Vice Media, the once-celebrated new media start-up, has filed for bankruptcy protection ahead of a proposed deal to sell the business to a consortium of lenders including Fortress Investment Group and Soros Fund Management.
Home to Vice News, Motherboard, Refinery29 and Vice TV, the group was once among the hottest digital media groups, winning a multi-billion dollar valuation based on its popularity among millennials drawn to an often anarchic style that reflected its roots. as a punk magazine in Montreal.
However, the group has struggled to turn its mix of news, entertainment and lifestyle into lasting financial success, undermined by audience reversion to more traditional media groups and the tight grip of tech giants like Meta on digital advertising in the US. last years.
Vice said Monday it has agreed to a sale to a consortium of its lenders, provided it remains open to higher bids from others. The consortium, which Monroe Capital is also a part of, has agreed to grant a credit of 225 million dollars for its assets, in addition to the assumption of “significant liabilities”.
The lenders will also provide more than $20 million in cash and other financing to finance Vice’s business throughout the sale process, which is expected to close in the next two to three months.
In a statement, Bruce Dixon and Hozefa Lokhandwala, co-chief executive officers of Vice, said “the sale process will strengthen the company and position Vice for long-term growth.”
The statement added that the deal would safeguard “the kind of authentic journalism and content creation that makes Vice such a trusted brand for young people and such a valuable partner to brands, agencies and platforms” under new ownership and “the ability to operate without the legacy liabilities that weigh on our business”.
Most of the company’s international entities and a television joint venture with broadcaster A&E are not part of the Chapter 11 filing.
The deal will mean existing investors in the business will likely be wiped out, including James Murdoch, who has invested through his holding company Lupa Systems, Disney and private equity group TPG.
A $450 million financing deal led by TPG in 2017 was agreed to grow scheduled programming and international operations, giving the group a valuation of $5.7 billion.
However, by the following year, Disney had been forced to write down its stake in the company as the tide began to turn on the cohort of genre start-ups that had hitherto appeared to be the future of the media industry.
After years of attracting increasingly high valuations from investors eager to tap into the digital media market and its younger audience, the fortunes of these new cloak-and-dagger groups have turned.
BuzzFeed was shut down last month its award-winning news operations and Vox is having to cut staff across its entire business.
Many digital startups relied on large technology platforms for traffic and referrals. But instead of relying on digital media groups for content, tech groups like Meta have deprioritized and changed strategies, especially avoiding paying for third-party news.
Newer app-based platforms like TikTok have also appealed to younger audiences, leaving companies like Vice struggling for their future.
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