Walt Disney Co. wrote off the rest of its investment in Vice Media, reflecting the ongoing troubles at the onetime media darling.
The charge of $353 million in the fiscal second quarter marked the second time in the last year that Disney has taken a hit on the investment.
Vice, which produces a high-profile news show for HBO and operates the Viceland cable channel, has struggled with sluggish ratings and a difficult market for online video — part of its early growth business.
The company, which began as a hipster music and lifestyle magazine, drew investments from some of the biggest names in the media industry under the direction of co-founder Shane Smith, who stepped down from daily operations last year. At one point the business was valued at $5.7 billion.
Vice has been run for a year by Nancy Dubuc, onetime chief executive of A&E Networks, the cable TV business that Disney jointly owns with Hearst Corp. In a further sign of the struggles at the company, Vice let go a number of staffers this year.
“We’re really trying to clarify what is Vice,” Dubuc said in an interview with Bloomberg TV this week. Regarding the layoffs, she said: “Some of that really was a reflection of how fast the company had grown and then being able to take a look at where we can be more strategic going forward.”
She said that a recent $250-million financing deal with 23 Capital and others would aid her efforts to turn around the business.
Disney owned a blended 21% stake in Vice, directly and through A&E. 21st Century Fox, which Disney acquired in March, held another 6%. Disney took a $157-million write-down on its Vice investment last year.
Dubuc declined to say this week when Vice could be profitable. “It’s my No. 1 priority,” she said. “We’re feeling really good about the plan we’ve laid out and hitting that plan.”
A representative for Vice said Wednesday that the company “is firing on all cylinders and on target to meet, if not exceed, its financial targets for the third straight quarter.”
Vice will continue to invest in “the long-term growth of our five global businesses — television, studio, digital, news and our advertising agency, Virtue,” the company said. “As the media industry consolidates and fewer players control the information and entertainment that the world consumes, Vice will always be there with a megaphone for the more than half of the people on this planet under the age of 30 who crave independent world-class content.”
Palmeri writes for Bloomberg.