How Vice Media Became a Money Pit

There is such a thing as having too much money. At least, that is, if you’re a startup, as was clear in the paperwork accompanying today’s bankruptcy filing by Vice Media, famously valued at $5.7 billion a few years ago (mostly thanks to the blustery claims of its founder, Shane Smith). This court filing today by a restructuring executive at Vice laid out the sorry history of the company, which lived beyond its means for… well, at least since it started raising serious money. And investors both big and not-so-big (TPG, TCV, Disney and James Murdoch) enabled it, by repeatedly writing checks. It was a money pit.

Vice’s history has been extensively chronicled over the years, including in this piece in The Information. But the details emerging from today’s bankruptcy filing makes clear just how much a plentiful supply of cash held back Vice’s ability to become a profitable enterprise. For instance, after raising a significant sum in 2017 (when it got its famous peak valuation), Vice invested heavily in “content, operations and infrastructure that did not provide an immediate return and resulted in significant losses and increased expenses,” the restructuring executive said in today’s declaration. In 2019, Vice borrowed money to fund ongoing operations, a move which left it “saddled with a significant amount of leverage,” he added. That’s not what you call forward-looking financial management.