Disney will be adding a little more Vice into its life.
That’s on top of the stake in Vice that Disney already owns, after investing $400 million in the company in 2015. Fox had purchased its stake in the Brooklyn-based media company in 2013.
The transfer of Fox’s Vice ownership stake wasn’t disclosed by Disney or 21st Century Fox in their public announcements or regulatory filings. Frankly, it’s kind of small potatoes in the context of the $52.4 billion deal under which Disney will absorb the 20th Century Fox studio and Fox’s cable networks.
Another point to note: Disney’s acquisition of Fox’s stake in Vice won’t change anything about Vice’s corporate governance. The Disney investment in Vice gave it about a 10% ownership stake at the time, while 21st Century Fox held 5%. Earlier this year, Vice received a $450 million infusion from private-equity firm TPG, which would have diluted the stakes held by both Disney and Fox. (A Vice rep, asked for details of the ownership positions of its investors, was unable to provide any info.)
Still, as Disney ups its stake in Vice, the question becomes whether it’s actually a beneficial investment.
Disney’s family-friendly brand always seemed an odd fit with Vice, which targets a millennial-skewing audience with gritty, no-holds-barred content and an editorial ethos celebrating drug lifestyles and other subcultures.
The main strategic intersection of Disney and Vice has been through A+E Networks, a joint venture of Disney-ABC Television Group and Hearst. In the U.S., Vice converted A+E’s H2 cable channel into Viceland. For Vice, the cable affiliate fees have represented guaranteed revenue, diversifying its business, and the company has planned international rollouts of Viceland.
But Vice’s push into cable TV seemed counterintuitive, as pay TV suffers the slings and arrows of cord-cutting and skinny bundles. Mainly, Viceland has turned what had been a very low-rated network (H2) into a slightly less-watched network.
There’s reportedly trouble at Viceland Canada: The cable network there is losing the backing of partner Rogers Communications, because of low ratings and financial losses, according to a report last month by Toronto’s Globe and Mail. In 2014, Vice and Rogers formed a three-year JV with a $100 million (Canadian) investment, under which the parties created a multimedia production studio and launched Viceland Canada in 2016. Both Rogers and Vice declined to comment on the report. A source familiar with the deal said no decisions have been made about the future of Viceland Canada.
On the digital side of the business, Vice is likely suffering from the tough advertising environment that has inflicted pain across the sector. In recent weeks, BuzzFeed, Mashable and Refinery29 have each conducted layoffs amid declining revenue outlooks.
In July, Vice laid off about 60 staffers, representing 2% of its total workforce. The company positioned it as reallocating resources to video production and international expansion. But it was a sign that Vice wasn’t exactly rolling in dough, and the IPO that CEO Shane Smith suggested would happen in 2017 never came to pass.
Meanwhile, elsewhere on the personnel front, Vice in the last few weeks has been forced to confront allegations of harassment and other misconduct by employees.
Two weeks ago, Vice fired three employees for violations of its HR policies, including Jason Mojica, head of its documentary film unit. That came after an internal investigation, prompted by a Daily Beast report describing Vice as having a pervasive corporate culture that was hostile to women, including allegations by a former employee that she was the target of sexual harassment.
On Friday, news broke that Andy Capper, who produced several Viceland documentaries and was the longtime global editor-in-chief of Vice magazine, is leaving the company. The circumstances of his departure are unclear at this point; Vice declined to comment.