The US media group Vice said on Monday filed for bankruptcy to facilitate its salean announcement that the market had been waiting for a few weeks.
failure it will not disrupt daily business operations of Vice, which in addition to its main website includes the Virtue advertising agency, the Pulse Films division and Refinery29, a site focused on women acquired by Vice in 2019.
A group of deputy lenders, including Fortress Investment Group and Soros Fund Management, are at the forefront of getting the company out of bankruptcy. The group presented an offer of 225 million dollars, which would be covered by its existing loans to the company. It would also assume “significant responsibilities” from Vice after any deal closes.
Then follows a sales process. The creditors got it a loan of 20 million dollars continue to run Vice and then, unless a better offer emerges, the group that includes Fortress and Soros will acquire Vice.
The value
However, the dreams Vice executives once had of a public debut or sale at a spectacular valuation have been dashed. The company was believed to be worth $5.7 billion.
Investments by media giants like Disney and financial investors like TPG, which have spent hundreds of millions of dollars, will lose value in the bankruptcy, solidifying Deputy status among the most famous wrong bets in the media industry.
Like some of his peers in the digital media industry, including BuzzFeed and Vox Media, Vice and his investors bet big on the growing power of social networks like Facebook and Instagramanticipating that they would generate a wave of rising young readership that advertisers craved.
Even as readers flocked in by the millions, new media companies they had difficulty profiting from itand most of the money from digital advertising went to major technology platforms.
BuzzFeed last month closed its Pulitzer Prize-winning news division after going public at a fraction of its previous valuation, and Vox Media earlier this year raised funds at about half its 2015 valuation.
“There is definitely some common ground in the challenges media organizations face, and Vice is no exception,” said Mitra Kalita, founder and publisher of Epicenter-NYC, a community journalism firm based in the Queens borough of the City of New York. York. “We now know that a brand tied to social media only for its growth and audience is not sustainable.”
Filing for bankruptcy will give the company some relief from its burdensome debt as its lenders, including Fortress, try to bail out their investments. Vice Media took out a $250 million loan from Fortress and Soros Fund Management in 2019 as it struggled to turn a profit. You’ve been in default on that loan for months.
Bankruptcy is a humiliating experience for Vice, which a decade ago looked set to either sell for a dizzying price or make its public debut. In the 2010s, Vice raised a lot of money from traditional media companies, which it had criticized for becoming complacent.
towards young people
The company has convinced advertisers and investors of its ability to reach millennials who longed for an alternative to their corporate rivals, deliver dispatches from North Korea and Liberia without the decorum of the mainstream media.
But the harsh reality of digital publishing has caught up with Vice and things have gone awry. In 2017, the company raised $400 million from private equity firm TPG in a deal dubbed “Project Venus” that valued the company at $5.7 billion. But the cash injection saddled Vice with financial obligations if it didn’t meet aggressive profitability targets, eventually becoming a drag on the company.
In the same year, the New York Times and other media published investigations into allegations of sexual harassment at the companywhich sparked a crisis in Vice that shook confidence in its management.
The situation got worse last month. The company laid off employees after Antenna stopped paying Vice for a manufacturing contract worth hundreds of millions of dollars. The cuts have included employees at Vice World News, the company’s global reporting initiative, after it became clear those efforts they were no longer financially viable.
The New York Times
Source: Clarin
Mary Ortiz is a seasoned journalist with a passion for world events. As a writer for News Rebeat, she brings a fresh perspective to the latest global happenings and provides in-depth coverage that offers a deeper understanding of the world around us.