The digital media company Vice filed for Chapter 11 bankruptcy in May, and new documents disclosed in the proceedings offer a rare glimpse into the financial maneuvering that led the privately held company to insolvency. 

In particular, they reveal that Vice raised more than $1.3 billion in debt and equity financing using at least eight fundraising vehicles since 2017—often to compensate for a near-constant cash deficit.

The strategy, in conjunction with a shifting media and financial landscape, left the company in precarious financial health, which gave out when a key payment failed to materialize in January. After generating $258 million in gross revenue in 2022, the company now struggles to pay utility bills and severance to former staff. 

“By the end, Vice was just pouring water into a leaky bucket, and there was no tape in sight,” said media analyst and Workweek founder Adam Ryan. “You can buy time with capital, but those last 18 months seem like throwing money in the toilet.”

The fate of the company represents the end of a decade-long experiment in digital media whose core hypotheses—the value of platform-enabled scale, in particular—have since been proven false, according to interviews with media and financial analysts. Rather than an anomaly, the company and its collapse are the inevitable byproducts of a business model built on false assumptions.

Below, drawing from the summary provided by chief restructuring officer Frank A. Pometti, outlines how the company came to find itself $834 million in debt.

A representative for Vice declined to comment.

Saddled by an early and increasing debt load

Although Vice was founded in 1994, its path to bankruptcy began in 2017, according to Pometti. 

That year, the company raised $400 million in equity financing, but the capital expenditure of its business—Vice employed 1,300 employees in 20 global offices—soon forced it to seek fresh capital. 

Over the next few years, this pattern would repeat itself, as Vice routinely failed to generate enough revenue to outpace its expenses.

“Like many other growth companies in the media and technology sectors, Vice has been cash flow negative for the past several years,” Pometti wrote. “As a result, Vice relied on external funding, raising both debt and equity capital to fuel its rapid growth and to fund expenses in certain parts of its businesses.”

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