The Facts
On Monday, Vice Media Group (VMG) filed for Chapter 11 bankruptcy protection in the Southern District of New York to facilitate its sale to a group of its lenders.
A consortium of lenders, including Fortress Investment Group and Soros Fund Management, agreed to provide $20M to help fund VMG's operations during bankruptcy.
The Spin
Narrative A
VMG, like other digital media outlets, believed it would generate substantial online ad revenues by attracting millions of young readers through social media networks; unfortunately, a bulk of its profits went to tech giants. Vice's bankruptcy is a symptom of both recent and longer-term downward trends in the economy at large and the media industry specifically. It is a reminder that a business tethered to social media for its growth must develop multiple streams of profit beyond just advertising.
Narrative B
Though Vice and the media industry may paint the company's bankruptcy as a consequence of economic pressures, in fact, this is the result of Vice's incompetent and greedy leadership. Vice's downfall was inevitable, as one of its founders, Shane Smith, was a conman who convinced investors that VMG was the future of news and entertainment. Smith made money hand over fist while employees were mistreated. Vice was doomed to fail.
