It's been an extremely tumultuous few weeks and months for many in the news media world. Fragmented audiences and the failure to find a sustainable economic model have forced a growing number of firms to downsize or close as Jonny Walfisz reports.
This week, Vice Media filed for Chapter 11 bankruptcy, potentially spelling the end of one of the most notable youth-oriented news organisations.
In April, the Pulitzer Prize-winning digital media outlet Buzzfeed News announced it was shutting down as part of a cost-cutting drive by its parent organisation. That same day, Insider laid off 10 per cent of its staff. The month prior, independent British media outlet gal-dem announced it was ceasing publication for financial reasons.
When news came through earlier this month that Vice Media might file for bankruptcy, there were fears another of the big new media giants was about to go a similar way. However, as the company officially files for Chapter 11 bankruptcy, deals are in the works to buy it out of its debt.
Masters of the universe
A consortium of lenders - Fortress Investment Group, Soros Fund Management and Monroe Capital - is buying Vice for about $225 million, in addition to taking on a significant amount of the company's debt. Other parties will be able to submit bids as well.
Vice said it expects the sale to be wrapped up in the next two to three months. It said that during the process its media brands will continue to produce content and the company will keep paying its employees and vendors.
Vice Media's roots date back to 1994, with the launch of Vice’s original punk magazine in Montreal. Vice soon moved to New York and built itself into a global media company.
Over the years, Vice developed a reputation for in-your-face journalism that covered daring stories around the world that particularly resonated with new, young audiences across digital platforms. The media company’s assets also include film and TV production, an in-house marketing agency, and brands such as Refinery 29 and Unbothered.
The media company has struggled to turn around profits in recent years. Monday's filings show that Vice has total outstanding debt of $834 million.
In 2017, Vice was valued at $5.7 billion. Now, however, most experts estimate the company is worth just a fraction of that, The New York Times reported earlier this month.
Monday's bankruptcy filing arrives just months after Nancy Dubuc announced that she would be stepping down as CEO of the company. Vice named longtime Vice executives Dixon and Lokhandwala as co-CEOs.
Dubuc replaced Vice co-founder Shane Smith in 2018, a turbulent time at Vice after a 2017 Times investigation uncovered rampant sexual harassment and misconduct at the company.
Digital advertising has plummeted this year, cutting into the profitability of major tech companies from Google to Facebook.
“Advertising is down across the board, so it’s a test for a lot of the digital publications,” Megan Duncan, assistant professor at Virginia Tech's School of Communication, told The Associated Press.
Duncan and others also noted the changing landscape of social media - a space where outlets like Vice once thrived in terms of reaching audiences.
“One of the things that I think really hurt Vice, and in turn BuzzFeed as well, is social media networks like Facebook changing their algorithms,” Jason Mollica, professor at American University’s School of Communication, said. “When you're not pulling in the numbers that you would expect advertising-wise, you're losing money."