“One of the things that I think really hurt Vice, and in turn BuzzFeed as well, is social media networks like Facebook changing their algorithms,” Jason Mollica, professor at American University’s School of Communication, said. “Advertising is down across the board, so it’s a test for a lot of the digital publications,” Megan Duncan, assistant professor at Virginia Tech's School of Communication, told The Associated Press.ĭuncan and others also noted the changing landscape of social media - a space where outlets like Vice once thrived in terms of reaching audiences. Thank you.Double-agent Robert Hanssen dies in prisonĭigital advertising has plummeted this year, cutting into the profitability of major tech companies from Google to Facebook. You'll keep us up to date, I'm quite sure. And I wouldn't be surprised to see more media M&A to come over the next year, and over the next several years, as this industry continues to change and develop. So, again, just another weird sign of what's going on in this industry, a lot of significant changes. But he does plan to set the vision for the company and lead Forbes into its next phase of growth.
Now in a statement, Russell said, quote, "Forbes is something I had always looked up to as a brand and as a media empire." He doesn't plan to get involved in the day-to-day operations of the business. The SPAC market has just completely dried up and left a lot of those companies seeking a deal with very limited options. And really, we knew a sale was coming for Forbes as well, especially after it called off its SPAC merger in June of last year. Now, Whale Media has been attempting to sell Forbes for years, so this deal finally ending that drawn-out process. Now, Russell's stake includes the remaining portion of the company that was owned by the Forbes family, while the seller, Hong Kong-based investment group Whale Media, will have minority ownership.
That's going to value Forbes at $800 million. He's going to purchase that 82% stake in Forbes. But Austin Russell, he's a 28-year-old billionaire. Of course, we know that we've seen this from Elon Musk, Jack Dorsey, these big-time executives dabbling in multiple companies. There seems to be a lot of confusion on why he'd want to do this. Like, this sort of came out a little bit of left field, right?ĪLLIE CANAL: A little out of left field. Now, he is a car tech company, as we know. JULIE HYMAN: Allie, speaking of media and changes afoot there, Luminar Technologies, friend of the show CEO Austin Russell, he's buying a majority stake in Forbes. But as you mentioned, this comes amid that continued upheaval in the media sector.īuzzFeed shut down its news division as part of wider company layoffs late last month while Insider confirmed it would be laying off 10% of its workforce amid, quote, "the same economic headwinds as others in our industry." So just this media reckoning, if you will, especially among those early and really dominant players in the digital space. The lenders have also secured a $20 million loan to help Vice continue operations in the interim. So the writing was really on the wall that a bankruptcy filing was coming.Īs part of this, Fortress Investment Group, Vice's largest secured creditor, along with a consortium of lenders will invest around $225 million as a credit bid. But those efforts were not enough to offset rising debt, rising expenses on top of that sky-high valuation that burdened a lot of those sales options. In the past year in an attempt to help manage costs, Vice reduced its hiring, laid off workers, and restructured the business.
But then late last year, "The Wall Street Journal" reported the company was seeking a valuation of just $1.5 million, so a huge downtick in that valuation number, on top of the company not being able to meet its revenue targets. Flash-forward two years later in 2017, Vice was valued at $5.7 billion. The company had seen notable investments in its heyday, from A&E networks, 21st Century Fox, and even Disney, which invested a reported $400 million in Vice back in 2015. Allie, what do we know about this one?ĪLLIE CANAL: Well, Brad, we know it's truly a fall from grace since Vice Media was once looked at as the crown jewel of the digital media sector. For more on this, we turn to Yahoo Finance's Alexandra Canal. BRAD SMITH: Vice Media has filed for chapter 11 bankruptcy, the news coming early Monday morning and represents the latest defeat for the digital media space following the closure of BuzzFeed News last month.
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