NEW YORK -- Vice Media is filing for Chapter 11 bankruptcy protection, the most recent digital media company to falter after a meteoric rise.
Vice said Monday that it has agreed to sell its assets to a consortium of lenders -- Fortress Investment Group, Soros Fund Management and Monroe Capital -- in exchange for US$225 million in credit. Other parties will be able to submit bids as well.
The company expects the sale to conclude in the next two to three months. During the process, Vice's media brands will continue to produce content and the company will keep paying its employees and vendors, according to a Monday press release.
In a prepared statement, Vice co-CEOs Bruce Dixon and Hozefa Lokhandwala said the "accelerated court-supervised sale process" will strengthen the company and position it 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 assets and liabilities worth between US$500 million and $1 billion, according to Monday's filing.
The bankruptcy filing arrives just weeks after the company announced it would cancel its flagship "Vice News Tonight" program amid a wave of layoffs expected to impact more than 100 of the company's 1,500-person workforce, the Wall Street Journal reported. The company also said it would end its Vice World News brand.
There has been a wider surge of media layoffs and closures, including job cuts at Gannett, NPR, the Washington Post and other organizations. In April, BuzzFeed Inc. announced that its Pulitzer Prize-winning digital media outlet BuzzFeed News was being shut down as part of a cost-cutting drive by its corporate parent.
Digital advertising has plummeted this year, cutting into the profitability of major tech companies from Google to Facebook.
"One of the things that I think really hurt Vice, and in turn BuzzFeed as well, is social media networks like Facebook changing their algorithms," Jason Mollica, professor at American University's School of Communication, said -- noting that social media was once a space that Vice thrived. "When you're not pulling in the numbers that you would expect advertising-wise, you're losing money."
Beyond advertising and the shifting digital landscape, Mollica also pointed to the changing habits of news consumers today -- and challenges that media companies across the industry face as they try to reach audiences.
"It comes down to advertising, but it also comes down to relatability to what your audience is looking for," Mollica said.
Vice Media's roots date back to 1994, with the launch of Vice's original punk magazine in Montreal. Vice soon moved to New York and built itself into a global media company.
Over the years, Vice developed a reputation for in-your-face journalism that covered daring stories around the world that particularly resonated with new, young audiences across digital platforms. The media company's assets also include film and TV production, an in-house marketing agency, and brands such as Refinery 29 and Unbothered.
The media company has struggled to turn around profits in recent years. Monday's filings show that Vice has total outstanding debt of US$834 million.
In 2017, Vice was valued at US$5.7 billion. Now, however, most experts estimate the company is worth just a fraction of that, The New York Times reported earlier this month.
Monday's bankruptcy filing arrives just months after Nancy Dubuc announced that she would be stepping down as CEO of the company. Vice named long-time Vice executives Dixon and Lokhandwala as co-CEOs.
Dubuc replaced Vice co-founder Shane Smith in 2018, a turbulent time at Vice after a 2017 Times investigation uncovered rampant sexual harassment and misconduct at the company.
