Vice Media files for bankruptcy protection to facilitate its sale

Vice Media files for bankruptcy protection to facilitate its sale

Falters after a meteoric rise and struggled as advertising revenues shrank

Once cherished by the digital news media world, Vice Media has filed for Chapter 11 bankruptcy protection to facilitate its sale.

The millennial-focused American-Canadian digital media and broadcasting company, known for its edgy news and lifestyle content, was among the rising stars of a new breed of digital media firms. However, it later struggled as advertising revenues shrank.

The company admitted agreeing to the terms of an asset purchase agreement with a consortium of lenders including Fortress Investment Group, Soros Fund Management, and Monroe Capital.

It said that the consortium submitted a credit bid of about $225 million "for substantially all of the company's assets, in addition to the assumption of significant liabilities upon closing.”

It added, "To facilitate the sale, Vice has filed voluntary petitions for reorganization under Chapter 11 in the US Bankruptcy Court for the Southern District of New York.”

The New York-based company said it had estimated assets of between $500 million and $1 billion. It also maintained having over 5,000 creditors.

In 2017, Vice Media was valued at $5.7 billion, which, then was more than the market capitalization of The New York Times.

Recently, Vice, which once attracted major funding from Disney and Fox, among others, cancelled its signature show Vice News Tonight and laid off 100 people.

In a statement, the company said that all its media brands would continue to produce content despite the bankruptcy filing. "Vice serves a huge global audience with a unique brand of news, entertainment and lifestyle content,” it stated.

Bruce Dixon and Hozefa Lokhandwala, the company’s CEOs expressed, "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.”

They added, "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."

Founded in 1994 as a Canadian magazine, Vice grew into an online media group with news websites and television operations. It cultivated a ‘bad boy’ image and its success captured the attention of the media world as it connected with young audiences.

In 2018, its co-founder Shane Smith stepped down as chief executive after the group was tainted by reports of workplace harassment. It led to the dismissal of three employees after "multiple instances of unacceptable behaviour."

Smith was replaced as CEO by television industry veteran Nancy Dubuc, who left the group early this year.

Vice had gained notoriety for sending former NBA star Dennis Rodman to North Korea. However, it also won praise for a five-part documentary on the Islamic State group’s inner workings.