Vice Media files for bankruptcy after years of financial difficulties to help facilitate sale weeks after announcing round of ‘painful’ layoffs
- It comes amid a challenging period for several technology and media companies
Vice Media Group, popular for websites such as Vice and Motherboard, filed for bankruptcy protection on Monday to engineer its sale to a group of lenders, capping years of financial difficulties and top-executive departures.
Vice said that the lender consortium, which includes Fortress Investment Group, Soros Fund Management and Monroe Capital, will provide about $225 million in the form of a credit bid for substantially all of the company’s assets and also assume significant liabilities at closing.
Under a credit bid, creditors can swap their secured debt, rather than pay cash, for the company’s assets.
The company listed both assets and liabilities in the range of $500 million to $1 billion, according to a court filing.
Vice said that it received commitments for debtor-in-possession financing from the lenders, as well as consent to use more than $20 million in cash, which it said will be ‘more than sufficient’ to fund its business throughout the sale process.
The Headquarters of Vice is pictured on the day it is reported the media company is headed towards bankruptcy, May 2, 2023
The bankruptcy filing comes amid a challenging period for several technology and media companies, as they resort to downsizing in recent months due to a turbulent economy and weak advertising market.
Vice was among a group of fast-rising digital media ventures that once commanded rich valuations as they courted millennial audiences. It rose to prominence alongside its co-founder, Shane Smith, who built his media empire from a single Canadian magazine.
In April, the company said it would cancel popular TV program ‘Vice News Tonight’ as part of a broader restructuring that would result in job cuts across the digital media firm’s global news business.
‘In response to the current market conditions and business realities facing VMG and the broader news and media industry, we are moving forward on some painful but necessary reductions, primarily across our News business,’ co-CEOs Bruce Dixon and Hozefa Lokhandwala said.
They did not specify the exact number of layoffs, but according to CNN, ‘dozens’ would be affected.
Last month, BuzzFeed Inc said it would shutter its news division, which was renowned for its irreverent and probing coverage, but ultimately succumbed to the challenges of its digital-first business model.
Chief executive Jonah Peretti announced the shutdown in a memo to employees on Thursday morning, amid news that the company plans to cut 15% of its workforce.
‘While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization,’ Peretti said.
‘We’ve faced more challenges than I can count in the past few years,’ he continued. ‘Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.’