Multi-platform media company Vice has filed for Chapter 11 bankruptcy in the Southern District of New York due to the sudden and unforeseeable impact of Covid-19 on its business. The company’s assets and liabilities are said to be worth between $500m to $1bn, and it reportedly has over 5,000 creditors. Vice, known for its edgy journalism, has undergone a series of cost-cutting measures, including shutting down several sectors, ending flagship program Vice News Tonight, and laying off over 100 employees in its workforce. However, Co-Chief Executive Officers Bruce Dixon and Hozefa Lokhandwala claim that the “accelerated court-supervised sale process” will create opportunities for growth and help preserve the brand’s “authentic journalism”.
The filing comes as other media companies have shut down or announced layoffs, including BuzzFeed News and Gannett. Vice, in particular, reportedly had a debt of $834m, and although it had attempted to secure a loan of $30m in February from the Fortress Investment Group, it struggled to return a profit in recent years. The company was valued at $5.7bn in 2017, but today it is estimated to be worth significantly less.
Despite the bankruptcy filing, Vice’s various assets and brands, including Vice, Vice News, Vice TV, Vice Studios, Pulse Films, Virtue, Refinery29, and i-D, will operate as normal, and international entities and Vice TV’s joint venture with A&E are not included in the Chapter 11 filing. The unsupervised sale process will allow Vice to simplify its capital structure and operate without the “legacy liabilities that have been burdening” its business.
Overall, Vice Media’s bankruptcy filing reflects the ongoing struggles of media companies in an industry that has been significantly impacted by the current pandemic and the changing nature of media consumption. Nonetheless, with debtor-in-possession financing secured from investors for up to $135m, Vice remains hopeful about its future prospects.
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