How Vice went from to $5.7b media behemoth to facing bankruptcy

Vice co-founder Shane Smith reportedly once told : ‘I have Gen Y, I have social, I have online video.You have none of that. I have the future, you have the past.’

The pitch worked and in 2013 Murdoch invested $70million.

For the best part of 20 years, the extraordinary rise of the punk magazine founded in Montreal in 1994, was fueled by sheer chutzpah.

But the left-leaning disruptors have struggled to live up to their own hype – amid growing evidence they have been ditched by younger audiences.

As Vice prepares to file for bankruptcy, asks: how did the bad boys of news lose their cool?

Vice began life in Montreal in 1994 as a punk magazine using cash from a welfare program

Ottawa-born co-founder Shane Smith, dubbed ‘Bulls****** Shane’ adopted a brash approach to deal-making, which some viewed as a mixture of lies and bluster, that brought in billions of pounds of investment from the likes of Disney and MTV

The company, which is headquartered in hipster Williamsburg, Brooklyn, soon went global and set up glitzy offices across the globe, including this one in Venice, California



At its peak, Vice had 3,000 employees across the globe, with a cable network, two HBO shows, and more than a dozen websites.

It had an ad agency, a film studio, a record label, and a bar in London.

In 2016, it was valued at $5.7billion and Smith boasted to The Wall Street Journal that by the end of the decade, the company could be worth $50billion.

It was quite the turnaround for a company set up with cash from a government welfare program – and Smith reveled in his success.

Nicknamed ‘Bulls****** Shane’ by fellow co-founder Gavin McInnes, the Ottawa-born upstart was so proud of his deal-making prowess that one former employee compared him to Donald Trump.

The bluster sometimes spilled over into outright lies – but it didn’t appear to matter.

In 1998, Smith reportedly told a journalist that a wealthy media mogul named Richard Szalwinksi had invested in the firm.

It was a lie and Szalwinski got wind of it.But he was so taken by the audacity that he paid for the company to move to New York on West 27th Street.

According to , when a reporter came to visit the firm’s new HQ, Vice paid someone to pretend they were an MTV executive interested in a Vice-branded show.

Smith has enjoyed the lifestyle of a media mogul and is pictured here with rap legend Jay-Z

The 53-year-old has amassed huge personal wealth despite complaints of low pay from staff

Suroosh Alvi, the third founder, once said: ‘The reason those lies were so successful was because even we believed them after a while.’ 

But some of these lies would later become a reality.When Smith brokered a real meeting with MTV, he turned on the charm the only way he knew how.

‘He told us, ‘MTV’s over, you suck, we’re the new kids on the block,’ Van Toffler, head of MTV at the time, said.

Smith wooed his clients by showing them a good time – and they wanted a piece of his cultural cache.

‘It also helps to eat them out and mail them drugs,’ Smith said of his strategy in 2003.

Brands felt that Vice could help them connect with young people in all corners of the globe.



For most of its teenage years, the story of Vice was one of constant expansion.

It launched an ad agency, Virtue, and a digital music magazine, Noisey.By 2014, it had moved into its current glitzy headquarters, a 75,000 sq-ft office in the ultra-hipster neighborhood of Williamsburg, Brooklyn.

But perhaps most significant was its venture into television and documentaries.

In 2007, Vice became one of the first media outlets to plunge into online video with, following a $2million investment from Viacom.

Filmmaker Spike Jonze was brought in to oversee content, sending Smith or Alvi to strange and dangerous situations.

It became a trademark that would lead to a landmark deal with HBO, in which Vice was given an hour-long newsmagazine slot to showcase its documentaries.

It used these to burnish its credibility: documentaries on the Islamic State and the white supremacist rally in Charlottesville won multiple awards.

In 2012, shortly before Fox bought a 5 percent stake in the company, Rupert Murdoch tweeted: ‘Who’s heard of Vice Media?Wild, interesting effort to interest millennials who don’t read or watch established media. Global success.’

Rupert Murdoch was wooed by Smith into investing $70million in Vice Media in 2013, valuing the company north of a billion dollars

Shortly before he invested, he took to Twitter to dub the company a ‘global success’ in its bid to interest ‘millennials who don’t read or watch established media’

In 2014, asking whether the ‘big bear of a Canadian’ would be the next Rupert Murdoch.

A year later, Disney announced a $400million investment in Vice and would launch Viceland, its own TV channel.

This has been viewed by some media commentators as a mistake – an expensive undertaking at a time when most were moving away from cable TV.

But Smith saw it differently.’Twelve months from now, we’ll be on the cover of Time magazine as the guys who brought millennials back to TV,’ he said at the time.



Around the same time as Disney came on board, iconwin Vice was named company of the year by Inc.Magazine.

In 2016, Smith was crowned ‘media person of the year’ at the Cannes Lions International Festival of Creativity.

He was delighted, telling the hosts: ‘We are f******* s*** up. We are the revolutionary guys.’

But Vice was now facing a perennial conundrum.

‘How do you scale the essence of a punk-rock magazine into a multibillion-dollar media company?’ a former Vice executive asked The New York Magazine in 2018.’There is no real answer. At some point, what you got there isn’t what you are.’

Vice has struggled to retain its punk identity in recent years under pressure from investors

The company has enjoyed critical acclaim with its documentaries.Here, rock stars Josh Homme (left) and Jesse Hughes (centre) are interviewed by Smith (right)

Smith (left) and producer Johnny Knoxville attend the Los Angeles Premiere of ‘Being Evel’ on August 19, 2015 in Los Angeles, California

There was also evidence Vice wasn’t as cool as it claimed.A 2017 report funded by Google found that among 122 brands, teenagers thought Vice was the second-least cool.

Vice may have captured a millennial audience, but it has lost out on Gen Z, with advertisers instead turning to social media giants such as Snap and TikTok.

With all its various projects, its overall output has become mixed.It launched a ‘luxury travel’ site aimed at men with disposable income, while Viceland also grapples with who it is talking to.

There have been shows about weed and skateboarding, while Gloria Steinem has fronted a program about oppression and violence against women, and Ellen Page presented ‘Gaycation’ on global queer culture.

This lurch to the left made it unrecognizable to those who followed it during the McInnes years, whose brash, offensive style shaped its early output.

McInnes was bought out in 2008 and is now a leading figure of the alt-right.



A bigger problem for Vice has been reconciling its pitch for a younger, ‘woke’ audience, with the reality of its own ‘bro culture’.

In November 2017, published allegations of a ‘toxic’ culture for women in its Los Angeles office – a tricky look for an outwardly progressive media firm airing documentaries about misogyny.

The outlet spoke to more than a dozen current and former company employees who experienced harassment.

New hires at the company were reportedly asked to sign a ‘non-traditional workplace agreement, which read: ‘Although it is possible that some of the text, images and information I will be exposed to in the course of my employment with Vice may be considered by some to be offensive, indecent, violent, or disturbing, I do not find such text images or information or the workplace environment at Vice to be offensive, indecent, violent, or disturbing.’

Vice Media co-founder Gavin McInnes has become a figurehead for the alt-right since he was bought out of the company in 2008.Pictured here reading a speech by Ann Coulter at a conservative rally in Berkeley, California in 2017

McInnes pictured surrounded by members of the Proud Boys, a far-right group he founded

Smith, right, with former Vice president Andrew Creighton, left, who stepped down in 2018 after The New York Times revealed details of a harassment complaint against him, which was subsequently ‘found to lack merit’ by an independent law firm.Smith was not implicated but apologized for the firm’s ‘boys’ club’ culture

The following month, exposed accusations of sexual misconduct across the company.

Andrew Creighton, Vice’s president at the time, left the company after details emerged of a $135,000 settlement in 2016 to a woman who had accused him of harassment.

He was cleared of wrongdoing and the allegation was ‘found to lack merit’ by an independent law firm.

Smith was not implicated, but he apologized for the firm’s ‘boys’ club’ culture and promised change.



In March 2018, Smith stepped aside as CEO, moving to executive chairman.

His successor, Nancy Dubuc was left to deal with stakeholders who now wanted to see a return on their investments.

By 2019, Disney had taken two write-downs on its investments, totaling more than $500million.

Dubuc was under pressure to find a buyer before the start of guaranteed-dividend payments to private equity firm TPG, which had invested $450million in 2017, were due to begin.

The deal set specific revenue targets for Vice, which it failed to meet on more than one occasion, including in December last year, when reported the firm had fallen $100million short.

Under the pact, this meant TPG’s stake increased and what started as a punk revolution was now dancing to the beat of the PE drum.

‘If private equity is in charge of a creative enterprise – look out,’ a former top Vice executive told .

During this period, Vice, like many other media organizations, was battered by the pandemic.

Smith and Vice now face pressure from stakeholders to deliver returns on their investments

Redundancies at Vice have already begun as the company desperately seeks a buyer

Film production ceased and when conditions allowed a resumption, costs had rocketed.

In January this year, the company put itself up for sale.Two months later, media collective Group Black put in a bid for around $400million, according to The WSJ.

Seven years earlier, Smith reportedly held talks with Disney over a takeover in the region of $3.5billion, but had felt that Vice had more room to grow.

As it is, if a buyer is not found, the firm’s largest debtholder, Fortress Investment Group, could end up controlling the firm.

Dubuc left Vice in February, with longtime company insiders Bruce Dixon and Hozefa Lokhandwala taking over as co-CEOs.

‘Vice Media Group has been engaged in a comprehensive evaluation of strategic alternatives and planning,’ Vice said in a statement on Monday.

‘The company, its board and stakeholders continue to be focused on finding the best path for the company.’

1 year ago

Back in 2018, Alvi said that Vice has ‘not followed any path other than growth’.But as layoffs begin in earnest, it will soon begin to shrink.

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