Vice, the brash digital-media disrupter that charmed giants like Disney and Fox into investing before a stunning crash-landing, is preparing to file for bankruptcy, according to two people with knowledge of its operations.
The filing could come in the coming weeks, according to three people familiar with the matter who weren’t authorized to discuss the potential bankruptcy on the record.
The company has been looking for a buyer, and still might find one, to avoid declaring bankruptcy. More than five companies have expressed interest in acquiring Vice, according to a person briefed on the discussions. The chances of that, however, are growing increasingly slim, said one of the people with knowledge of the potential bankruptcy.
A bankruptcy filing would be a bleak coda to the tumultuous story of Vice, a new-media interloper that sought to supplant the media establishment before persuading it to invest hundreds of millions of dollars. In 2017, after a funding round from the private-equity firm TPG, Vice was worth $5.7 billion. But today, by most accounts, it’s worth a tiny fraction of that.
In the event of a bankruptcy, Vice’s largest debtholder, Fortress Investment Group, could end up controlling the company, said one of people. Vice would continue operating normally and run an auction to sell the company over a 45-day period, with Fortress in pole position as the most likely acquirer.
Unlike Vice’s other investors, which have included Disney and Fox, Fortress holds senior debt, which means it gets paid out first in the event of a sale. Disney and Fox, which have already written down their investments, are not getting a return, the person said.
“Vice Media Group has been engaged in a comprehensive evaluation of strategic alternatives and planning,” Vice said in a statement on Monday. “The company, its board and stakeholders continue to be focused on finding the best path for the company.”
Vice began as a punk magazine in Montreal more than two decades ago. Over the years, it blossomed into a global media company with a movie studio, an ad agency, a glossy show on HBO and bureaus in far-flung world capitals. Disney, after investing hundreds of millions in Vice, explored buying the company in 2015 for more than $3 billion, according to the two people familiar with the conversations.
The deal never materialized, and Vice eventually succumbed to a bearish market for digital media companies. The company has been trying for years to turn a profit but has consistently failed to do so, losing money and repeatedly laying off employees.
Last week, Vice told employees it was closing Vice World News, a global reporting initiative that covered world conflict and human-rights abuses. The closure of the world news operation was a blow to employees who saw the division’s aggressive coverage as in keeping with Vice’s roots in gonzo journalism, established when co-founder Shane Smith would report from risky destinations like North Korea.
As it has sought a buyer in recent months, Vice has dealt with turnover in its leadership ranks. Nancy Dubuc, the company’s former chief executive, left this year after nearly five years at the company. Jesse Angelo, the company’s global president of news and entertainment, also left the company.