Once Renegade Vice Anxiously Awaits Its Private Equity Overlords

Once Renegade Vice Anxiously Awaits Its Private Equity Overlords

If all goes according to plan, Vice Media will be owned in another two or three months by a group of three major lenders—Fortress Investment Group, Soros Fund Management, and Monroe Capital—that have agreed to buy the flailing youth-media conglomerate out of bankruptcy. Allow me to put that another way: A renegade brand once famous for its R-rated “Dos and Don’ts” will likely soon find itself wholly controlled by a consortium of faceless private equity sharks and investment managers.

Let’s set aside for a moment the well-established notion that, from an economic standpoint, Vice apparently operated for years as an overvalued house of cards, whose swaggering cofounder and chief salesman evinced a preternatural ability for wrangling gazillions of investment dollars, the end game being to eventually sell the company or take it public. (Talking about Shane Smith, obviously.) Shaky financials notwithstanding—and I won’t even get into the whole toxic-workplace-culture crisis—Vice did make a dent in the culture. “It is really a great brand,” Ben Smith told me recently when we were talking about the pitfalls of digital media. “It is a brand that, at least for Gen X’ers like us, stands for something.” Or, as one Vice veteran put it to me the other day in the wake of the company’s stunning Chapter 11 filing, “You have one of the most wild, historic, rollicking brands of the last 50 years, and now Fortress owns it?”

Fortress, of course, is Vice Media’s largest creditor, in possession of an IOU worth $474,648,153, according to the bankruptcy filing, which also lists debts owed to Pulse Films ($20.9 million), JPMorgan Chase ($9.8 million), CNN ($3.8 million), and HBO ($1.8 million), among numerous others. Fortress itself is reportedly in the midst of being sold by SoftBank to Mubadala Investment Company, an Abu Dhabi–based sovereign wealth fund. Which means, one way of looking at the fate of Vice’s worker bees—already rattled by dozens of layoffs last month and the cancellation of the award-winning Vice News Tonight—is that they may soon be toiling away for the United Arab Emirates.

Convoluted ownership pyramids aside, people in the news business—and Vice still is, after all, in the news business—have become increasingly wary of private equity in recent years, as financial firms have gobbled up distressed media entities and cut them to the bone. The scariest villain in town is the ever-elusive Alden Global Capital, whose vampire playbook for gutting newspapers I chronicled back in 2020. Great Hill Partners’ stewardship of the erstwhile Gizmodo Media, which went to war with their new overlords over editorial interference, is another cautionary tale. And Fortress has been on the radar too, largely through its control of Gannett, whose newspapers haven’t exactly had an easy go of it. “Fortress bears responsibility for the mess Gannett has become,” says the media analyst and entrepreneur Ken Doctor, who has followed Fortress closely. “Fortress may seem like a ‘media player,’ but its behavior bears good resemblance to Alden.”

Sources with visibility into the inner workings of Vice Media counter that the brass have found Fortress, which first invested in Vice in 2019, to be accommodating and supportive, as far as these types of relationships go. They point out that Fortress could have foreclosed when its loans came due at the end of last year, but instead pushed the due dates forward. Another takeaway from these conversations, for what it’s worth: The people running Vice believe that Fortress sees promise for Vice to come out on the other side of this mess as a much healthier company.

That said, the murmurs I’m hearing from inside Vice suggest the workforce isn’t ruling out that some other player may come along in the coming weeks, with a better bid than the Fortress-led group. For months, they’d heard and read about different parties wanting to buy them, including Group Black and Antenna Group, the Greek broadcaster Vice had partnered with on an international joint venture called Vice World News. Sources say there have been at least five interested parties in play, and they characterized the interest as active. “Everyone is prepared for a Fortress future, but everyone’s also not just accepting that this is what’s gonna happen,” one insider tells me. “People are waiting to see how it nets out, which means there’s a lot of uncertainty in the air.” 

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