On Monday, Vice Media, parent company of Vice News, Vice TV, Refinery29, and Motherboard, filed for bankruptcy as companies in the media sector from Buzzfeed to Insider are caught between high costs, declining valuations, and reduced advertising revenues.
It was a sizable fall for a company which was once seen as a crown jewel of the digital media sector, when newspapers were in decline and investors were on the lookout for new forms of media to attract viewers.
Powerhouse companies such as A&E Networks and 21st Century Fox rushed to invest, with titan Disney putting $400 million into the company in 2015, at a valuation of $4 billion to $4.5 billion, taking a $157 million write-down on the original investment just one year later.
The company’s bankruptcy comes after the shutdown of its flagship Vice News Tonight program, and following 100 layoffs it implemented last month. Previously it had been reported in outlets such as the New York Times and the Wall Street Journal that the media giant was failing due to a combination of stalling growth as well as an inability to sell itself.
The Wall Street journal had reported that in December of 2022 the company was looking for a valuation of just $1.5 billion, a massive downgrade from the $5.7 billion valuation it had immediately after a 2017 funding round. Further complicating any potential sale was the fact the company had missed its full year revenue target by roughly $100 million.
Fortress Investment Group, Vice’s largest secured creditor, along with Monroe Capital, Soros Fund Management, and a consortium of lenders will invest roughly $225 million as a credit bid, as part of the bankruptcy.
In the filing it was revealed the company had assets and liabilities of between $500 million and $1 billion. A $20 million loan was secured by the lenders to continue the company’s operations.
The bankruptcy comes after a year in which the company had reduced hiring, laid off workers, and restructured its business finances to manage costs. However rising debt and increasing expenses added to a sky-high valuation to burden sale options.
Meanwhile the rest of the media sector remains in turmoil as well. Buzzfeed shut down its news division amid a wider campaign of company-wide layoffs last month, as Insider revealed it would be cutting 10 percent of its workforce, due to, “the same economic headwinds as others in our industry.”
Some have noted the same issues afflicted CNN last year, as it endured a similar round of layoffs when parent company Warner Bros. Discovery (WBD) sought to slash $4 billion in expenses over the subsequent two years.
