Vice, a Beleaguered Avatar of New Media, Hangs a ‘For Sale’ Sign

After Vice Media secured a new round of financing in 2017 that valued the company at $5.7 billion, Shane Smith, one of its founders, teased the potential for “hockey stick” growth and a “sexy” stock market debut.

But that once-grandiose talk at Vice has run into reality. The company, which has undergone several rounds of staff cuts in recent years, is putting itself up for sale in a rocky media market — where it will almost certainly fetch much less than executives had once hoped for.

Nancy Dubuc, the chief executive hired in 2018 to replace Mr. Smith after a reckoning over workplace sexual harassment, said that the company had “turned a corner” and that she and the company’s investors had decided to sell to a company that could help it grow.

“Has it been difficult?” Ms. Dubuc said about the company’s travails in an interview. “Yeah. Has anybody in my chair had a difficult ride at any company? I would say yes. We tend to be a little bit more public than most because of the curiosities and palace intrigue. But I’m about getting a job done, and we have a job to do, and I intend to do it.”

Vice, which started as a punk magazine in Canada in the 1990s before relocating to New York, is a prominent example of the bullish-to-bearish outlook for new media companies over the past decade. Backed by major companies like Disney and 21st Century Fox, which wanted to tap into Vice’s young, hip and digitally savvy audience, Mr. Smith struck deal after deal that expanded the company into a big digital presence, a TV network and a film-production company.

But in recent years, Vice has not kept that momentum, struggling to live up to the promise of its lofty valuation. Several other media companies, including BuzzFeed and Vox Media, have run into headwinds in the digital advertising market. Vice is likely to lay off additional staff, according to a memo to employees from Ms. Dubuc on Friday, the same day that Vox Media said it was cutting roughly 7 percent of its work force.

Ken Doctor, a local-media entrepreneur and media business analyst, said Vice’s approach to news, often focusing on under-covered stories, had been overshadowed over time by its financial difficulties and pressure from investors.

“It’s undeniable that it created real value through that innovation, but the hype ate the reality,” Mr. Doctor said. “That was fueled by irrational investment, from the likes of Disney and others, sensing that there was something new here but ignoring some of the fundamentals of news media business realities.”

Ms. Dubuc said the company’s board was determined to sell for several reasons. Even though Vice is still unprofitable, the company cut its losses in the last year by about 50 percent, she said, and it is aiming to break even this year. Ms. Dubuc also said the company saw single-digit increases in its revenue this year, despite a bearish ad market.

In the interview, Ms. Dubuc said Vice’s studio business had grown beyond its roots as an independent film financier and had struck deals with major programmers including Sky, Netflix and the CW. She added that the company’s news business had improved after securing increased international distribution and launching projects like its show on the streaming network Twitch.

The company generated about $600 million in revenue last year, short of its $700 million target, according to one person with knowledge of the company’s financials. The Wall Street Journal reported those figures last month.

Ms. Dubuc also acknowledged that Vice’s backers were ready to cash out on their investment. In addition to the investments from other media companies, its big investors have included the private-equity giant TPG and the media mogul James Murdoch. She added that the company would benefit from having one owner, instead of numerous investors, that could take a long-term view.

The decision to restart its sales process, first reported by CNBC on Thursday, is the latest chapter in a yearslong quest by Vice and its investors to find a buyer. Two years ago, the company planned to go public through a blank-check company known as a SPAC, a financial vehicle to take private companies public. But that plan fizzled amid cooling investor sentiment.

Last year, the company hired the investment banks PJT and LionTree to explore selling some or all of its assets after suitors approached Vice to buy parts of the company, including its Virtue advertising agency and its studio business.

That process led to conversations with Antenna, a Greek media company that is a major buyer of Vice content. But those discussions stalled before the end of the year. Antenna is still a potential suitor for Vice, according to one person familiar with the company’s interest, but it is no longer holding extensive negotiations with the company.

This month, after the earlier sale process stalled, Vice Media’s board of directors formed a special committee to direct the sales process of some or all of the company.

Media valuations are down amid an uncertain ad market, giving buyers more leverage during negotiations. Even the giants of the industry like Disney and NBCUniversal are being tested by declines in traditional TV viewership and video-streaming business that hemorrhage cash.

Ms. Dubuc said Vice had made significant strides toward improving its culture and business operations since she joined.

“When I walked in here, it was unclear whether the company could survive,” she said.

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