In Effort to Seem Like Youthful Startup, VICE Raises More Money With No Business Plan
The company laid off 17 people last week
Vice Media, which laid off 17 writers and editors last week as part of a “continued global alignment,” has just raised $85 million in investor money. This influx of “fresh capital” comes after raising $90 million in funds last year (good thing they axed those 17 people raking in like $60,000 a year).
The news, first reported by The Information, comes after the media company’s plans to go public by way of a “special purpose acquisition company” — or the blank-check companies known as SPACs — imploded. Vice had tried to ride the SPAC trend that dominated financial chatter this past spring, but got there too late. Sounds familiar.
The layoffs came just a month after a Vice spokesperson told The New York Times that the company plans to put “a greater emphasis on videos and other forms of visual storytelling,” — an echo of the media industry’s widespread and famously disastrous “pivot to video” of 2015. Vice plans to pay some of the money to “the founders of Pulse, the growing U.K.-based studio business behind Vice’s ‘Gangs of London,’” in whose company Vice bought a majority stake in 2016. The deal requires a second payment.
Under [CEO Nancy] Dubuc, who came to Vice from A&E Networks, Vice has focused on expanding its video production business, which makes shows that run on streaming services and TV networks, such as an upcoming “American Gladiators” documentary series to air on ESPN and true-crime show “Indian Predator” for Netflix. Vice has told investors that growth in that part of its business will help lift overall revenue next year to north of $750 million, from around $580 million last year and $604 million in 2019.
This sounds like it’ll go well:
But that plan faces challenges. The TV production business in general isn’t high margin business. And neither are Vice’s two other major business lines, its advertising agency, Virtue, and its digital media outlets, including Refinery29. Meanwhile its Vice cable channel is steadily losing viewers as more people opt to watch shows and movies on streaming services.
Another detail from the piece: Shane Smith — the Vice co-founder who stepped down as CEO three years ago, after a storm of allegations about “systemic sexual harassment and mistreatment of women” at the outlet — has given up his voting power, but nevertheless “remains chairman of the board.” How very countercultural.
A representative for Vice did not immediately return Gawker’s request for comment.