Vice Media Group, the parent company of youth-first publisher Vice and tech publisher Motherboard, has filed for Chapter 11 bankruptcy protection (lead image: Shane Smith, Vice co-founder).
After a protracted death, the company issued a statement overnight saying that it was business as usual for the moment and expects to come back from the Chapter 11 bankruptcy auction in the next two to three months.
Under the terms of a new agreement, the business’ lenders, Fortress Investment Group, Soros Fund Management and Monroe Capital have agreed to make a US$225 million (AU$335 million) credit bid for the company’s assets and liabilities.
The lenders also agreed to give Vice a US$20 million (AU$29 million) cash injection to keep it running.
During the Chapter 11 bankruptcy auction process, the company may also receive other bids from investors. James Murdoch, son of Rupert, invested in the company back in 2019 through his holding company Lupa Systems and could invest.
Vice TV, the company’s joint venture with American cable provider A&E, is not part of the filing for the most part. However, the company said late last month that its Vice News Tonight show would be cancelled as part of cost-cutting measures to save the business.
It had been reported that Vice was close to securing a rescue deal, with Fortress Investment Group said to be planning a buyout of the business and all its shareholders. However, that deal fell through, leading to the court-guided Chapter 11 bankruptcy.
Vice’s rise was meteoric, with investors wooed by co-founder Shane Smith’s vision and planned growth trajectory for the business. The company was founded in 1994 in Montreal, Canada and saw rapid growth as a result of its risqué reporting on unusual topics. By 2017, the business was valued at AU$7.4 billion.
However, with declining ad revenue, a muddying of the company’s commercial and editorial vision and divisions between the global offices Vice quickly fell on hard times. Smith’s fellow co-founder, Gavin McInnes, left Vice and founded the far-right group, The Proud Boys, and the group was indicted in the January 6 US Capitol riots.
One ex-employee anonymously wrote: “There was a pervading fear that it would come to the exact same end that it is now. There were always whispers of inflated numbers, major brands pulling out of deals and bad behaviour.”
Lead image credit: Vice
