Once upon a time, Vice was a genuinely cool digital media brand with an enviable youth audience and the financial backing of the world’s biggest entertainment companies. But the years have not been kind to the self-styled “disruptors.”
Last year, after an epic crash landing from their lofty US$5.7 billion valuation achieved circa 2017, Vice Media filed for Chapter 11 bankruptcy protection to facilitate its sale.
“The company said in a court filing that it listed both assets and liabilities in the range of US$500 million to US$1 billion, according to the Reuters news service,” revealed Variety.
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“The statement also said that the group had agreed to the terms of an asset purchase agreement with a consortium of lenders. These include Fortress Investment Group, Soros Fund Management, and Monroe Capital.”
The consortium outlined above had agreed to provide a total purchase consideration of approximately US$225 million in the form of a credit bid for essentially all of Vice Media’s assets, in addition to the “assumption of significant liabilities upon closing.”
This week, in a memo to Vice employees, CEO Bruce Dixon confirmed the company was restructuring significantly. Not only will it discontinue publishing content on its own website Vice.com in favour of putting “more emphasis on our social channels as we accelerate our discussions with partners to take our content to where it will be viewed most broadly”; “several hundred” jobs are now on track to be cut in the coming week.
“We create and produce outstanding original content true to the Vice brand. However, it is no longer cost-effective for us to distribute our digital content the way we have done previously,” wrote Dixon.
“Moving forward, we will look to partner with established media companies to distribute our digital content, including news, on their global platforms, as we fully transition to a studio model.
The chief executive later added how Vice Media Group was “in advanced discussions” to sell female-focused media company Refinery29, which was acquired back in 2019 for US$400 million.
He continued: “I know that saying goodbye to our valued colleagues is difficult and feels overwhelming, but this is the best path forward for Vice as we position the company for long-term creative and financial success.”
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“Our financial partners are supportive and have agreed to invest in this operating model going forward. We will emerge stronger and more resilient as we embark on this new phase of our journey.”
“Thank you for your continued dedication to Vice and support during this time of transition. Together, I am confident that we will overcome any challenges and achieve our shared goals.”
Another cautionary tale bites the dust.
