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Home / Business / Disney says it's more than $ 400 million. Vice investment is now worthless

Disney says it's more than $ 400 million. Vice investment is now worthless



A few years ago, large media companies fell over themselves to invest in Vice Media. Disney made the biggest effort by putting over $ 400 million into the winding digital publisher.

Now, Disney says that all the money it has put into Vice has been burned: In investor filings on Wednesday, Disney no longer said it would get any return on the investment in Vice – a company that at one time was worth $ 5.7 billion.

Vice is still worth something, in some investors' eyes. Last year, a group of lenders said they put a new $ 250 million round in the company.

But Disney's accounting decision is another example – perhaps the most amazing – of turnabout we've seen in digital media over the past few years. Investors have decided that high-flying publishers who once safely explained that they had created a new media paradigm are now worth very little … or even less.

Here is a partial roll call known to some of you:

  • Mic, which increased more than $ 60 million, sold for less than $ 5 million late last year.
  • Mashable, which was valued at around $ 250 million in 2016, sold for less than $ 50 million in 2017.
  • The properties previously known as Gawker Media, plus onions and elsewhere, only sold at a price which is probably below $ 50 million ; Univision, the TV conglomerate that sold them, had paid $ 135 million for the Gawker sites alone in 2016.
  • We don't (yet) know the value of Comcast, which puts $ 600 million to Vox Media (who owns this site), and BuzzFeed in recent years, now believe the two publishers are worth. But there is a reasonable effort that Comcast believes they are worth less than it believed in 2015.

All these companies have different stories and different information. The review is that a few years ago, everyone was confident that they would shoot up in value because they knew how to reach the young audience by exploiting the great technology platforms – especially Facebook and Google. [19659011] Instead, Facebook and Google have raised most of the digital advertising revenue – the money the new publishers expected to get when they reached the scale. And publishers who had expected Facebook and Google to trust them for content have learned that Facebook and Google don't really need them.

Here's the Disney / Vice information: Disney told investors Wednesday that it had deleted $ 353 million of the money it had previously set aside. It followed an announcement this fall that Disney had turned down the value of its Vice investment by $ 157 million .

Disney refused to comment. But a small language course in Disney's quarterly Wednesday says: Disney describes $ 353 million "write-down". It took Vice as a "depreciation" – which in accounting speech means that there is nothing left to get rid of after this. It's completely gone.

Per Investopedia: "An impairment loss becomes an impairment if the entire balance of the asset is eliminated and removed from the books altogether."

If you've done the math, you'll notice that $ 353 million plus $ 157 million is $ 510 million – well over $ 400 million Disney invested directly in Vice.

Since Disney does not want to comment, we assume that the additional amount includes Vice investments that Disney owned through A & E, the TV programmer that Disney owns with Hearst, who also supported Vice; as well as $ 70 million that 21 Century Fox dropped to Vice. That stake went over to Disney earlier this year when Disney bought a good portion of the Fox Empire.

One last warning: You can't say that Disney says Vice Media is not worth anything at all – just as Disney thinks the investment won't be worth anything. There is a difference with a difference for some Vice investors, who have deals that allow them to get their money from the company, on sale, before other investors.

In any case, Vice is definitely worth much less than Disney and many other large, sophisticated media companies recently thought. And while Disney doesn't feel good about losing money at Vice, it'll be pretty happy that it didn't pay billions for it all – an idea that seemed very plausible as recently as 2016.

Vice is meanwhile trying to overtake even led by CEO Nancy Dubuc, who took over the founder Shane Smith a year ago. Dubuc has been keen to clean up the company's books, as well as internal ethos.

Vice and Smith, the company's leader, used to save themselves in a pirate person. But now, in the #MeToo era, the company has complained about a "harmful" boy club culture that promoted inappropriate behavior that permeated through the entire business. "

Here is a comment on Wednesday's economic news from a vice-spokesperson: [19659022] Vice is firing on all cylinders and on the goal of meeting, if not exceeding, its financial targets for the third straight quarter. the new management team is underway, and with the recent capital growth, we will continue to invest in the long-term growth of our five global businesses – TV, studio, digital, news and advertising agency Virtue – which the media industry consolidates and fewer players control information and entertainment like the world Consumer, Vice will always be there with a megaphone for more than half of the people on this planet under the age of 30 who want independent world-class content.


Recode and Vox have teamed up to uncover and explain how our digital world is changing – and change us Subscribe to Recode podcasts to hear Kara Swisher and Peter Kafka lead the tough technology technology calls the look needs today.


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