Vice, which was valued at $5.7 billion in 2017, is now preparing to file for bankruptcy, according to a New York Times report citing “two people with knowledge of its operations.”
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It’s a stunning development coming on the heels of a series of layoffs in digital media, including at Vice. Last week, the American-Canadian company announced that it was closing Vice News Tonight, its TV news program, and Vice World News, its global operation, laying off more than a hundred employees.
Vice has been searching for a buyer for months. According to the NYT report, at least five companies are interested in acquiring the brand. A successful sale could fend off a bankruptcy filing, though the chances of a deal going through was described as “increasingly slim.”
Vice’s rise and fall
Vice’s $5.7 billion valuation in 2017 by private equity firm TPG represented a high water mark, but the media company is now likely worth a small fraction of that.
In February, Vice secured $30 million in debt financing from Fortress Investment Group to help pay off millions of dollars in mounting, unpaid bills. If the bankruptcy goes through, Fortress would likely gain control of Vice, according to the NYT. The company would continue normal operations during a 45-day auction period, with Fortress in the front position to acquire.
Vice started as a punk zine in Montreal in the 1990s, expanding into a global media brand that included a print magazine, a vast digital content operation, a TV and film production studio, and its own TV network, Vice TV. It racked up prestigious journalism awards with its flagship program, Vice News Tonight. Vice’s brash reporting style helped define a new era of news, starting in the mid-2000s, that courted a younger audience, while drawing hundreds of millions of dollars in investments from establishment media companies, including Disney and Fox.
The company, however, has failed to turn a profit for years, losing money and resorting to successive rounds of staff layoffs.
It has been a tough few months for media. Last month, Buzzfeed laid off staff and closed its news operation. Vox, Gannett, NPR, FiveThirtyEight, National Geographic, and the Washington Post have likewise announced layoffs amid a downturn in advertising.
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In a stunning about-face for the media juggernaut Vice Media, the company is reportedly facing bankruptcy after being valued at $5.7 billion just a few years ago.
Founded in 1994, Vice Media began as an alternative youth culture magazine, but grew over time to become a major digital media company. Its once powerful portfolio of television shows, websites, and radio stations left many wondering if the company was poised to become the next media titan. However, Vice reached its crest in 2018 when it was valued at $5.7 billion and sold 10% of itself to the Walt Disney Company.
Since then, however, the company has suffered a series of missteps that have led to its current predicament. A large number of layoffs in 2019 were seen as a sign of trouble, but little did we know the company had also overextended itself financially. After pivoting to a focus on longer form content, it became clear Vice Media had overestimated the number of subscribers it could bring in.
The final blow came when the Covid-19 pandemic hit and the company was forced to implement, three major rounds of layoffs. In addition, Vice’s inability to adapt quickly to the pandemic exacerbated its already precarious position.
Due to this rapid turn of events, reports have started to surface that the company is on its way to bankruptcy. While Vice’s exact financial state is unknown, the company is reportedly looking for new investors to help pay its debt.
The possible bankruptcy of Vice Media is one that nobody expected just a few years ago. Yet, its uncertain future has become a noticeable outcome of the pandemic. How this potentially groundbreaking media company will recover, or not, is something we will all be watching closely.
