Vice Media files for bankruptcy after years of financial difficulties to ease sales weeks after announcing round of ‘painful’ layoffs
- It comes in the midst of a challenging period for several technology and media companies
Vice Media Group, popular for websites like Vice and Motherboard, filed for bankruptcy protection on Monday to secure the sale to a group of backers, ending years of financial trouble and the departure of top executives.
Vice said the lender consortium, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, will provide approximately $225 million in the form of a credit offer for virtually all of the company’s assets and will also assume significant liabilities at closing.
Under a credit offer, creditors can redeem their secured debt instead of paying cash for the company’s assets.
The company listed both assets and liabilities between $500 million and $1 billion, according to a court filing.
Vice said it has received commitments from the lenders to finance the debtor in possession, as well as permission to use more than $20 million in cash, which it says will be “more than enough” to fund its company during the sale process .
Vice headquarters is pictured on the day the media company is reported to be bankrupt, May 2, 2023
The bankruptcy filing comes amid a challenging period for several technology and media companies as they have resorted to downsizing in recent months due to a turbulent economy and a weak advertising market.
Vice was among a group of high-growth digital media companies that once commanded rich valuations as they courted millennial audiences. It rose to prominence alongside co-founder, Shane Smith, who built his media empire from a single Canadian magazine.
In April, the company said it would cancel the hit TV show “Vice News Tonight” as part of a broader restructuring that would lead to job cuts in the digital media company’s global news business.
“In response to the current market conditions and business realities facing VMG and the wider news and media industry, we are continuing to make a number of painful but necessary reductions, primarily in our news business,” said co-CEOs Bruce Dixon and Hozefa Lokhandwala. .
The exact number of layoffs was not specified, but according to CNN it would be “dozens”.
Last month, BuzzFeed Inc said it would close its news division, known for its irreverent and intrusive reporting, but ultimately succumbed to the challenges of its digital-first business model.
Chief executive Jonah Peretti announced the closure Thursday morning in a memo to employees, amid news that the company plans to cut 15% of its workforce.
“While layoffs are being made in nearly every division, we have determined that the company can no longer continue to fund BuzzFeed News as a standalone organization,” said Peretti.
“We have faced more challenges in recent years than I can count,” he continued. “Dealing with all of these obstacles at once is part of why we had to make the tough decisions to cut more jobs and cut spending.”