After 29 years, VICE Media LLC, a trendsetting media company, has filed for Chapter 11 bankruptcy, a process that is likely to result in the sale of the company to Fortress Investment Group and Soros Fund Management for $225 million.
The news comes a few weeks after the company shuttered VICE World News and canceled VICE News Tonight, its flagship news television program, resulting in more than 100 layoffs across the newsroom.
In a statement, however, all of VICE’s multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29, and i-D, will continue to produce and deliver award-winning content across platforms.
Substantially all of the company’s international entities and the VICE TV joint venture with A&E, are not part of the Chapter 11 filing.
“VICE Media Group today announced that it has agreed to the terms of an asset purchase agreement with a consortium of its lenders,” the company said in a press release.
The filing is the latest in a series of blows to the company, which once took funding at a $5.7 billion valuation.
In 2019, the company raised $250 million in debt from investors, including Fortress and George Soros’ Soros Fund Management.
The Storm Cloud over the media industry.
This unfortunate turn of events for Vice has only darkened the storm cloud over the digital media industry.
Globally, in the last month alone, the Pulitzer Prize-winning BuzzFeed News was shuttered as part of layoffs that impacted 15% of the company. MTV News was also just shut down as part of cuts that impacted 25% of workers at its parent company, Paramount.
Closer home, last year Kenya’s legacy media houses like The Standard Group and Nation Media Group were also forced to adjust to the ever-changing ecosystem, resulting in massive layoffs.
According to Vice’s financial reporting, the company has about $834 million in debt. During the sale process, which the company believes will take a few months, Vice will have access to more than $20 million in financing from its lenders to continue operations.
Series of high-profile investments
Over the years, VICE Media has taken on a series of high-profile investments at large valuations. These investments allowed the company to expand but ultimately created a list of companies expecting a return on their investment.
This included private equity firm TPG, which gave the company $450 million in 2017 to expand its VICE TV offerings and expand internationally. The company has also taken high-profile investments from A&E Networks, Disney, and Fox.
These investments led to a highly complex corporate structure and a series of debts that Frank Pometti of the consulting firm AlixPartners, who has been appointed Chief Restructuring Officer of VICE, said ultimately resulted in the company’s bankruptcy.
VICE Media was founded in 1994 and grew from a small magazine based in Montreal to a complex, international youth media conglomerate with a flagship television channel, multiple film studio businesses, a variety of digital media brands (including Motherboard), a news division with shows on HBO and Showtime, an advertising and creative agency, and, most recently, an international news division called VICE World News.
Last month, roughly a week after Buzzfeed News shut down, the company announced it would end the VICE World News brand.
At its height, the company operated 35 offices worldwide. It has shuttered some of these over the last several years as the company has sought profitability, in part through cost-cutting and layoffs.
Earlier this year, former CEO Nancy Dubuc left the company after a five-year run, succeeding co-founder Shane Smith.
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