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May 15, 2023updated 16 May 2023 12:10pm

Vice Media: From Murdoch money to bankruptcy in a decade

One analyst said Vice "never figured out a model at all".

By Bron Maher

Vice Media, which once promised annual revenue of $1bn and attracted eight- and nine-digit investments from the likes of Rupert Murdoch and Disney, has declared bankruptcy.

Here, two media analysts share their views on why Vice failed commercially – and we plot the major moments in Vice Media’s commercial history from the past decade.

Why did Vice go bankrupt?

Joseph Teasdale, head of tech on Enders Analysis’ media team, told Press Gazette the problem was “Vice never figured out a model at all”.

“Vice had a pitch – we know how to engage young people – but they never found a way to turn that pitch into a business,” Teasdale said.

“They tried digital advertising, sponsored content, creative agency work, TV production, but continually missed revenue targets and never hit sustained profitability.”

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Jim Bilton, managing director at Wessenden Marketing, drew attention to the role the tech platforms had in Vice’s financial downfall.

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“Despite some interesting and quite clever diversifications, the core business model is ad-driven, volume-driven and ultimately dependent on the big tech platforms to deliver audiences that Vice will never own themselves – the reverse of what the smarter legacy media companies are doing,” Bilton said.

“The bottom line is that the better legacy media organisations are actually much more agile, smarter and multi-dimensional than the ‘one trick pony’ Vice.

“Trusted brands, audience-appropriate content, quality independent journalism, tight management and common-sense should/must win in the long-term!”

Teasdale added that Vice, in common with Buzzfeed, had believed that their online content businesses would scale in a manner similar to the software and platform successes of the last decade.

“You invest up front, and if you grow users enough, your revenues will eventually vastly outstrip your costs. But journalism is a lot more of a widgets business than people thought: if you want people to keep coming to your site, you need to keep making content, and so you need to keep spending money. A news business like Buzzfeed or Vice could never enjoy the kind of margins a platform business like Facebook can.”

Vice’s bankruptcy comes weeks after Buzzfeed, another giant of the 2010s digital media scene, shuttered its dedicated news brand Buzzfeed News. Insider, another digital-native outlet now owned by Axel Springer, announced last month it was laying off 10% of US staff.

Teasdale said it was “hard to say exactly” why these rivals were all having trouble at the same time.

“Finding investors willing to fund an ‘extend and pretend’ strategy is harder now: the capital markets have tightened with higher interest rates; and there’s a domino effect, where investors or potential acquirers see the failure of a peer and shut their wallets,” he said.

“The most effective way these companies had of making money was pitching investors; that well has run dry.”

Timeline: The past decade of Vice Media

Vice was founded in 1994 as a countercultural magazine by Shane Smith, Suroosh Alvi and Gavin McInnes. McInnes, now better known as the founder of the far-right Proud Boys, formally left the company in 2008, having already drifted away from it.

The business relocated from its hometown of Montreal to New York in 1999 and to the Williamsburg neighbourhood, where it is still headquartered, in 2001. By 2013 the company was a growing journalistic force known for its unconventional gonzo-style reporting on topics like sex and drugs that were more mutely covered by the media at large.

2013

August: 21st Century Fox takes a 5% stake in Vice for a reported $70m, valuing the company at $1.4bn. The company reportedly has global revenue of around $175m.

November: Vice News passes the milestone of employing 100 journalists. The company has offices in 34 countries.

2014

March: Vice launches Vice News as a dedicated brand, hosted at news.vice.com. The UK launch team comprises 18 journalists. Shane Smith claims Vice is on course to bring in $1bn in annual revenue by 2016.

August: Vice begins publishing one of its most famous documentary series, “The Islamic State”, in which Medyan Dairieh embedded with ISIS for three weeks.

September: Vice agrees two $250m investments, one from Silicon Valley venture capital firm Technology Crossover Ventures and one from television group A&E Networks. Each investor gains a 10% stake in the company, giving Vice a valuation of $2.5bn.

It is at this time, Semafor would report almost a decade later, that Shane Smith allegedly sold $100m of his equity in Vice.

2015

September: Guardian live features editor Rebecca Nicholson becomes Vice UK’s editor-in-chief and the paper’s commissioning editor for culture, Jenny Stevens, becomes managing editor.

November and December: Disney makes two $200m investments in Vice, bringing its stake in the company to 10%, in addition to its indirect stake through A&E Networks, a joint venture with Hearst.

Also in November Vice and A&E Networks agree a deal that will see the media brand take over cable channel H2, which will be relaunched under the name Viceland.

2016

February: Viceland launches in the US under the creative direction of director Spike Jonze. Today branded Vice TV, Vice’s cable channel offered both news and lifestyle programmes.

The company announces in June that it plans to expand its broadcast network into 51 territories. Viceland launches in the UK in August.

March: Vice UK staff announce they have unionised and are seeking voluntary recognition from the company. The NUJ accuses Vice the next month of “old-fashioned union busting” tactics, and the effort is unsuccessful.

April: Vice News staff in the US announce they have tentatively agreed a union contract with management. The next year employees focusing on video at Vice Media also unionise. The different groups will ultimately unify as a single union in December 2021.

May: Vice News lays off 20 journalists in the UK and US. In a sign of how times have changed, Press Gazette reported at the time: “Mass lay-offs have become commonplace across the newspaper industry in the UK but are much rarer on new media brands.”

Shortly after the layoffs the company announces it is hiring former Newsnight deputy editor Neil Breakwell to be UK bureau chief. In October, Vice recruits eight broadcast journalists in the UK to staff its television projects in the country.

November: Vice News Tonight launches in the UK.

2017

June: Private equity firm TPG invests $450m in Vice for an approximately 8% stake, bringing the company’s valuation to an all-time high at $5.7bn. The brand also joins Snapchat Discover.

December: The New York Times uncovers four settlements “involving allegations of sexual harassment or defamation against Vice employees”, including the company’s president Andrew Creighton. The investigation also finds that more than 24 women said they had experienced or witnessed sexual misconduct at the company. Creighton leaves the company in October the next year.

Figures (published in 2020) for the financial year ending 31 December 2017 show revenue across the Vice UK businesses is up more than £10m year-on-year to £103m, producing a £169,000 profit (up from a loss of £7.6m the year before)

2018

January: Vice beefs up its sexual harassment and HR policies in the wake of the harassment scandal. Press Gazette reports the company has 300 employees in the UK.

March: A&E Networks’ Nancy Dubuc becomes Vice Media’s chief executive, succeeding Shane Smith. Her appointment is widely written up as an attempt to address a “boys’ club” atmosphere at the company.

April: Vice UK shares its pay gap figures, showing a 13% median gap between men and women and an 18.2% mean gap. BBC World News begins airing Vice News Tonight each weekend.

November: Nancy Dubuc predicts Vice Media would be profitable by the next fiscal year, and discloses that it had been profitable “a couple years ago, and then with all the expansion and investment, we made it not profitable”.

However, the same month Disney writes off $157m of its investment in Vice. Variety estimates the entertainment conglomerate owns a total 21% stake in Vice, with 11% directly held and the remainder held through A&E Networks. 

December: Accounts published in 2021 show that in the financial year ending 31 December 2018 Vice UK Ltd’s losses before tax had grown to £3.9m and turnover fell by a third to £17.3m.

2019

February: Vice cuts 10% of its global workforce of 2,500. The company says it hopes to “focus on growth areas like film and television production and branded content” and that it will stop organising departments by country, switching instead to an international business structure.

March: Vice UK staff launch second union recognition bid. Management this time recognise the union in July, after four months of negotiation.

May: Disney writes off the remainder of its $353m investments in Vice, both direct and through A&E Networks.

The same month the company raises $250m in debt from a group including investment firm 23 Capital, Soros Fund Management, Monroe Capital and Fortress Investment Group.

October: Vice acquires Refinery29 in a mostly stock transaction that values the two publishers at $4bn. The same month James Murdoch, son of mogul Rupert, buys a minority stake of undisclosed size in Vice.

2020

May: Vice chief executive Nancy Dubuc announces plans to cut 55 jobs in the US and approximately 100 elsewhere. In an all-staff email Dubuc warns that the tech platforms’ “squeeze” on publishers was “becoming a chokehold”.

Press Gazette analysis finds Vice made use of the UK government’s furlough scheme in December 2020, but took no more than £10,000, the lowest bracket.

2021

May: The Wall Street Journal reports Vice is targeting a $3bn valuation in a merger with 7GC & Co Holdings, a “blank-cheque” company established for the specific purpose of taking another company public (also known as a SPAC, or special-purpose acquisition company).

The company ultimately abandons the SPAC effort, unlike rival digital journalism brand Buzzfeed.

August: Vice co-founder Shane Smith yields control of the company as part of an agreement for $85m in further fundraising for the company from existing investors.

2022

February: The Guardian reports that Vice’s ad agency Virtue helped organise a $20m festival in Saudi Arabia, despite saying it would pause activity in the country following the murder of Jamal Khashoggi. In September Vice would be reported to be developing a content partnership with MBC, a media company part-owned by the Saudi government, in a deal that could be worth $50m over multiple years.

March: Vice is among many news organisations to commit staff to Ukraine and neighbouring countries amid Russia’s invasion. One reporter, Alec Luhn, was arrested while covering an anti-war protest in Moscow at the start of the conflict, but is subsequently released and leaves Russia.

December: The Wall Street Journal reports Vice Media is set to miss its revenue projection of $700m by more than $100m.

2023

February: Nancy Dubuc steps down as chief executive of Vice Media. She is succeeded by chief financial officer Bruce Dixon and chief strategy officer Hozefa Lokhandwala who share the role.

The same month the company receives a “$30m-plus lifeline” in debt financing from Fortress Investment Group as it reportedly struggles with cash flow.

March: Group Black, a company aiming to boost the health and size of black-owned media, reportedly submits a $400m bid for Vice.

April: Vice tells Press Gazette the business is making a “long-term commitment” to live streaming platform Twitch and that it has “six or seven” people working on the effort. The next week the company announces “painful but necessary” job cuts and a refocusing on the platforms where the brand has its biggest audiences.

May: Vice Media declares bankruptcy. Creditors Fortress, Soros Fund Management and Monroe Capital submit a credit bid of $225m for the company.

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
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