On Monday, VICE Media Group filed for Chapter 11 bankruptcy, confirming rumors that the digital media company is in dire financial straits. In addition to VICE.com, VICE Media Group owns a range of brands including creative agency Virtue, Pulse Films, VICE Studios, VICE Distribution, i-D, Refinery29, Unbothered, Somos and 29Rooms. Most of the company’s international entities are not included in the bankruptcy filing. Now for sale, the company was once valued at $5.7 billion.
An investment group that includes VICE lenders — Fortress Investment Group, Soros Fund Management and Monroe Capital — have the leading bid at $225 million. The hefty price tag would be covered by existing VICE loans. The buyers would also take on “significant liabilities” from VICE once the deal is complete. VICE Media Group has asked the U.S. Bankruptcy Court for the Southern District of New York to approve the transaction, subject to higher or better bids.
“Over the last several months, our Board and management team have worked, with advisors to evaluate a range of strategic options to improve our financial health and protect the long-term viability of VICE,” VICE said on a VICE Media Group restructuring website. “We’ve chosen to undertake a court-administered sale process, with the support and commitment of our lenders, as the culmination of this evaluation.
“We believe it is the best outcome for all VICE stakeholders, safeguarding the kind of journalism and content creation that makes VICE special while strengthening the Company’s capital structure and positioning VICE for sustained growth,” VICE said.
According to a news release, VICE said it has gotten commitments for debtor-in-possession financing from the investment group and consent to use more than $20 million from the group’s cash collateral to keep running the organization while the sale is in the works. The process is expected to be complete in two to three months.
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The company said that, throughout the sale process, VICE Media Group will continue to produce content across its platforms. The company also said it expects to continue to pay employee wages and benefits without interruption and pay vendors and suppliers on normal terms for goods and services provided on or after the filing date.
“VICE serves a huge global audience with a unique brand of news, entertainment and lifestyle content,” said Bruce Dixon and Hozefa Lokhandwala, VICE’s co-chief executive officers, in a May 15, 2023 news release.
“This accelerated court-supervised sale process will strengthen the Company and position VICE 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. We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE,” Dixon and Lokhandwala added.
About VICE Media Group
Launched in 1994, VICE Media Group is the world’s largest independent youth media company. From their global offices, VICE says they produce 2,400 pieces of content weekly in 25 different languages across their brands. VICE fans can find their work on their websites, podcasts and YouTube, as well as in a print magazine, on their social media platforms, in newsletters, and at events.
“Coming to you from around the world, VICE Digital’s team strives to capture the people at the heart of stories, and focus on the ideas, issues, and context that other outlets miss,” VICE says.
Other media failures
VICE Media is not the only digital media organization to struggle recently. Other notable media failures include the following:
BuzzFeed News: In April, BuzzFeed CEO Jonah Peretti announced that BuzzFeed News was shutting down because the company said they could no longer fund BuzzFeed News as a standalone operation. Content would be shifted to HuffPost.
Vox Media: Also in April, Vox Media spun off NowThis, an independent news site known for its viral political videos that average 70 million views a month. Vox Media purchased NowThis when it acquired Group Nine Media in 2021.
MTV News: Earlier this month, MTV News shut down after 36 years of news targeting Gen Xers and older millennials, as part of layoffs at Paramount Global, says The Hollywood Reporter.
Insider Take
This is a tough time to be in the news industry, whether digital, broadcast or print. While VICE made a name for itself in large niche markets, they have had a tough time financially, especially as advertising spending decreases across the board or goes to tech platforms. For months, VICE has been rumored to be on the verge of bankruptcy, and the inevitable finally happened. It looks like they have a buyer, so the company could potentially operate moving forward, but if so, we anticipate changes. The new owners will need to make adjustments, including cutting costs and finding new – or more reliable – revenue streams.
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