Korea.
Recent films have featured documentaries about controversial influencer Andrew Tate and a film by actor Sean Penn about Ukraine’s president, Volodymyr Zelenskiy.
Fortress Investment Group, Monroe Capital, and Soros Fund Management – the firm founded by fund manager and billionaire George Soros – are among Vice Media Group’s investors.
Vice hoped to profit financially by recruiting millions of younger readers via social media platforms such as Facebook and Instagram.
However, the majority of online ad profits have eventually gone to tech behemoths such as Google and Facebook-owner Meta.
For some years, the company’s revenues have been static, and it has also failed to earn a profit. Vice’s intentions to go public via merger also fell through.
It announced layoffs last month following the cancellation of its flagship television show.
BuzzFeed, another pioneering online platform, recently announced the closure of its news division and the layoff of 15% of its workers due to severe financial difficulties and a drop in advertising revenue.
Vice Media has filed for Chapter 11 bankruptcy protection, which postpones a company’s obligations to its creditors while it restructures its debts or sells sections of the business.
Vice’s co-chief executive officers, Bruce Dixon and Hozefa Lokhandwala, announced the bankruptcy filing, saying, “This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth.”
Vice’s lenders have granted $20 million in capital to keep the company afloat during the bankruptcy process. Other firms can submit “higher or better” bids for the media company during this time.
If neither of these offers is accepted, Vice Media’s lenders will buy the publisher for $225 million.
The sale is likely to take between two and three months.
(Adapted from BBC.com)