Vice Media Likely to File for Bankruptcy: Report

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by Alexandra Stegrad

May 2, 2023 | 11:32 a.m

Vice Media, the Brooklyn-based company once a darling in the digital media world, is poised for bankruptcy, according to a report.

The New York Times reported on Monday, citing anonymous sources familiar with the matter, that the filing could happen in the coming weeks.

Founded by Shane Smith, whose once media company was worth nearly $6 billion, Vice has been looking for a buyer since last year.

More than five companies have expressed interest in acquiring Vice, the paper said, but the chances of a takeover happening are now “increasingly slim”.

The looming bankruptcy marked the end of Weiss’s wild ride in which Smith sought to disrupt traditional storytelling. Major media companies such as Disney have invested hundreds of millions of dollars in Smith’s vision.

In 2017, a funding round from private equity firm TPG gave the company an inflated valuation of $5.7 billion.

Vice President includes News, a few websites like Munchies, Motherboard, and an ad agency called Virtue.

However, by most accounts, Vice is currently worth a fraction of that amount.

If Vice files for bankruptcy, the company’s largest debt holder, Fortress Investment Group, could end up controlling it, The Times reports. In this case, Vice would continue to operate normally and conduct an auction to sell the company over a period of 45 days, with Fortress positioned as the most likely acquirer.

The report said that Fortress, which has large debts, will be repaid first in the event of a sale, indicating that investors such as Disney, which has already written off its investments, will not receive a return.

“Vice Media Group has engaged in a comprehensive assessment of strategic and planning alternatives,” a deputy rep said on Monday. “The Company, its Board of Directors and stakeholders continue to focus on finding the best course for the Company.”

Founded as Vice Magazine in 1994 by the bombastic Smith, the company has continued its push into video and television. By 2013, Vice had its own weekly news show on HBO. Three years later, she launched Viceland, which fell in the ratings.

Under Smith, Vice had high hopes of becoming a major media powerhouse with $1 billion in revenue by 2015. According to The Times, Disney explored buying Vice for more than $3 billion that year, after investing hundreds of millions.

No deal ever happened, and Vice was squeezed by the challenges of the digital advertising market. Meanwhile, a series of critical reports in 2018 about how Vice was built on shenanigans, smoke and mirrors by Smith, who reportedly oversaw a toxic work environment for female employees, hurt the company and its founder.

Vice’s fortunes were deteriorating and by 2019 the HBO show and cable channel had been canceled, news leaked that Vice had paid $1.87 million to settle a class action lawsuit brought by female employees, and Smith had been replaced as CEO by A&E boss Nancy Dubuque.

Under Dubuc, there have been several rounds of reorganization throughout the company, which not only helped smooth out costs, but also helped boost revenue. The Wall Street Journal reported last year that Vice estimated it would reach $1 billion in revenue by the end of 2023. The CEO left the company this year, after helping clean up a toxic workplace culture.

Last week, the company said it was shutting down Vice World News, a global media initiative that covered global conflict and human rights abuses — for which the news outlet was known under Smith.