Vice and Motherboard, the websites known for their unique content, are facing financial difficulties and have initiated bankruptcy proceedings in the United States. As part of the restructuring process, the company is expected to be acquired by a consortium of its lenders.
Vice Media Group, formerly valued at $5.7 billion, is now facing the possibility of being acquired for $225 million. Despite this financial setback, the youth-focused digital publisher has confirmed that it will continue its operations uninterrupted throughout the bankruptcy proceedings.
The company expressed optimism and stated that it anticipates emerging as a financially robust and more resilient organization within a span of two to three months.
Originally established in 1994 as Voice of Montreal, a niche magazine by Shane Smith, Gavin McInnes, and Suroosh Alvi, Vice has grown significantly and currently operates in over 30 countries.
Vice enthralled its audience with its daring, youth-centric content across a wide range of mediums, including print, events, music, online platforms, television, and feature films.
Among the investors backing Vice Media Group are Fortress Investment Group, Monroe Capital, and Soros Fund Management. The latter is the investment firm established by renowned fund manager and billionaire George Soros.
To ensure the continuity of Vice Media throughout the bankruptcy process, the lenders have granted approval for $20 million in funding. Meanwhile, the company has opened the opportunity for other firms to submit “higher or better” bids, providing the possibility of alternative offers for the media company.
In the event that alternative offers do not succeed, Vice Media’s lenders will proceed with the acquisition of the publisher for $225 million.
Over the past few years, the company has faced stagnant revenues and challenges in achieving profitability.
Additionally, Vice’s attempts to go public through a merger were unsuccessful.Recently, the company faced setbacks, including the discontinuation of its flagship TV program, leading to announced layoffs last month.
In a parallel development, BuzzFeed, another online platform, has recently revealed plans to shut down its news division and initiate layoffs affecting 15% of its workforce. These actions come as a response to significant financial difficulties and a decline in advertising revenue experienced by the company.