VICE Collapse And Bankruptcy

Once a multi-billion dollar company, VICE Media Company was once one of the hottest names in New Media. Just a few years ago, they had a multi-billion dollar valuation. They really did push the boundaries; they were sort of fearless in their reporting. It brought this whole new way of approaching a subject and really challenged what other media houses did. So why weren't they successful?
If you were tuned to pop culture in the 2010s then you know it was impossible to escape Vice, the Canadian-American company that's been at the forefront of entertainment and journalism for years. This company was behind iconic documentaries like Fyre the greatest party that never happened, which exposed the infamous Fyre Festival, and Make The World Greta Again which followed climate activist Greta Thunberg.
Being at the cutting-edge of journalism Vice Media was a hot corporate property. In the same decade, Vice saw hundreds of millions of dollars in investment from the 21st Century Fox, TPG Capital and A&E Networks. Now just a few yeas of these decade-defining creative wins and financial backings, Vice has filed for Chapter 11 bankruptcy. This comes months after the company canceled several projects already in development and laid off staff.
So what went wrong? How could a company that was valued at $5.7 billion a few years ago be going bankrupt? And is there there any hope of recovering from this setback?

History

In 1994, Shane Smith, Suroosh Alvi, and Gavin McInnes from Canada received Canadian government funding for a magazine initially named Voice of Montreal, aiming to cover unconventional topics mainstream publications avoided, akin to Vice's present content. Renamed Vice, it quickly expanded globally.
By the turn of the century, Vice started turning its attention to other forms of media. Its formula had worked on print so they tried TV and online.

Vice in 2000s And Expansion

The 2000s will be remembered as a time when video ruled everything. MTV dominated the airwaves. The world developed a taste for Reality TV and more than ever, consumers wanted to watch their contents and not just read it. Vice saw the shift and in 2006 began working on establishing video mediums for itself. They teamed up with the biggest forces in pop culture, MTV and launched VBS TV, an online TV network which quickly gained following for its original documentaries like the Vice Guide to Travel and Epically Later'd which were about, well, edgy topics other mainstream platforms weren't covering. Think about documentaries on drug use in Colombia, the Suicide Forest in Japan, and the dictatorship in North Korea.
After getting its foot in the digital sector, Vice management decided that it was time to branch out to create more specific platforms for its different areas of interest. It was during this time that many of Vice-owned that we've all heard of came to be. Think of Vice News which was all about current events; Motherboard, which was all about tech and Noisy which focused on music.
Although Vice maintained its experimental nature, the diversification of content enabled it to attract broader audiences, offering options such as tech news alongside documentaries. Leadership changes occurred as the 2000s came to a close.
The years that followed saw Vice score some very powerful allies and launched projects that would solidify its place on the world stage.

Funding

2010 saw Vice change its business model a little bit. VBS TV, the online TV that had become a major part of its operations was shut down. Instead, Vice's documentaries were aired on its Youtube channel and website. Not only was Vice distributing its content in a new format, but also getting new funding. 21st Century Fox bought 5% stake for $70 million in 2013. A&E Network, owned by Disney and Hurst Corporation spent $250 million on a 10% stake on Vice the following year. In 2017, TPG Capital invested $450 million in Vice, most of which was to go to expansion. This brought the valuation to a mindboggling $5.7 billion.

Documentary Wins In The 2010s

During its heydays in the 2000s and the 2010s, Vice was known for its documentaries and was able to reach a wider audience thanks to its Youtube channels and partnership with major streaming networks. These were a mix of city underworlds that Vice had been covering for decades as well as topics with more mainstream appeal.
Take Fyre, The Greatest Party That Never Happened, a Vice documentary that aired on Netflix in 2019. What was supposed to be the hottest music festival in the world and Billy McFarland, the man behind it, had commissioned the biggest stars to promote it. It ended up being a dumpster fire event that captured the public's fascination which led to the Vice fronted documentary. It was a massive success getting positive reviews and becoming a hit with over 20 million viewers on the first month and scoring 4 nominations in the 71st Emmy Awards.
Other successes include Hate Thy Neighbor which followed the lives of controversial groups around the world and Make The World Greta Again, which followed Greta Thunberg just as she was rising to global recognition.

Launch OF Viceland

After VBS had been shut down in the early 2010s, the company rolled out Viceland in 2015, Vice's own TV channel. Walt Disney Corporation pumped an impressive $200 million in device to support the show and 30 shows were developed solely for Viceland.
Viewers were treated to more lifestyle content. Action Bronson presented a cooking show. Actor Elliot Page went around the world exploring LGBTQ culture, and feminist icon Gloria Steinem explored the lives of women all around the world.
While Viceland now goes by the name Vice TV, it's still going strong airing in the US, Canada France, Australia, New Zealand, Benelux and Israel.

The Beginning Of The End

By the mid 2010s, Vice seemed on top of the world. It had hundreds of millions of dollarsin investments, partnerships with mega corporations like Netflix and HBO and content that its audience seemed to eat up.
In retrospect, it wasn't a single thing that caused the company to fail, but a combination of market changes and internal issues, poor finacncial management and some good old bad luck.

• Trouble With Disney - One of the first signs of trouble came in 2019 from Disney. Keep in mind that up until now, Disney had been one of its biggest backers. Not only did they have a 10% stake in Vice through A&E Networks, but after it bought over 21st Century Fox, it got another 6% stake; a 16% stake in Vice Media in total. This sizeable stake cost Disney over $400 million that it was hoping to recoup. But in 2019, Disney essentially wrote off the investment and declared it worthless. Just a year before, the company wrote down the value of the investment to $157 million before eventually giving up in getting any of its money back.
• Sexual Harassments Lawsuit and Toxic Workplace Allegations - One of Vice's biggest scandals had to do with its now former president Andrew Creighton. In December 2019, the New York Times published a scathing report alleging that there had been 4 different settlements within Vice toward employees who had suffered harassments or defamation and once this report went live the floodgates were open. 20 other women came forward with their accounts of being harassed or witnessing misconduct taking place at vice. A company that had once been the voice of culture was now being accused of running a toxic workplace. Its management bowed its head in shame with Shane Smith and Suroosh Alvi admitting they had failed to provide a safe and inclusive work environment. The company announced that Creighton was taking a temporary leave while the allegations were investigated and he eventually stepped down later that year. It also fired its Chief Digital Officer Mike Germano.
• Leadership Changes - With Creighton out of Vice, more leadership changes were soon to come. Shane Smith, who had been at the helm of the company since its early days in Canada, announced that he was stepping down as CEO and was succeeded by former A&E Network CEO Nancy Dubuc. Her priority was making Vice profitable again. Digital revenue to new media companies had been disappointing and she wanted to turn things around. Her approach was to trim Vice's workforce and to get even more funding. The company got $250 million in investments in 2019 and laid off 150 staffs the following year. It also made a notable acquisition of Refinery29, a website that is very popular with women and could bring a new audience to Vice's content. The deal was reportedly worth $400million and brought Vice's valuation to $4 billion.
• Decline in Profits - The reason Vice saw a decline in the 2010s and is now filed for bankruptcy was due to 2 things. Firstly, the company was spending way too much money. Secondly, viewers shifted to social media for content and so did ad revenues.

Bankruptcy Filing And Planned Sale

Nancy Dubuc announced she was leaving in February 2023 after the company had failed to turn around its fortunes. She would be replaced by Bruce Dixon and Hozefa Lokhandwala who would work as co-CEOs. In April 2023, Vice announced that it would cancel its iconic Vce News Tonight show and would lay off dozens of its employees. Barely a week after the layoffs were confirmed, New York Times reported that Vice would be filing for chapter 11 bankruptcy and was looking to sell itself. In August, it was bought by Fortress Investment Group and Soros Fund Management for $350 million. This was a mere fraction of the $5.7 billion it was once valued at. The company listed assets between $500 million - $1 billion . It also listed a number of debts including $476m owed to the Fortress Investment Group. One of its former reporter, Joseph Cox, took to twitter to reveal that while many of its staff were struggling with the layoffs the company was paying huge bonuses to its executives.

Moving On

After a decade of being a force of New Media, Vice is now facing one of its biggest challenges yet. Even with its new ownership, Vice still has to turn its fortunes around if it wants to exist in the next decade and beyond. Even if Vice curbs its spending it still needs to binging money to stay afloat. Media companies with Vice's business model have not been having easy times adapting to changing consumer trends and capturing ad revenues.