Why is Vice Media going bankrupt? Chapter 11, layoffs, latest news

Vice Media has filed for Chapter 11 bankruptcy in the United States. The bankruptcy was reported by multiple media outlets, including Vice’s Motherboard website. The bankruptcy of Vice is something that would have been thought impossible a few years ago when the youth-focused media brand was valued at $5.7 billion. Here’s what you need to know:

• What’s happened? Vice Media filed Chapter 11 bankruptcy early today in the U.S. Bankruptcy Court for the Southern District of New York. The filing comes during a hard time for new media properties in particular. Last month, BuzzFeed made headlines when it announced the shuttering of its news division. Like BuzzFeed News, Vice was a popular source of news and information for younger generations and it dominated the millennial market in the 2010s, leading to major investments by old-media companies and ever-higher valuations.
• Is Vice’s bankruptcy unexpected? Not really. For months it has been reported that Vice was looking for a new buyer and was saddled with debt. But last week, the Wall Street Journal reported a consortium including Fortress Investment Group and Soros Fund Management would make a $400 million offer to buy Vice out of bankruptcy. That reporting now turns out to be correct, though Vice may not sell to the group for $400 million.
• How much could Vice sell for? The current figure, according to Vice, is $225 million—well below the initial figure reported last week. The $225 million sum is a long way from Vice’s peak valuation just six years ago, when the company was valued at $5.7 billion and had backing from many major media giants, including Disney and Fox. It’s also possible that another bidder could emerge during the bankruptcy process, and if so, Vice may sell for more than the currently agreed $225 million.
• Will Vice continue to operate? Yes. According to the company’s press release, “All of VICE’s multi-platform media brands, including VICE, VICE News, VICE TV, VICE Studios, Pulse Films, Virtue, Refinery29 and i-D, will continue to produce and deliver award-winning content across platforms” during the bankruptcy filing.
• Will there be layoffs? That’s unknown for now. Weeks ago, Vice laid off over 100 employees when it shuttered its Vice News Tonight television program and Vice World News. Media companies, along with tech, have been hit hard by layoffs this year.
• How long will Vice’s bankruptcy process take? Vice says the entire process should take about two to three months to conclude. Vice has also obtained $20 million in financing from the consortium, so it can fund its business throughout the time it takes for the sale to complete.
• What happens after the process is complete? Vice and its properties will continue to operate under new ownership and without the debt the company is saddled with now. “This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms,” Vice’s co-CEOs, Bruce Dixon and Hozefa Lokhandwala, said in a statement. “We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business.”