Vice Media has filed for Chapter 11 bankruptcy as it prepares for a sale in the latest sign of the toll taken on digital media outlets by a slump in advertising revenue.
The firm, which was first launched in the mid 1990s, was once valued at as much as £4.5 billion as it sought to convince investors its strategy of appealing to younger online audiences would give it the edge in the digital media market.
But despite attracting a number of high-profile investors including billionaire George Soros and media mogul Rupert Murdoch, the company has struggled to turn a profit and has now sought a grace period to reorganise its debts as it plans a sale to its lenders for $225 million.
Vice said it “expects to emerge as a financially healthy and stronger company in two to three months”.
It comes just days after digital media business Buzzfeed said it would be laying off 15% of its staff and shutting down its news arm, Buzzfeed News, as it wrestled with declining advertising revenues.
Last week, the company posted a 27% drop in sales to $67.2 million in the first three months of 2023, primarily driven by a slowdown in ad sales and said its would concentrate its news production on its subsidiary, Huffington Post.
In 2021, Vice Media planned to raise capital by listing on the New York stock exchange via a SPAC merger, before talks fell through. Last month the company said it had initiated a round of layoffs and would be cancelling its flagship TV show, Vice News Tonight.