Vice files for bankruptcy amid digital media struggles

Vice Media, the youth-oriented publisher of prominent online outlets such as Vice and Motherboard, filed for bankruptcy on Monday, underscoring the fraught economic environment for digital media companies as economic growth slows and the advertising market softens.

The group of sites, which includes food outlet Munchies and fashion news brand Refinery29, will continue publishing as the Chapter 11 bankruptcy process unfolds and the site takes on new ownership, Vice Media said in a statement.

The bankruptcy announcement will facilitate the sale of Vice Media to a group of its top lenders led by Fortress Investment Group and Soros Fund Management -- which has agreed to an acquisition of the company that values it at about $225 million, the statement said.

"This accelerated court-supervised sale process will strengthen the Company and position VICE for long-term growth, thereby safeguarding the kind of authentic journalism and content creation that makes VICE such a trusted brand for young people and such a valued partner to brands, agencies and platforms," Bruce Dixon and Hozefa Lokhandwala, Vice Media's co-CEOs, said in a statement.

"We will have new ownership, a simplified capital structure and the ability to operate without the legacy liabilities that have been burdening our business. We look forward to completing the sale process in the next two to three months and charting a healthy and successful next chapter at VICE," they added.

The move comes weeks after Vice Media canceled its flagship TV program, "Vice News Tonight," indicating the depth of layoffs and cost cuts already underway.

A string of layoff and closure announcements in digital media has arrived in response to cooling ad revenue that has punished balance sheets.

Vox Media cut 7% of its staff in January and Bustle Digital Group -- the parent company of online media outlets like Bustle and NYLON -- followed a month later with layoffs that affected 8% of its workforce.

BuzzFeed News, a brand synonymous with the rise of online news coverage, shuttered less than a month ago.

Founded by Shane Smith, Suroosh Alvi and Gavin McInnes in Montreal in 1994, Vice Media rose from an edgy print magazine to a plucky online news brand to a youth culture media empire, ultimately garnering an investment of more than $400 million from Disney. In 2017, Vice was valued at $5.7 billion.

However, the company fell into financial trouble as it struggled to convert a large readership into reliable digital ad sales, finding cold comfort in a volatile ad market where social media platforms reaped much of the revenue.

Vice Union, a labor organization that represents more than 320 employees at the company, said on Monday that it "stands strong in supporting our members through stressful and uncertain times -- and is more than ready to fight tenaciously for our rights."

"Regardless of who owns the company," the union added.

Disney is the parent company of ABC News.