Vice Media Group filed for bankruptcy on Monday. The digital media company has been affected by a drop in advertising revenue. Being a free access platform, its advertisers are its main source of income.
In the official statement, the company announced that it had filed for Chapter 11 bankruptcy "that is likely to result in the sale" while undergoing a reorganization.
The purchase, priced at $225 million, will take the form of a credit bid in exchange for all of the company's assets. Its new owners will be: Fortress Investment Group, the main creditor, and Soros Fund Management. which is owned by tycoon George Soros).
Included in the sale is a cash outlay by the lenders of $20 million immediately to enable and ensure that all of its platforms, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29 and i-D, "will continue to produce and deliver award-winning content" during the sale process, which is expected to be completed in two to three months.
Bruce Dixon and Hozefa Lokhandwala, co-executive directors of VICE, stated:
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. We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. 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.
The company reported that its international subsidiaries and Vice TV's joint venture with A&E are not included in the sale.
A bankruptcy foretold
News of the bankruptcy comes just weeks after the company canceled its flagship program "Vice News Tonight" and announced the closure of "Vice World News." In addition, the company is in the midst of a wave of layoffs that will affect more than 100 of its 1,500 employees.
According to The Guardian, Vice has been looking for a buyer for more than a year, setting an asking price of around $1.5 billion. The large figure made the sale process difficult, driving the company into bankruptcy.
Vice was once valued at more than $5 billion
In 2017, Vice was worth $5.7 billion, a figure that has been reduced to a range of $500 million to $1 billion in recent months.
The media company was co-founded by Shane Smith almost 30 years ago in Montreal, Canada. It was born as a punk, alternative and irreverent magazine focused on attracting the attention of young people. Subsequently, it expanded into digital media and television, and has forged alliances with companies such as Sky and HBO. It currently produces content in 25 languages and has more than 30 offices around the world.
