The US media group Vice Media filed for bankruptcy on Monday due to reduced advertising revenue. A consortium of lenders that includes Vice’s main creditor, Fortress Investment Group, Soros Fund Management and Monroe Capital, will take control of the group for $225 million (about €207 million at current exchange rates), according to a statement released Monday Explanation . The group ensures that it remains active throughout the sales process.
It began almost three decades ago as an alternative magazine in Montreal, Canada, capturing the attention of young viewers around the world with documentary videos. It tells the news in a more irreverent way, boasting to advertisers that it better connects with young people and is an alternative to traditional media.
Vice Media Group was valued at $5,700 million in 2017 from a $450 million investment by TPG Capital, but never went public and was involved in a sale of the entire company. The group produces content in 25 languages and has more than 30 offices around the world. These include Vice News, Motherboard, Refinery29, Pulse Films, Vice TV and advertising agency Virtue, among others. Access to their media is free and they rely on advertising to generate revenue.
In February, Vice announced that Nancy Dubuc was leaving the company after five years as CEO, and in late April the company shut down its main newscast and laid off more than 100 employees. Vice News Tonight began as a news show on HBO in 2016 and won recognition and awards in 2017 for its coverage of a white supremacist protest in Charlottesville, Virginia. HBO ended the collaboration in 2019 and the show moved to Vice TV, the group’s cable network.
The consortium of creditors would pay that $225 million for the company’s assets through debt forgiveness “in addition to assuming significant debt at the time of closing.” The group’s major shareholders, including TPG Capital and Disney, will lose their investment.
This bid by the creditors sets a minimum price for the company, which, however, can be exceeded by other bidders if they occur. If one or more qualifying bids are submitted, the bankruptcy court will organize an auction to determine the highest and most valuable bid.
The lenders will also contribute more than $20 million in cash to fund the company throughout the sale process. “Vice anticipates that this financing, as well as cash generated from ongoing operations, will be more than sufficient to fund the Company throughout the sale process, which the Company expects to complete over the next two to three months,” the statement said the explanation.
Documents presented to the court show that the company has between 5,000 and 10,000 creditors and that its debts range from $500 to $1,000 million. A total of 32 companies have accepted insolvency protection. Fortress is the main creditor at $475 million, followed by Thomas Benski and Marisa Clifford at $21 million; JPMorgan with 10 million and Wipro with another 10 million. CNN, HBO, EY and Horizon Media are also on the list of creditors.
The company expects to continue paying wages and benefits to its employees on an uninterrupted basis and paying vendors and subcontractors under normal conditions. He also assures that the managers who led the company into bankruptcy will continue to lead the company: “Our managers are here for the long term. They are actively involved in the management of the company and will continue to be so,” said Vice.
Bruce Dixon and Hozefa Lokhandwala, co-CEOs of the company, said in the statement that “this accelerated sale process under court oversight will strengthen the company and position Vice for long-term growth.” “We will have new ownership, a simplified capital structure and opportunity to operate without the legacy liabilities that have weighed on our business. We look forward to completing the sale process over the next two to three months and beginning a healthy and prosperous next chapter at Vice.”
Vice’s bankruptcy is the latest of several digital channels aimed at young audiences. BuzzFeed shut down last month, Vox is downsizing, while new app-based platforms like TikTok continue to attract younger audiences.
Billionaire buys Forbes list
One of the billionaires featured on the Forbes list bought the publishing group and with it the list, which ranked it 1,818 in the 2022 edition before being omitted in the 2023 edition. Austin Russell, Founder and CEO of Luminar announced Friday the signing of a definitive agreement to acquire a controlling interest in Forbes Global Media Holdings, a transaction that values the company at nearly $800 million.
Upon closing of the transaction, Russell will control an 82% stake in the company that controls the global media platform and return ownership to the United States. The seller is Hong Kong-based Integrated Whale Media Investments (IWM).
Russell has been featured in Forbes several times, including being on the cover as the youngest self-made billionaire and one of America’s biggest charitable donors. The new owner assures that he will not be involved in the day-to-day management of the company, but that the company will delegate powers to a new council composed of American experts in communications media, technology and artificial intelligence.
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