Vice is said to be headed for bankruptcy

Vice, the brash digital media disruptor that charmed giants like Disney and Fox into investing before a stunning crash landing, is preparing to file for bankruptcy, according to two people with knowledge of its operations.

The filing could come in the coming weeks, according to three people familiar with the matter who were not authorized to discuss the potential bankruptcy filing.

The company has been looking for a buyer, and may still find one, to avoid declaring bankruptcy. More than five companies have expressed interest in buying Vice, according to a person briefed on the discussions. However, the chances of that are getting smaller and smaller, said one of the people with knowledge of the potential bankruptcy.

A bankruptcy filing would be a bleak coda to the tumultuous history of Vice, a new media interventionist who sought to replace the media establishment before persuading it to invest hundreds of millions of dollars. In 2017, after a round of funding from private equity firm TPG, Vice was worth $5.7 billion. But today, by most accounts, it’s worth a tiny fraction of that.

In the event of a bankruptcy, Vice’s biggest debt holder, Fortress Investment Group, could end up controlling the company, one of the people said. Vice would continue to operate normally and run an auction to sell the company over a 45-day period, with Fortress in pole position as the most likely buyer.

Unlike Vice’s other investors, which have included Disney and Fox, Fortress has senior debt, meaning it will be paid out first in the event of a sale. Disney, which has already written down its investments, is not getting a return, the person said.

“Vice Media Group has been engaged in a comprehensive evaluation of strategic options and planning,” Vice said in a statement Monday. “The company, its board and stakeholders continue to be focused on finding the best path forward for the company.”

Vice began as a punk magazine in Montreal more than two decades ago. Over the years, it blossomed into a global media company with a film studio, an advertising agency, a glossy show on HBO and agencies in far-flung world capitals. Disney, after investing hundreds of millions in Vice, explored buying the company in 2015 for more than $3 billion, according to the two people familiar with the talks.

The deal never materialized, and Vice eventually succumbed to a bearish market for digital media companies. The company has tried for years to make a profit, but has consistently failed to do so, losing money and repeatedly laying off employees.

Last week, Vice told employees it was ending Vice World News, a global reporting initiative that covered world conflict and human rights abuses. The shutdown of the world news operation was a blow to employees who saw the division’s aggressive coverage as in keeping with Vice’s roots in gonzo journalism, established when co-founder Shane Smith would report from risky destinations like North Korea.

As it has sought a buyer in recent months, Vice has dealt with turnover in its leadership ranks. Nancy Dubuc, the company’s former CEO, left this year after nearly five years with the company. Jesse Angelo, the company’s global president of news and entertainment, also left the company.

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