NEW YORK – Vice Media on Monday filed for Chapter 11 bankruptcy protection, the most recent digital media company to falter after a meteoric rise.
A consortium of lenders — Fortress Investment Group, Soros Fund Management and Monroe Capital — is buying Vice for about $225 million, in addition to taking on a significant amount of the company's debt. Other parties will be able to submit bids as well.
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Vice said it expects the sale to be wrapped up in the next two to three months. It said that during the process its media brands will continue to produce content and the company will keep paying its employees and vendors.
In a prepared statement, Vice co-CEOs Bruce Dixon and Hozefa Lokhandwala said the “accelerated court-supervised sale process” will strengthen the company and position it for long-term growth, “thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms.”
Vice assets and liabilities are worth between $500 million and $1 billion, according to Monday’s filing.
The bankruptcy filing arrives just weeks after the company announced it would cancel its flagship “Vice News Tonight” program amid a wave of layoffs expected to impact more than 100 of the company’s 1,500-person workforce, the Wall Street Journal reported. The company also said it would end its Vice World News brand.
There has been a wider surge of media layoffs and closures, including job cuts at Gannett, NPR, the Washington Post and other organizations. In April, BuzzFeed Inc. announced that its Pulitzer Prize winning digital media outlet BuzzFeed News was being shut down as part of a cost-cutting drive by its corporate parent.
Digital advertising has plummeted this year, cutting into the profitability of major tech companies from Google to Facebook.
“Advertising is down across the board, so it’s a test for a lot of the digital publications,” Megan Duncan, assistant professor at Virginia Tech's School of Communication, told The Associated Press.
Duncan and others also noted the changing landscape of social media — a space where outlets like Vice once thrived in terms of reaching audiences.
“One of the things that I think really hurt Vice, and in turn BuzzFeed as well, is social media networks like Facebook changing their algorithms,” Jason Mollica, professor at American University’s School of Communication, said. “When you're not pulling in the numbers that you would expect advertising-wise, you're losing money."
Beyond advertising and the shifting digital landscape, Mollica and Duncan also pointed to the changing habits of news consumers today — and challenges media companies across the industry face as they try to reach audiences.
“With such a focus on youth, it can be really difficult to keep being youth-oriented — and change your brand and your appeal for the next generation,” Duncan said.
Duncan also noted that Vice has relied on different rounds of funding and investors throughout the company's history and “never really found the business model in its most recent, modern digital age that was going to sustain it.” Beyond all of this, the company has its own “complicated history” with troubles in leadership and employment, she added.
Vice Media's roots date back to 1994, with the launch of Vice’s original punk magazine in Montreal. Vice soon moved to New York and built itself into a global media company.
Over the years, Vice developed a reputation for in-your-face journalism that covered daring stories around the world that particularly resonated with new, young audiences across digital platforms. The media company’s assets also include film and TV production, an in-house marketing agency, and brands such as Refinery 29 and Unbothered.
The media company has struggled to turn around profits in recent years. Monday's filings show that Vice has total outstanding debt of $834 million.
In 2017, Vice was valued at $5.7 billion. Now, however, most experts estimate the company is worth just a fraction of that, The New York Times reported earlier this month.
Monday's bankruptcy filing arrives just months after Nancy Dubuc announced that she would be stepping down as CEO of the company. Vice named longtime Vice executives Dixon and Lokhandwala as co-CEOs.
Dubuc replaced Vice co-founder Shane Smith in 2018, a turbulent time at Vice after a 2017 Times investigation uncovered rampant sexual harrassment and misconduct at the company.