Digital media company Vice Media has filed for Chapter 11 bankruptcy, it was revealed on Monday.
A group of lenders are poised to take over Vice Media Group for $225 million (£180 m) — the youth-focused brand having been valued at $5.7 billion (£4.6 bn) in 2017, as reported by the BBC.
Vice focuses on culture news and world events pitched at a younger audience, with current articles ranging from political commentary to humorous features such as ‘Drunk people tell us the pettiest thing they’ve ever done’. Motherboard sits within Vice and focuses on tech news — with artificial intelligence being a particular focus of recent coverage.
This is all you need to know about this developing issue.
Who owns Vice?
Shane Smith, Suroosh Alvi and Gavin McInnes founded counterculture magazine Voice of Montreal in Canada in 1994. The magazine was later renamed to Vice in 1996.
Vice Media Group launched in 1994 in Canada as the Voice of Montreal, a fringe culture magazine, which then moved headquarters to New York in 2001.
It went on to set up five entities: Vice.com, Vice Studios for film and TV production, Vice TV, Vice News, and Virtue.
Specialising in youth media, Vice had been able to find an audience on its own platforms as well as YouTube. However, the business began to slow down in the late-2010s, with staff being laid off in 2019 as part of a merge of resources.
Why is Vice filing for bankruptcy?
Vice Media LLC filed for Chapter 11 bankruptcy on Monday (May 15), which is likely to see the company sold.
While Vice has continued to produce content such as documentaries on Ukraine and Andrew Tate, it has struggled to make a profit in recent years. Part of this reason is, according to the BBC, the cost of producing high-quality journalism.
New York Times reports estimate Vice could be hundreds of millions of dollars in debt to Fortress Investment, which might be in the running to buy the company — as might Soros Fund Management.
“The news comes a few weeks after the company shuttered Vice World News and cancelled Vice News Tonight, its flagship news television programme, resulting in more than 100 layoffs across the newsroom,” Vice said in their own story about the bankruptcy.
“The company will continue to operate normally during the Chapter 11 process.”
What have they said?
Vice says the Chapter 11 filing states the owners “have determined that it is advisable and in the best interest of the Vice Group Companies to enter into a stalking-horse agreement for the sale of substantially all assets and related auction procedures”.
The agreement is where a potential buyer is in place in advance of a bankruptcy filing.
Hozefa Lokhandwala and Bruce Dixon, joint chief executives, told the New York Times in a statement: “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 sale process could take around three months.
Other media companies that have struggled this year
Vice is not alone in facing struggles in 2023.
In television, Disney + has seen a reported fall in its number of users.
Social media platform Be Real has reacted to a declining number of active users by giving them the chance to use the app in a more open way.
And even big tech firms Meta, Roku, Snap and Alphabet are all said to have lost ad revenues, with TikTok cutting its ad sales forecast.
But, across the board, a decline in advertising on websites is said to be a cause of recent struggles.