Vice, the humble digital-media disrupter that lured investment giants like Disney and Fox before a spectacular 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 were not authorized to discuss the potential bankruptcy on the record.
The company is looking for a buyer, and may yet find one, to avoid declaring bankruptcy. More than five companies have expressed interest in acquiring Vice, according to a person briefed on the discussions. Those chances, however, are growing increasingly slim, said one of the people with knowledge of the potential bankruptcy.
The bankruptcy filing would be a sad coda to the turbulent story of Vice, a new media interloper who sought to replace the media establishment before coaxing it to invest hundreds of millions of dollars. In 2017, after a funding round from private-equity firm TPG, Vice was valued at $5.7 billion. But now, by most accounts, it’s worth a fraction of that.
In the event of bankruptcy, Vice’s largest debtholder, Fortress Investment Group, could take control of the company, one of the people said. Vice will resume normal operations and run an auction to sell the company within 45 days, with Fortress in pole position as the most likely acquirer.
Unlike Vice’s other investors, which include Disney and Fox, Fortress holds senior debt, which means it gets repaid first in the event of a sale. Disney, which has already written off its investments, isn’t making a profit, the person said.
“Vice Media Group is engaged in a comprehensive review of strategic alternatives and planning,” Vice said in a statement Monday. “The company, its board and stakeholders remain committed to finding the best path forward for the company.”
Vice began as a punk magazine in Montreal more than two decades ago. Over the years, it has grown into a global media company with a movie studio, an ad agency, a glossy HBO show 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 two people familiar with the talks.
The deal fell through, and Vice eventually succumbed to a bearish market for digital media companies. The company had been trying to make a profit for years but it kept failing, losing money and repeatedly laying off employees.
Last week, Vice told employees it was shutting down Vice World News, a global reporting initiative covering world conflict and human rights abuses. The closure of the global 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 dangerous destination like North Korea.
As it has been looking for a buyer in recent months, Vice has undergone turnover in its leadership ranks. Nancy Dubuc, the company’s former chief executive, left this year after nearly five years with the company. Jesse Angelo, the company’s global president of news and entertainment, also left the company.