Vice Media Group has filed bankruptcy in preparation of sale to a consortium of lenders. The digital media company that once held a valuation of $5.7B filed Chapter 11 at the U.S. Bankruptcy Court for the Southern District of New York on Monday.
Over the years, financial troubles loomed for Vice Media in the form of a weakened economy and constant competition with tech companies for ad dollars, an experience that other digital news media properties have been forced to navigate without a modern blueprint to reference. Not too long ago, Buzzfeed News had to go dark because of a less than impressive valuation.
AI cheat codes and surging grassroots entities also congested the digital media space causing the market to become oversaturated. Vice Media attempted to stop the bleeding with cost cutting strategies, but they did little to alleviate the daily financial pressures of sector.
Through the bankruptcy, Vice Media seeks reorganization to appease lenders, Fortress Investment, Monroe Capital, and Soro’s Fund Management, as the next-gen company faces an outstanding debt of more than $834M. A substantial portion of the debt is owed to several business partners, such as Refinery29 and Wipro.
The lenders have proposed a $225 million bid for the company, which would come with various assets, including Virtue, Pulse Films, Vice Studios, and Vice Distribution, to name a few. The Chapter 11 filing will not disrupt Vice Media’s operations throughout the sale thanks to a $20M infusion of cash by the lenders.
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