(Bloomberg) -- Vice Media is preparing to file for bankruptcy, capping the rapid fall of a former industry darling that attracted investment from the world's largest entertainment companies.
The online media company has been looking for a buyer but is now preparing for a possible bankruptcy filing in coming weeks, said a person familiar with the discussion, confirming a report. The decision comes about a week after the well-regarded TV and online video outlet laid off staff and canceled its flagship program.
Vice, which operates a cable channel of the same name and creates documentaries and other video content for its own outlets and others, was once valued at $5.7 billion. Investors included Walt Disney Co. and Fox Corp., although their equity may now be worthless, the person said, asking to remain anonymous discussing private negotiations. Its largest debt holder is Fortress Investment Group, according to the newspaper.
Vice “has been engaged in a comprehensive evaluation of strategic alternatives and planning,” a spokesman said in a statement. “The company, its board and stakeholders continue to be focused on finding the best path for the company.”
Read more: Vice Ends Flagship Show, Cuts Jobs as Online Media Retreat (1)
The company's rapid downfall underscores the challenges facing digital media companies, which are struggling as advertisers cut spending during an uncertain economy and route marketing toward tech platforms from Facebook and Google to TikTok. Journalism can be more expensive than other forms of online content, making the business an easy target for cost-cutting.
In recent weeks, BuzzFeed Inc. shut down its news operation and online publisher Insider Inc. said it's cutting about 10% of staff.
started in 2016 as a newscast on HBO and won acclaim for its coverage of a white nationalist rally in Charlottesville, Virginia. HBO ended that partnership in 2019. Recently, the show aired on Vice TV, the company's cable channel.
--With assistance from Vlad Savov.
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