Latest reports suggest that a rescue plan is being worked out for Vice Media Group, which last week was revealed to be on the verge of bankruptcy. Under the terms of the proposed deal, the company would be worth $300-$400 million – less than a tenth of its peak valuation in 2017. VMG has been looking for a potential buyer for the last year – and had been hoping to achieve a valuation of around $1.5bn.
The proposed rescue plan will see VMG file for Chapter 11 bankruptcy protection, then sell itself to investors including Fortress Investment Group and Soros Fund Management. Shareholders, including James Murdoch, would likely be wiped out in the process. One key aspect of the new structure is that Fortress intends to find a role for Vice’s flamboyant co-founder Shane Smith, who is currently executive chairman.
It’s too early to say what VMG will look like when it emerges from its current round of restructuring. Having started out as a digital first enterprise, recent years have seen the company expand into film and TV production, and launch a creative agency Virtue. At time of writing the company’s website says that the business is creating around 2400 pieces of content a week in 25 languages. Aside from the Vice brand, key divisions within the company include Refinery29 and i-D, a cult fashion magazine that has sought to reinvent as a 360 degree media platform for the digital age.
2023 has been a tough year so far for digital media firms – which have struggled with the weak ad market. BuzzFeed, which has also been struggling to build a sustainable business model, recently closed its popular BuzzFeed News operation. BuzzFeed’s share price spiked in January 2023, but is currently trading at historic lows.
