BUSINESS
Why did Vice Media file for bankruptcy? What happened to the digital media company?
The once much-vaunted media company joins a growing list of digital media companies that are feeling the advertiser burn in 2023.
VICE Media has filed for a chapter 11 bankruptcy after a turbulent half-decade for the company.
Once valued at close to $6 billion, including a $400 million from Disney, the company has floundered in an era of poor advertising revenue for digital businesses. No company was willing to by Vice Media for the $1 billion asking price and it is likely to be sold to lenders for $225 million by the end of the summer.
“This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth,” co-CEOs Bruce Dixon and Hozefa Lokhandwala wrote in a statement. “We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE.”
The story of VICE Media
Founded in 1994 as a punk magazine in Montreal, Canada, VICE had since grown into a global company that specialised in niche, often dangerous, reporting that threatened to shake up the media landscape.
In recent years, VICE Media has faced financial challenges and undergone significant higher-echelon restructuring, including layoffs and the sale of its digital agency business. The bankruptcy will either mean a sad end to an exciting journalism company or the beginning of a new chapter.
Other news companies like Buzzfeed News have been hit by the lack of money being generated by online advertising, with Buzzfeed’s news department also declaring bankruptcy. Both companies would have been hit by rising Federal Reserve interest rates that is throttling funding.
“This climate coupled with a difficult equity raising environment due to higher rates is taking some of the smaller players out to pasture,” Thomas Hayes, chairman at investment firm Great Hill Capital told Reuters.