Disney Discloses New $353 Million Write-Down on Vice Media Investment
The entertainment giant previously recorded a $157 million impairment charge on its Vice stake.
Disney has taken another write-down on its investment in Vice Media.
The company has recorded a $353 million impairment charge on its ownership stake in the new media startup, it revealed Wednesday as part of its first-quarter earnings report. That follows a $157 million write-down on its Vice investment in November.
Disney invested $400 million in Vice in 2015 through a pair of successive $200 million investments. The entertainment conglomerate also owns a stake in Vice via A+E Networks, a joint venture of Disney and Hearst that invested $250 million in Vice in 2014, and its recent acquisition of the assets of 21st Century Fox, which funneled $70 million into the Shane Smith-founded company in 2013.
Vice, which began as a punk rock magazine in Montreal in 1994, over the years grew into an unwieldy business with several thousand employees and more than 30 offices around the world. But recently the company has struggled in recent years to live up to its onetime status as traditional media's digital darling. Last year, longtime A+E chief Nancy Dubuc was tapped to help turn around the Brooklyn-based company. She told The Hollywood Reporter in October that the Vice was not profitable but that she was working toward the goal by focusing on growth areas like branded content and film and television production. In February, Vice laid off around 250 people, or 10 percent of staff, as part of a reorganization that focused the company around its five business priorities and reduced international redundancies.
A group of investors including George Soros' Soros Fund Management and 23 Capital showed support for Dubuc's plan last week by arming Vice with $250 million in debt. It was Vice's first round of funding since since the departure of former CEO Smith. In 2017, TPG invested $450 million in a deal that valued the company at $5.7 billion.
"Vice is firing on all cylinders and on target to meet, if not exceed, its financial targets for the third straight quarter," a Vice spokeswoman said in a statement. "Our new executive team's strategic plan is well underway and with the recent capital raise, we will continue investing in the long-term growth of our five global businesses — television, studio, digital, news and our advertising agency, Virtue. As the media industry consolidates and fewer players control the information and entertainment that the world consumes, Vice will always be there with a megaphone for the more than half of the people on this planet under the age of 30 who crave independent world-class content."
Dubuc, who assumed leadership of the company last summer, held her first NewFront pitch to advertisers on May 1, unveiling plans to consolidate many of Vice's digital brands into its main website. The company also said it would no longer count traffic from third-party websites as part of its monthly audience metrics.