Vice Media, the digital company once valued at nearly $6 billion, filed for Chapter 11 bankruptcy Monday. After launching as a magazine 29 years ago in Montreal, the startup expanded, launching a flagship website and acquiring the Virtue ad agency, Pulse Films and the women-focused Refinery29. Vice’s businesses will continue operations throughout the bankruptcy process, which includes a sale to take place within 55 days. Vice lenders including Fortress Investment Group and Soros Fund Management have joined forces to acquire the company, submitting a bid of $225 million and agreeing to assume “substantial debt.”

The purchase bid is primarily covered by existing loans. Vice’s bankruptcy petition, filed in U.S. Bankruptcy Court for the Southern District of New York, lists $834 million in debt. The lenders have wrangled a new $20 million loan to continue operating the company while fishing around for a better deal. If one does not emerge, the Fortress-Soros faction will acquire Vice Media.

The company enjoyed outward success for several decades, and was among the largest global media firms serving the youth market, with 35 offices worldwide. Profits remained elusive, however, with a business model reliant on social media. But it was the major tech companies themselves that wound up with the bulk of digital ad dollars Vice aimed for.

The New York Times reports that “the dreams that Vice executives once had of a stock market debut or a sale at an eye-popping valuation have been wiped away.”

Vice’s implosion comes in the wake of struggles by other digital media firms, including BuzzFeed, which recently shuttered its news operation. Vox Media, while reportedly profitable, has had layoffs and an investor reshuffling, raising funds at about half its 2015 valuation.

“The harsh realities of digital publishing caught up with Vice, and things went sideways,” NYT writes, explaining that “in 2017, the company raised $400 million from the private equity firm TPG in a deal code-named ‘Project Venus’ that valued the company at $5.7 billion. But the cash infusion saddled Vice with financial obligations if it didn’t hit aggressive profitability targets, and it eventually became an albatross for the company.”

“This accelerated court-supervised sale process will strengthen the company and position Vice for long-term growth,” co-CEOs Bruce Dixon and Hozefa Lokhandwala wrote in a statement summarized by NPR, which says Vice “intends to keep paying its remaining employees and vendors throughout the process and to keep top management in place.”

“We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at Vice,” the statement continued.

Related:
How ZIRP Phenomenon Vice Lost Its Grip, Financial Times, 5/16/23
Vice Files for Bankruptcy, the Latest Digital-Media Pioneer to Fall, The Washington Post, 5/15/23