June 13, 2024

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Vice is said to be heading for bankruptcy

Vice is said to be heading for bankruptcy

Vice, the buzzy digital media disruptor that lured giants like Disney and Fox to invest before a spectacular downward spiral, is poised for bankruptcy, according to two people familiar with its operations.

The filing could come in the coming weeks, according to three people familiar with the matter who were not authorized to formally discuss the potential bankruptcy.

The company was looking for a buyer, and might find one, to avoid declaring bankruptcy. More than five companies have expressed interest in acquiring Vice, according to a person familiar with the discussions. The chances of that, however, are increasingly diminishing, said one person familiar with the possibility of bankruptcy.

Filing for bankruptcy would be a grim consolation to the turbulent story of Vice, a new media interloper who sought to replace the media corporation before convincing it to invest hundreds of millions of dollars. In 2017, after a funding round from private equity firm TPG, Vice was valued at $5.7 billion. But today, by most accounts, he’s worth a small part of that.

In the event of bankruptcy, one person said, Vice’s largest debt holder, Fortress Investment Group, could end up controlling the company. Vice will continue to operate normally and auction the sale of the company over 45 days, with Fortress in first place as the most likely acquirer.

Unlike other Vice investors, including Disney and Fox, Fortress carries significant debt, which means it is paid first in the event of a sale. The person said Disney, which has already registered its investment, is not getting a return.

“Vice Media Group has engaged in a comprehensive assessment of strategic and planning alternatives,” Weiss said in a statement on Monday. “The Company, its Board of Directors and stakeholders continue to focus on finding the best course for the Company.”

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Vice began as a punk magazine in Montreal over two decades ago. Over the years, it has blossomed into a global media company with a movie studio, ad agency, flashy show on HBO, and offices in far-flung capitals of the world. Disney, after investing hundreds of millions in Vice, explored buying the company in 2015 for more than $3 billion, according to two people familiar with the talks.

The deal never materialised, and Vice eventually succumbed to a bear market for digital media companies. The company has been trying for years to turn a profit, but has consistently failed to do so, losing money and firing employees time and time again.

Last week, she told Vice Staff she was shutting down Vice World News, a global initiative covering global conflict and human rights abuses. Shutting down the global news operation was a blow to staff who saw the department’s blistering coverage as in keeping with Vice’s roots in gonzo journalism, which were established when co-founder Shane Smith was reporting from risky destinations like North Korea.

As it has sought a buyer in recent months, Vice has dealt with turnover in its leadership ranks. The company’s former CEO, Nancy Dubuque, left this year after nearly five years at the company. Jesse Angelo, the company’s global president of news and entertainment, also left the company.