A couple of years ago, it looked like Vice may have successfully grown up.
The youth-oriented news outlet was getting glowing write-ups on its transformation from subversive Canadian street-press magazine to international news and media company. There were serious news awards and big interviews, including with then-US president Barack Obama. The Columbia Journalism Review described the changes underway at Vice like this in 2015:
To understand the cultural shift underway at Vice, imagine that MTV’s Jackass, instead of fading into obscurity, now produces exclusive documentaries about ISIS from Syria and Iraq. Vice.com is still disproportionately preoccupied with sex workers — case in point: “Twenty Hours in a New York Strip Club” — but the crudest material has gradually been defanged.
Vice‘s gonzo-esque style of journalism has been widely criticised, especially by the legacy media, but it also appealed to highly sought-after youth audiences who were abandoning traditional news services. Founder Shane Smith reported in 2011 from the uprising in Libya, and Vice won the prestigious Peabody Award for a 2014 film on Islamic State, where filmmaker Medyan Dairieh was embedded with the group for three weeks. Vice News was also behind the meeting of basketball star Dennis Rodman and North Korean dictator Kim Jong-un in 2013, and its footage of the Charlottesville protests that later turned violent last year was widely referenced after it captured more than any other news outlet.
Vice’s news product was online-only until it paired up with cable network HBO in 2015 to produce a nightly newscast (which is aired on SBS’ Viceland channel). HBO’s interest was only part of the buzz around digital and youth-oriented media — Disney, Fox and A&E (owned by Disney and Hearst) own stakes in the channel, and private equity firm TPG also invested US$450 million last June, with the implication that they all believed its value would just keep going up.
But in November, The Wall Street Journal predicted Vice Media would miss its revenue target for the year, and the company’s value is now likely to be below the reported $5.7 billion.
Last week, the joint venture between Vice Canada and Rogers Communication ended, and the Viceland channel will now only be available online in the company’s original home country. As Crikey reported last week, in 2016, Viceland Canada posted a CA$2.49 million pre-tax loss in 2016, the last fiscal year measured, against a pre-tax profit of CA$236,938 in 2015, with overall revenue for the channel falling 14% from CA$6.36 million in 2015. It’s likely the 2017 losses were even more.
Vice‘s joint venture with SBS in Australia, which started in 2016, has done OK ratings-wise, and both Vice Australia and SBS told Crikey last week they were happy with the current arrangements and had no plans to quit. SBS Viceland, which includes non-Vice content, has averaged a 1.5% share in the first two weeks of 2018, but SBS has said little about its financial performance aside from its 2016-17 annual report:
Strategically, our new linear television channel, SBS VICELAND, has provided young adults with a broader global perspective on the key issues impacting young people everywhere, with a focus on multiculturalism and diversity. There are great synergies between VICELAND content and SBS which has allowed us to maximise the value of our investments by securing compelling and exclusive world programs for television and streaming. Coupled with our flagship youth news and current affairs program The Feed, SBS VICELAND is delivering a unique proposition to Australia’s youth audiences.
As well as the fight for the advertising dollar and other challenges facing all media, Vice hasn’t been immune from the wave of sexual harassment allegations sweeping the media and entertainment industries in the past few months. And that could be even worse for the company’s bottom line. For years, reports of the Vice boys’ club were rampant, with several women complaining of being harassed. And a recent investigation by The New York Times found four settlements related to sexual harassment or defamation against Vice employees, including the current president, as well as more than 20 other women who’d reported experiencing or witnessing sexual misconduct.
The report got two senior executives suspended: president Andrew Creighton and chief digital officer Mike Germano. The latter was fired this week after an investigation.
There is a very nasty financial cost for companies associated with sexual harassment claims so far as investors are concerned. Take Wynn Resorts, one of the biggest gambling companies in the world, with chairman and CEO Steve Wynn a high profile Republican donor and supporter of President Donald Trump.
Late last week The Wall Street Journal broke the story that Wynn had been sexually harassing numerous women over the years and had reached a US$7.5 million payment with one women in particular. Wynn called these claims “preposterous” but investors weren’t listening and sold off Wynn Resorts shares, which has lost 15% of its value (close to US$2.5 billion) since the first Journal story. Now the company is being investigated by gambling regulators around the US and by the Securities and Exchange Commission.
Why is this important for Vice’s valuation? It shows the intolerance more and more investors have for sexual harassment and other claims of bullying. Combined with the closure of the Canadian venture with Rogers, the sexual harassment claims against Vice will do nothing but drive the value of the company down further.