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Disney has taken a $157 million write-down on its investment in Vice Media, the company revealed Thursday during its quarterly earnings report.
The entertainment giant invested $400 million in Vice in 2015 through a pair of successive $200 million investments. Disney already owned a stake in Vice via A+E Networks, a joint venture of Disney and Hearst that invested $250 million in Vice in 2014.
The write-down comes five months into the tenure of new Vice CEO Nancy Dubuc, who took over for co-founder Shane Smith at the end of May. One of Dubuc’s primary tasks has been to clean up the company’s financials. To that end, Dubuc has instituted a hiring freeze and plans to reduce the company’s workforce through attrition. She is also planning to scale back on the number of digital brands at the company, which operates such verticals as Noisey (music), Munchies (food), Motherboard (tech) and Broadly (women’s issues). A source familiar with the company’s plans says that around a quarter of Vice’s 12 digital brands will be folded into other verticals.
Vice, which began as a punk magazine in Montreal in 1994, has over the years grown into an unwieldy business with 3,000 employees across 39 offices around the world and units devoted to digital, music, film and television production, a cable TV network and news reporting. Along the way, it raised billions in funding from the likes of Disney, 21st Century Fox and TPG, boosting its valuation to $5.7 billion.
But the company is still unprofitable, Dubuc revealed in an interview with The Hollywood Reporter. The company is said to be on track to lose $50 million this year, per a report in The Wall Street Journal, and make between $600 million and $650 million in 2018.
In her interview with THR, Dubuc said that she is working to turn a profit at the company. “The question isn’t if we’re going to be profitable but how soon, and it’s a lot sooner than most people think,” she said.
Dubuc also acknowledged that a strategic acquisition is the most likely outcome for the company. “You never really know when that call is going to come or who it’s going to come from,” said the exec. “But I’d like to see a good couple of years of continued growth under our belts first.”
During its fiscal fourth quarter earnings report, Disney also revealed that it has named its forthcoming family-friendly streaming service Disney+, and CEO Bob Iger teased that a Rogue One prequel series starring Diego Luna is in the works for the service, which is expected to launch in 2019.
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