What's Up With the Global Media Industry? From Vice Media filing for for Chapter 11 bankruptcy, BuzzFeed News shutting down to Austin Russell acquiring 82 per cent stake in Forbes Global Media Holdings, the global media landscape is fast changing
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"In America, the President reigns for four years, and journalism governs forever and ever," said Oscar Wilde. In the last few years, news outlets have been powerful in bringing in a change – a stimulator for discussion, debates and general beliefs. Now, these same sources are collapsing under a financial crisis, leaving its followers and readers in a limbo. Case in point – to the world, Vice Media was the one spot stop that fed droves of news to its readers. It was once valued at $5.7 billion and now it has filed for Chapter 11 bankruptcy. Well, this is not the only instance that took the media industry by storm– BuzzFeed News, the Pulitzer Prize-winning news vertical of BuzzFeed.com, is also being shut down.
"The shutdown is happening as part of a new wave of layoffs at the company that will reduce the company's workforce by about 15 per cent. While layoffs are occurring across nearly every division, we've determined that the company can no longer continue to fund BuzzFeed News as a standalone organization," said BuzzFeed CEO Jonah Peretti, as quoted by The Verge.
Soon after,VICE Media closed VICE World News and canceled VICE News Tonight, its flagship news television program, resulting in more than 100 layoffs across the newsroom, the company filed for Chapter 11 bankruptcy, a process that is likely to result in the sale of the company to Fortress Investment Group and Soros Fund Management for $225 million.
"To facilitate the sale, VICE has filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York. The Company is seeking approval of the proposed transaction pursuant to Section 363 of Chapter 11 of the U.S. Bankruptcy Code, which will allow outside parties to submit higher or better bids for the Company. In addition, the transaction is subject to Bankruptcy Court approval, antitrust approval, any other approvals that may be required by law, and other customary conditions.
VICE has also obtained commitments for debtor-in-possession ("DIP") financing from the Lender Consortium, as well as consent to use more than $20 million of cash that constitutes the cash collateral of the Lender Consortium. VICE anticipates that this financing, as well as the cash generated from ongoing operations, will be more than sufficient to fund its business throughout the sale process, which it expects to conclude in the next two to three months," it said in a statement.
Vice News' woes were not an overnight phenomena. The closing of its international journalism arm — Vice World News — and axing of its popular weekly broadcast program, Vice News Tonight, compounded by the departure of Vice's chief executive Nancy Dubuc, who left the company in February 2023 after five years, led to its slow death.
VICE Media LLC has filed for Chapter 11 bankruptcy, a process that is likely to result in the sale of the company. https://t.co/C4Wvwai1zn— VICE News (@VICENews) May 15, 2023
Explaining the financial losses, Eric Snyder, chairman of bankruptcy at the law firm Wilk Auslander told The New York Times that this is not completely unusual. "It's the lender coming in and saying, 'I'm done funding the losses — if I'm going to fund the losses, I'm going to take control of the company. It's not unusual for the lender to come in and tell the debtor, the borrower, you're putting this into bankruptcy, you're going to make a motion to sell, we're going to put in a first bid," Snyder told NYT.
Vice Media grew from a small-time magazine in Canada in 1994 to a multimedia behemoth, with a TV channel, several digital media brands, multiple film studios and a rampant growth fuelled by several high-profile investors.
Well, adding to the latest development in the global media industry, Austin Russell, chairman and CEO of automotive technology company Luminar Technologies, has acquired 82 per cent stake in Forbes Global Media Holdings, that published the Forbes magazine, in a deal that values the media house at nearly $800 million.
As part of the deal, which was first reported by the Wall Street Journal, Forbes' Hong Kong-based parent IWM will retain a minority stake in the company and also keep one board seat. Forbes will also add a new board to the company consisting of American media, tech, and AI experts, reported Reuters. Russell won't be involved in day-to-day operations.
The media landscape is struggling across the globe and these developments are just tip of the iceberg.