Vice Media files for Chapter 11 to prepare for eventual sale
By Matt Collins Article may include affiliate links
Vice Media has become the latest once-hot media brand to fizzle out into bankruptcy.
The company filed for Chapter 11 bankruptcy protection Monday, May 15, 2023, as a way to better situate it for sale.
Vice runs a handful of digital properties including its flagship Vice, Motherboard and Refinery29. It also has an international division and TV partnership with A&E Networks, but the latter two assets are not included in the filing and are not planned to be included in the eventual sale.
In the filing, the company reported assets and liabilities of around $500 million to $1 billion.
Creditors including Fortress Investment Group, Soros Fund Management and Monroe Capital, may eventually end up owning the company, having made an offer to buy most of the company assets.
These creditors have already provided the company with about $20 million in cash as well as other financing arrangements, many of which are designed to help keep it afloat through the transition.
It is still possible for another company or group of investors to come in and buy Vice because the sale process is expected to take several months.
Vice was once thought to be valued at as much as $5.7 billion and it now appears that it will be sold for significantly less than that, likely under $1 billion.
The company already announced plans for layoffs and other cost cutting prior to the bankruptcy action, including canceling production of “Vice News Tonight.”
Vice, which was once considered a promising media brand thanks to its efforts to attract younger audiences and ventures into video, is not the only similar outlet to see its bubble burst.
BuzzFeed News, a division of BuzzFeed, announced it would close earlier in 2023. MTV has also pulled the plug on its news brand.
Both closures are expected to result in job losses.
Many digital media brands rely heavily on advertising to pay their workers and, hopefully, turn a profit. This can include traditional banner ads as well as sponsored native content partnerships. Ads can also be sold within original video content.
Vice reportedly had around $600 million in ad revenue in 2022, which fell short of projections by around $100 million.
The advertising market as a whole has taken a hit thanks to a rocky economy and worries over a possible recession, leaving companies that rely heavily on that for revenue on shaky grounds.
Big tech companies including Google parent Alphabet and Facebook parent Meta, both of which make a significant portion of their money on advertising, have implemented significant cost-savings and layoffs recently as well, though neither is anywhere close to bankruptcy.
Although Vice has issued statements saying it looks forward to continuing operations after the sale, there haven’t been many details on how it plans to improve revenue, move toward profitability and deliver a return for investors.
A good portion of those plans could include cost-savings such as more job cuts, generating less content and perhaps exiting certain markets or verticals, though Vice did not announce any specific plans.
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