The Mouse House’s write-off, included as part of its robust earnings announcement for the March quarter, comes after Disney took a $157 million impairment charge related to Vice in the September 2018 quarter.
Currently, Disney holds a 21% effective ownership in Vice, as well as 21st Century Fox’s 6% stake after Disney completed the Fox acquisition in March.
Disney’s total $510 million reported loss on its Vice investment exceeds the $400 million that Disney originally invested into Vice directly over three years ago (when the company was valued at $4 billion). However, Vice’s valuation increased with a 2017 funding round — soaring to $5.7 billion — which increased the value of Disney’s stake. Also, Disney’s overall stake in Vice encompasses 50% of the investments made by A+E Networks (a 50-50 joint venture with Hearst) and the addition of 21CF’s stake in Vice.
What the Brooklyn-based media company is worth now is unclear; a Vice spokeswoman declined to comment on the valuation. Disney’s write-down and current estimated value of the Vice investment does not reflect the $250 million in debt financing Vice closed last week from an investment consortium led by financing firm 23 Capital, with participation by George Soros’ Soros Fund Management, Fortress Investment Group and Monroe Capital.
The once high-flying Vice has suffered a shortfall in revenue goals, and laid off about 250 employees, or 10% of its staff, earlier this year.
Vice CEO Nancy Dubuc, hired last year to lead the company’s turnaround efforts, has set a target of achieving profitability within the next fiscal year. The ex-CEO of A+E Networks restructured the company around five lines of business: digital, news, Vice Studios (film and TV production), the Viceland cable channel (a partnership with A+E), and in-house ad agency Virtue.
In a statement after Disney reported earnings Tuesday, a Vice rep said, “Vice is firing on all cylinders and on target to meet, if not exceed, its financial targets for the third straight quarter. Our new executive team’s strategic plan is well underway and with the recent capital raise, we will continue investing in the long-term growth of our five global businesses — television, studio, digital, news and our advertising agency, Virtue.”