Vice Media Files For Chapter 11 Bankruptcy

NEW YORK – Vice Media, the most recent digital media company to fall after a spectacular rise, filed for Chapter 11 bankruptcy protection on Monday.

A group of lenders, including Fortress Investment Group, Soros Fund Management, and Monroe Capital, is buying Vice Media for around $225 million and taking on a major portion of the company’s debt. Other parties will also be able to submit bids.

Vice Media anticipates completing the sale within the next two to three months. It stated that its media brands will continue to produce content and that the company will continue to pay its employees and vendors during the process.

Vice Media co-CEOs Bruce Dixon and Hozefa Lokhandwala stated in a prepared statement that 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.”

According to the disclosure on Monday, vice assets and liabilities are worth between $500 million and $1 billion.

According to the Wall Street Journal, the bankruptcy filing comes only weeks after the firm announced that it would eliminate its flagship “Vice News Tonight” program as part of a wave of layoffs affecting more than 100 of its 1,500-person workforce. The corporation also announced the demise of its Vice World News brand.

A broader wave of media layoffs and closures has occurred, including employment cuts at Gannett, NPR, the Washington Post, and other organizations. BuzzFeed Inc. stated in April that its Pulitzer Prize-winning digital media company BuzzFeed News would be shuttered as part of its corporate parent’s cost-cutting push.

Vice Media, the most recent digital media company to fall after a spectacular rise, filed for Chapter 11 bankruptcy protection on Monday.

This year, digital advertising has plunged, reducing the income of big technology corporations ranging from Google to Facebook.

“Advertising is down across the board, so it’s a litmus test for a lot of digital publications,” Megan Duncan, an assistant professor at Virginia Tech’s School of Communication, told The Associated Press.

Duncan and others also mentioned the shifting nature of social media, a sector where sites like Vice formerly flourished in terms of audience reach.

“One of the things I think really hurt Vice Media, and thus BuzzFeed, is social media networks like Facebook changing their algorithms,” said Jason Mollica, professor at American University’s School of Communication. “You’re losing money when you’re not bringing in the numbers you’d expect from advertising.”

Aside from advertising and the changing digital landscape, Mollica and Duncan highlighted today’s news consumers’ changing habits and the obstacles media firms face in reaching viewers.

Vice Media, the most recent digital media company to fall after a spectacular rise, filed for Chapter 11 bankruptcy protection on Monday.

“With such a focus on youth, it can be really difficult to keep being youth-oriented — and change your brand and appeal for the next generation,” Duncan explained.

Duncan also stated that Vice has relied on several rounds of investment and investors throughout the company’s existence and “never really found the business model in its most recent, modern digital age that was going to sustain it.” Aside from that, the corporation has a “complicated history” with issues in leadership and personnel, she added.

Vice Media’s origins may be traced back to 1994 when Vice’s inaugural punk magazine was launched in Montreal. Vice quickly relocated to New York and grew into a global media organization.

Vice Media has built a reputation for outspoken journalism that has covered bold subjects worldwide, particularly among new, youthful audiences on digital media. Other assets of the media organization include film and television production, an in-house marketing agency, and brands such as Refinery 29 and Unbothered.

In recent years, the media organization has struggled to earn a profit. According to the disclosures on Monday, Vice has a total outstanding debt of $834 million.

Vice Media was valued at $5.7 billion in 2017. However, according to The New York Times, most experts now believe the company is worth only a fraction of that.

The bankruptcy filing on Monday comes just months after Nancy Dubuc announced her resignation as CEO. Dixon and Lokhandwala, both experienced Vice executives, have been named co-CEOs.

Dubuc took over for Vice co-founder Shane Smith in 2018 after a 2017 Times investigation revealed systemic sexual harassment and misbehavior at the organization.

SOURCE – (AP)