Vice Media files for bankruptcy after wave of layoffs

World
By William

Online media company, once valued at $5.7 billion, is seeking bankruptcy protection after looking for a buyer.

Vice Media has filed for bankruptcy protection, the latest digital media company to falter after a meteoric rise.

Vice said Monday it has agreed to sell its assets to a consortium of lenders — Fortress Investment Group, Soros Fund Management and Monroe Capital — in exchange for $225 million in credit. Other parties can also submit bids.

The Chapter 11 bankruptcy filing was announced weeks after the company announced it would cancel its flagship Vice News Tonight program and lay off employees. The layoffs were expected to affect more than 100 employees in the 1,500-strong workforce, The Wall Street Journal reported. The company also said it would discontinue its Vice World News brand, making Vice News the sole brand in the world.

Bankruptcies filed under Chapter 11 of the United States Bankruptcy Act are designed to protect an indebted company from its creditors in order to facilitate its sale or reorganization into a profitable business.

Monday’s filing comes amid a spate of media outlet layoffs and closures, including job cuts at newspaper publisher Gannett, National Public Radio and The Washington Post. In April, BuzzFeed Inc announced that its Pulitzer Prize-winning digital media outlet BuzzFeed News was closing as part of a cost-cutting effort by its parent company.

The current uncertain economic situation and declining digital advertising sales have also affected the profitability of major tech companies, from Google to Facebook.

Vice Media’s roots date back to 1994 with the launch of Vice’s original punk magazine in Montreal. Vice soon moved to New York and built itself into a global media company.

Over the years, Vice has built a reputation for in-your-face journalism doing bold stories around the world. The media company’s assets also include film and TV production, an in-house marketing agency, and brands such as Refinery 29 and Unbothered.

The media company has struggled to turn around profits in recent years. While facing a financial crisis, Vice secured $30 million in debt financing from Fortress Investment Group in February, The Wall Street Journal reported.

In 2017, Vice was valued at $5.7 billion. Most experts estimate the company is now worth only a fraction of that, The New York Times reported this month.

Co-CEOs Bruce Dixon and Hozefa Lokhandwala said the sale process will strengthen the company and position it for long-term growth, “ensuring the kind of authentic journalism and content creation that has made VICE such a trusted brand for young people and such a valued partner of brands, agencies and platforms”.

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