Sale of a Business
Vice Media, Once Valued at $5.7 Billion, Files Chapter 11
Vice Media, the provocative startup once valued at $5.7 billion, has filed Chapter 11 bankruptcy.
Founded in Montreal, Canada in 1994 by Shane Smith, Gavin McInnes, and Suroosh Alvi, Vice boasted 35 global offices and was considered the largest independent media company in the world, as of June 2021. At that time, the company had five primary departments -- Vice.com; Vice Studios Vice TV (Viceland); Vice News; and Virtue.
Additionally, subsidiaries include Refinery29, Carrot Creative, and The Creators Project.
NPR reported on the current situation with the former media giant, noting that a group of Vice Media lenders plan to purchase the troubled business's assets for $225 million. The group will also take on massive debt estimated between $500 million to $1 billion. The aforementioned group, including Fortress Investment Group and Soros Fund Management, previously lent Vice $20 million during the sale process.
According to Business Insider, Vice had run multiple sales processes amid it's financial struggles. Although multiple banks bid, the company reportedly "never received an offer palatable to its owners." Someone familiar with the plans told Insider that the bankruptcy process is expected to last 45 days or fewer.
The bankruptcy showcases the sheer number of investors who believed in the founders' hype about the potential growth of Vice's various brands. Insider noted that one of the biggest losers of the Chapter 11 filing is private equity firm TPG, which invested $450 million into the company in 2017.
The current breakdown of ownership of Vice Media can be found below:
- TPG Capital (44%)
- Shane Smith (20%)
- A&E Networks (20%)
- The Walt Disney Company (16%)
- Soros Fund Management (10%)
- James Murdoch (minority stake)
In 2016, another Business Insider report indicated that Disney considered purchasing Vice, but Smith wasn't sold on the idea at the time. Currently, it seems that Disney -- once again under the leadership of CEO Bob Iger -- is not interested in taking on the floundering Vice brand.
A&E, apparently, also lacks interest in ownership despite being heavily involved in Vice's television ventures.
This is a developing story and updates will be provided.
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Feature Image Credit: Mario Tama/Getty Images
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