Vice Media likely to file for bankruptcy: report

Vice Media, the Brooklyn-based company that was once the darling of the digital media world, is preparing to file for bankruptcy, according to a report.

The filing could happen in the coming weeks, the New York Times reported Monday, citing anonymous sources with knowledge of the matter.

Founded by Shane Smith, whose once-high-flying media firm was worth nearly $6 billion, Vice has been looking for a buyer since last year.

The Times said more than five companies have expressed interest in acquiring Vice, but the chances of an acquisition happening now are “increasingly slim.”

The looming bankruptcy would mark an end to Vice’s wild ride in which Smith sought to disrupt traditional storytelling. Mainstream media companies like Disney invested hundreds of millions of dollars in Smith’s vision.

In 2017, a funding round from the private equity firm TPG gave the company a bloated valuation of $5.7 billion.

Vice includes Vice News, a handful of websites like Munchies and Motherboard, and an advertising agency called Virtue.

However, by most accounts, Vice is currently worth a small fraction of that sum.

If Vice does file for bankruptcy, the company’s largest debtholder, Fortress Investment Group, could end up controlling it, the Times reported. In that case, Vice would continue operating normally and run an auction to sell the company over a 45-day period, with Fortress in position as the most likely acquirer.

Fortress, which holds senior debt, would get paid off first in the event of the sale, the report said, noting that investors like Disney, which already took a writedown in its investments, wouldn’t get a return.

“Vice Media Group has been engaged in a comprehensive evaluation of strategic alternatives and planning,” a Vice rep said Monday. “The company, its board and stakeholders continue to be focused on finding the best path for the company.”

Founded as Vice Magazine in 1994 by the bombastic Smith, the firm steadily made its push to video and TV. By 2013, Vice had its own weekly news show on HBO. Three years later, it launched a cable channel, Viceland, which slumped in the ratings.

Under Smith, Vice had big hopes of becoming a media juggernaut with revenue touching $1 billion by 2015. According to the Times, Disney explored buying Vice for more than $3 billion that year, after investing hundreds of millions.

A deal never happened and Vice was getting squeezed by the challenging digital advertising market. Meanwhile, a series of critical reports in 2018 on how Vice was built on bluffs and smoke and mirrors by Smith, who reportedly oversaw a toxic work environment for female staff, damaged the company and its founder.

Vice’s fortunes were souring and by 2019, the HBO show and the cable channel were canceled, news leaked out that Vice ponied up $1.87 million to settle a pay-disparity class-action lawsuit filed by female employees, and Smith was replaced as CEO by A&E boss Nancy Dubuc.

Under Dubuc, there had been several rounds of reorganization across the company, which has not only helped cull costs, but also grow revenue. The Wall Street Journal reported last year that Vice has estimated it will hit $1 billion in revenue by the end of 2023. The CEO left the company this year, after helping clean up its toxic workplace culture.

Last week, the company said it was closing Vice World News, a global reporting initiative that covered world conflict and human rights abuses — which the news outlet was known for under Smith.