Transparent Vice

Shane Smith built Vice into a cultural behemoth by bluffing his way into round after round of funding — until he reached a dizzying $5.7 billion valuation from which only a precipitous fall was possible.

That fall has been happening in slow motion for years, but things finally crashed to the ground in February of this year, when Vice announced it would shutter its award-winning news division, lay off hundreds, and stop publishing to its website entirely. For some insiders at the company, this outcome felt inevitable. The only question was how long Smith could keep making deals to keep disaster at bay.

Vice employed a lot of talented people at its lower levels. But any attempt to look at the company’s finances suggests a long history of issues at the very top. Vice Media’s overall business had been rickety for years before it filed for bankruptcy in May 2023 and sold itself to Fortress, an investment management firm.

According to sources, while Vice execs were spending opulently in some areas, the newsroom struggled to pay its bills. A person familiar with the company’s finances claimed that Vice delayed paying vendors until services would be shut off, at which point the company would realize they were necessary and try to figure out how to pay the bills. Among the services shut off on multiple occasions in the run-up to the bankruptcy were Getty and Pacer, two accounts crucial to any newsroom. It was particularly difficult for freelancers to get paid — a process that reportedly sometimes took months of hounding. A vendor called Wipro won a $9.9 million judgment in arbitration for unpaid bills — one of two factors that led to Vice’s eventual bankruptcy.

Three people alleged that it was not unusual for corporate credit cards to be abruptly cut off, including one person whose card was cut off. One newsroom leader reportedly paid $5,000 out of their own pocket to freelancers Vice owed. A division head allegedly created a shadow accounting system because the actual accounting department was so overwhelmed, it was impossible to know how much budget was left.

Sometimes certain lines of business weren’t told about the revenue goals they were expected to fulfill. Meanwhile, the company’s actual accounting and expense controls were messy. For instance, Vice’s digital division had expenses from NetJets — a private jet service — on its profit and loss statement, two sources told me. (A third confirmed the NetJets account existed without saying which balance sheet it was on. Two sources took credit for eventually canceling the NetJets account. “Since at least 2021, Vice has not had a NetJets account,” according to Vice spokesperson Samira Sorzano.) One executive source alleged that the digital division was funding a production executive’s $350,000 salary — an executive who the source claims did virtually nothing. Another exec heard, to their shock, that someone had reportedly spent $24,000 on a one-way ticket from New York to London.

Worse, after the May bankruptcy, almost $20 million in executive headcount was left on the budget, one source told me. (“False. This grossly exaggerated figure is off by several million dollars,” said Sorzano.) 

An executive told me that Vice’s accounting was “fanfiction finance.” “Is this what working at WeWork felt like?” they wondered.

It didn’t have to go like this. At a lecture in Scotland in 2016, Smith bragged that Time Warner tried to buy Vice, and so did Fox and Viacom. (He complained that these companies tried to give Vice haircuts in valuation and “tried to censor us, naughty.”) Disney entered discussions with Vice about acquiring the company for $3.4 billion, according to The Hollywood Reporter. Ultimately, Vice remained independent. 

For this story, I talked to more than 20 people, including investors, creditors, and former Vice executives and employees at all levels of the company — and their only real point of disagreement was whether Smith or his successor, Nancy Dubuc, deserved more of the blame for the company’s collapse. These sources described a corporate culture with no discernible strategy and little of the necessary financial infrastructure or discipline needed to run a company of its scale. 

At times, I heard what sounded like conspiracy theories in attempts to explain the vacuum of competent leadership. I heard, variously, that news was propping up everything else, and that the digital division was taking on expenses to make the TV division look good. I was also repeatedly told to look into Vice’s relationship with Saudi money. Among executives, there was little agreement and, instead, a lot of blaming each other for bad decisions.

Vice’s lack of understanding of how newsrooms work even extended to this story. In response to an email to current Vice CEO Bruce Dixon for comment on this piece, I received correspondence from David Shane at Resolution Communications, a crisis PR firm, who told me he was working with Fortress and Vice. When I sent him a request for comment on this story, he replied with a list of his own questions, most of which felt like an attempt to identify my sources.

I then received emailed responses to my inquiries from Bergeson LLP, a law firm that has represented the Church of Scientology and which describes its media practice as influencing “potentially damaging media reports” and “dealing with what is now known as ‘fake news.’” Throughout the reporting process, I would email questions to Shane and receive responses from Bergeson LLP — but the firm asked that Vice’s responses be attributed to Sorzano, Vice’s director of global communications, a person with whom I never spoke directly.

Bergeson LLP’s emails were headlined “Not for publication,” even though I had not consented to any communication being off the record, per The Verge’s very public background policy. The firm also questioned the use of anonymous sources, saying, “It is troubling that the false attribution [sic] — indeed every allegation put to Vice by The Verge — comes from anonymous sources, whom The Verges’s [sic] refuses to name despite Vice’s requests.”

Anonymous sourcing is a standard practice at any journalistic outlet engaged in investigative work, and there is no requirement to name sources at a subject’s request, particularly when they have otherwise been presented with sufficiently detailed information to comment on allegations. Identities are routinely protected to prevent companies from retaliating against employees or anyone else for speaking out. It is astonishing that Vice — whose once-storied newsroom won Emmys and Peabodys and a Pulitzer — no longer understands this.

There are a lot of ways to explain how and why Vice Media fell this far, but maybe the simplest is just this: Shane Smith fucked over a lot of people.

Things looked rosy in 2014. Smith, speaking at an event at the Paley Media Council, bragged that Vice was ahead of its digital media competitors in terms of being a real business. “We had to make money,” Smith said. “We’ve always had to make money on every single thing we’ve done. We’ve never had debt financing, any of that stuff. We always made cash.”

He went on, answering a question about why Vice’s valuation — at the time, $2.5 billion — was bigger than that of other digital media companies. Smith said that competitors Vox Media (the owner of this website) and BuzzFeed weren’t as far along as Vice was. “We’re budgeted for next year to do a billion dollars” in revenue, Smith said. 

Vice didn’t do a billion dollars in revenue that year. By 2019, Vice’s revenue would be “barely north of half a billion,” according to a person familiar with the company’s finances, who added that “there was never a line of sight to a billion.” In 2022, Vice was set to miss its more modest revenue target of $700 million by “over $100 million.”

In 2018, Nancy Dubuc was brought in to replace Smith after The New York Times published an article detailing allegations of sexual harassment at Vice Media. It detailed a boys’ club culture under Smith and included details on a “non-traditional workplace agreement” that many employees felt meant they could not complain about harassment. Dubuc arrived as CEO, ostensibly to clean up Vice’s act after Smith stepped away from the daily business to focus on content and deals — “the only things that I am good at,” Smith said.

In a statement about the changeover, Smith wrote, “We are a modern day Bonnie and Clyde and we are going to take all your money.” It was not clear whose money, specifically, he meant.

Dubuc came from A+E Networks and had been a board member of Vice for years. But two people who worked closely with her worried about whether she understood Vice’s business. At A+E, Dubuc had taken the history out of the History Channel, championing reality shows such as Ice Road Truckers. A+E also had a smash hit in Duck Dynasty, and Dubuc kept the channel’s costs low by rerunning the program as a marathon.

That was not exactly Vice’s sensibility, even on its cable channel, Viceland. Instead, under creative director Spike Jonze, it produced programming such as weed cooking show Bong Appétit and documentary series Balls Deep as well as the late-night talk show Desus & Mero, which featured two comedians who’d previously podcasted together. Besides Viceland, Vice also had an HBO deal for the award-winning program Vice News Tonight.

In the first year of Dubuc’s tenure, the company laid off 10 percent of its workforce, launched a news show called Vice Live — which one source called “the biggest piece of shit I’ve seen in my life” — and canceled it in less than two months. Dubuc did raise $250 million in debt financing, but Disney, one of Vice’s key investors, wrote down its $400 million investment, saying it did not expect a return. Then Vice News Tonight was canceled by HBO — one of the few profitable deals at the company, according to two sources.

Sources repeatedly described Dubuc’s executive team in unflattering terms. One executive described Dubuc’s hires as “a fucking clown show”; another called them “comical”; a third called them “cartoonish”; a fourth called them a “screwball cast of suits”; a fifth told me he’d learned valuable lessons from them about what never to do with a company.

“VICE has a well-defined mission and produces globally recognized, award-winning content,” said Vice spokesperson Sorzano. “We will not speculate on unnamed executives who may or may not have worked directly for the company’s former CEO.”

Dubuc brought in Jesse Angelo, a childhood friend of James Murdoch’s who had spent his career up until that point working exclusively for News Corp. She also hired Cory Haik, the former publisher of a digital startup called Mic, after that company collapsed and laid off nearly its entire staff. Both Angelo and Haik were reportedly told that they were in line to follow Dubuc as CEO, according to five people familiar with the company’s succession talks. 

“I was never told I would be CEO, I never asked to be CEO, and I did not want the job. Anyone telling you otherwise is misinformed or lying,” Angelo told me in an email.

Most of the people I spoke to didn’t have kind words for Angelo. One source said they weren’t clear on what he did all day. Another felt he only liked the “fun” parts of the job. “Jesse Angelo had no interest in how any of it was made or how to make it better,” said Dave Mayers, a former producer and cinematographer at Vice. 

Four sources told me that Haik frequently took the blame for decisions actually made by Angelo or Dubuc. “Cory was the executioner at her bosses’ behest,” one person said.

The people I spoke to were split about whether Vice was salvageable when Dubuc came in. Some thought that a more appropriate executive might have been able to right the ship; others said Smith’s excesses essentially doomed the company. There was widespread agreement that Dubuc did not understand news. “She had no idea what she was doing when it came to journalism or content,” one person told me. “It was pretty clear the company was screwed once we got into her tenure.”

“I am not going to comment,” Dubuc wrote me in an email. “This reads as gossip, disgruntled sources and an intentional smear, which is not journalism.”

Several of the other executives who came in with Dubuc were described as business types who were dressed up in “Vice costumes” but didn’t actually understand the company. According to five people close to the situation, the main skill set displayed by Dubuc’s team was managing up; she’d surrounded herself with yes-men. (When I asked Dubuc about this characterization in an email, she denied it. “As anyone in those rooms would tell you, Jesse and Cory certainly didn’t say yes to me, which was welcomed.”)

Revenue in 2020 was $580 million. After a deal to go public by merging with a blank-check company failed in 2021, Smith was forced to give up voting control of the company. But he was still the company’s hype man. In an interview with Business Insider, Smith insisted Vice’s future was bright. “If the timing comes along and we’re planning blistering 2022 and traffic and events do what we think they’re going to do, then the sky’s the limit,” he said. “If we can forecast out that same growth in 2023, then we are one of the hottest media companies to invest in.”

Seven people I spoke to talked about “Shane deals.” One former executive told me that when someone said, “This is Shane’s thing,” it meant that something was a little sketchy and shouldn’t be broadcast to the company. Among the “Shane deals” the executive mentioned was “Change Incorporated,” a sponsored content deal paid for by Philip Morris to encourage people to quit smoking. (This was part of a broader attempt by Philip Morris to change its image.) Another was the relationship with Greek broadcaster Antenna Group — a relationship that, when it fell apart, broke Vice.

To Vice’s credit, it still continued to produce award-winning television. In 2022, when the company was doing Emmy seating, Smith’s assistant allegedly asked where Smith’s statues from 2021 were. Apparently, Smith expected to have been credited as an executive producer, despite having no involvement on the shows that had won awards. The company had to ask the academy for a second set of every award the company won in 2021 and redo its 2022 submissions to include Smith. And in 2023, Smith and Suroosh Alvi, another co-founder, allegedly personally bought many of the tickets for Vice Media to attend the Emmys since the bankrupt company had no budget. Some managers and recently fired Vice News Tonight people bought their own.

“Shane Smith was an Executive Producer of several highly successful Vice Television shows and as such, received Emmy Awards for the shows on which he was credited,” said Sorzano, the Vice spokesperson. “It is commonly accepted, standard industry practice for Executive Producers of any award-winning show to receive an award for their involvement. It is not the company’s practice to purchase award show tickets for employees who the company no longer employs.”

For television journalism, the Emmys are among the highest honors. The nominations proved Vice’s problem had little to do with what it made; it was an issue of leadership. When Vice was finally serious about selling itself, the ad market had significantly changed from the days when Disney had valued the company in the billions.

At one point, Antenna Group was a likely buyer. It already had an extensive joint venture with Vice Media in Vice World News — a “Shane deal,” according to three people. Smith was incentivized to make deals because his contract had “no ceiling on how much he could be paid and multiple sources of payment that funneled him millions of dollars in compensation.” He got a $1.6 million annual salary on top of the 5 percent cut of his deals. To earn that commission, a quarter of the revenue for the deal had to be profit. 

(Vice declined to comment on Smith’s salary or commissions. “As its founder, Shane Smith is and has been an integral part of Vice,” according to Sorzano. “He has always been tasked with securing strategic partnerships and opportunities around the world for the company irrespective of the former CEO’s role.”)

Smith was making millions during a period when Vice was having trouble paying its bills and freelancers, during which time the company underwent at least four rounds of layoffs. He outearned everyone actually running the business, according to a report in New York.

The Vice World News venture meant that Antenna broadcast 250 hours of Vice content annually across its channels in a number of countries, mostly in Europe. The deal “provided Vice with a steady stream of stable and profitable revenue,” according to the bankruptcy filing. Vice was paid $134 million under the deal in 2022, according to the bankruptcy filing — even though Antenna’s website claims it only built an eight-figure business with Vice. Paying nine figures for an eight-figure business doesn’t seem sustainable. 

(Sorzano declined to comment on whether Vice World News was a profitable business for Vice.)

Antenna could have walked away from a deal to fully buy Vice for a number of reasons. But the one that seemed most plausible to the people I spoke to was that when Antenna was doing due diligence, it got a look at Vice’s books and may not have liked what it saw. In any event, Antenna severed the Vice World News contract, in addition to walking away from the acquisition. Antenna representatives did not return repeated requests for comment. Vice’s Sorzano declined to comment on this speculation.

Several people told me that these “Shane deals” probably extended the lifetime of the company. Without them, Vice would have been over much sooner. But they came with huge fixed costs — and other kinds of costs, too. 

Before the bankruptcy, Vice began to court Saudi money. This is anathema to journalists, since Saudi agents killed and dismembered Washington Post journalist Jamal Khashoggi in October 2018 inside a Saudi consulate in Turkey. (Khashoggi was there to get marriage documents.)

Vice had a relationship with the Saudis before Khashoggi was killed; in August 2018, Shane Smith was on a yacht with Saudi Crown Prince Mohammed bin Salman to discuss a business partnership. After Khashoggi’s murder, Vice began reviewing its contact with the Saudi publishing group SRMG.

That didn’t stop Vice from secretly organizing a music festival in the middle of the Saudi desert in 2020. A year later, Vice’s ad agency was pitching marketing campaigns to promote Riyadh. In 2022, Vice began deal talks with the Saudi media conglomerate MBC Group. (MBC had also taken a 30 percent stake in Antenna earlier that year.) Vice eventually did go through with the direct partnership with MBC, which was announced in January 2023.

Worse still, The Guardian reported that Vice “repeatedly blocked news stories that could offend the Saudi government.” In the London office, employees working on Vice’s Saudi joint venture replaced a photograph of a protest in memory of Sarah Everard, a UK woman kidnapped and murdered by a police officer, with “a giant map of Saudi Arabia.”

Vice World News was billed as a joint venture with Antenna Group, but I was told that the deal’s details were kept closely among the highest levels of the company. A bankruptcy filing from May 15th, 2023, reveals that Vice World News was actually being paid for by an entity called GMN Cayman, and that GMN Cayman pulled that funding after Antenna’s talks to buy Vice outright fell through. Vice Media was in trouble before the deal collapsed — but between Wipro’s award for unpaid bills, which resulted in a freeze on Vice’s bank accounts, and the loss of the Antenna deal, Chapter 11 was unavoidable. Vice had already taken three forbearances on its loans.

There is very little information available about GMN Cayman, or GMN Cayman HoldCo, which agreed to make two payments to terminate the Vice World News deal. Neither company appears to exist on Google search except in Vice bankruptcy documents. According to the Cayman Islands registry, GMN Cayman’s address is the same as a law firm in the Caymans, and it has two directors: Feras Houhou and Mohammed Abdullah A AlAli. Two men named Feras Houhou and Mohammed AlAli say on their LinkedIn pages that they worked for SNB Capital, which describes itself as the “investment banking and asset management arm of the Saudi National Bank, headquartered in Riyadh.” I reached out to them through LinkedIn but did not hear back in time for publication.

And when Fortress, one of the many entities Vice owed money to, took over the company through a credit bid of $350 million — that was another “Shane deal,” according to The Hollywood Reporter.

“This is based on misinformed reporting,” Sorzano said. “We will not comment on internal discussions with any investor.”

All the while, the compensation of executives dwarfed that of the journalists making the actual work. Just before the May 2023 bankruptcy filing, the company announced 100 layoffs, then paid out $1 million in retention bonuses to various executives. There’s even a bankruptcy filing detailing those bonuses. Meanwhile, many Vice employees didn’t get their promised severance as a result of the bankruptcy.

One reporter I spoke to had been traveling back from an undercover reporting trip focused on human rights violations when the production’s credit card started being declined; if it had happened 24 hours earlier, the team would have been in a very dicey situation. Fortunately, a supervisor was able to dig out an old credit card that still functioned, and that was how the group managed to fly home.

A name is missing from the list of executives in the filing: Nancy Dubuc, who abruptly stepped down as CEO in February 2023, days after receiving the termination notice from GMN Cayman. It’s odd that she doesn’t appear in the filing, though she was CEO during some of the time period it captures. (She made an annual salary of more than $1.5 million, according to The New York Times.) But then, three sources told me that they felt that escaping responsibility was a major part of her tenure as CEO.

“I am proud to leave a Vice better than the one I joined,” Dubuc wrote in a memo to staff announcing her departure, three months before the company’s bankruptcy.

Dubuc declined to comment on the Antenna deal, Vice’s inability to pay its bills, her leadership style, and the executives she surrounded herself with at the company. Vice declined to comment on its Chapter 11 filings.

After Dubuc left the company last year, two CEOs were appointed: Hozefa Lokhandwala, who was the chief strategy officer, and Bruce Dixon, then the CFO of Vice Studios. Before the year was over, Lokhandwala was out — forced out, a person familiar with the matter told me. Lokhandwala did not respond to a request for comment.

Jesse Angelo abruptly quit the company shortly after Dubuc’s departure. “I decided to leave Vice because I believed that the board and new co-CEOs, having already failed to close two transactions, did not have a strategic vision for the company and were steering it towards bankruptcy,” he said in an emailed statement.

Several people told me Vice remained messy under Dixon. After laying off hundreds in February, executives held a virtual town hall meeting. They mistakenly invited a handful of recently laid-off workers, who blitzed them with thumbs-down emoji. The execs ended the meeting abruptly. “It’s impossible to ignore the emojis,” Dixon said.

“Bruce continues to execute a strategy, backed by the board, that will lead to a more successful company,” said Vice spokesperson Sorzano.

Vice also canceled its contract with Slack, so staffers started using an instance spun up from their personal email addresses. Since it was what most employees used when the layoffs happened, the company had no way of removing fired workers from Slack, according to two sources. Sorzano, the Vice spokesperson, declined to comment on this.

What’s left now is Vice Studios, which is focused on video work for social platforms. There is some reason to be optimistic: Dixon worked for BBC Worldwide and Pulse Films before Vice — this is the business he knows best. (Pulse Films was acquired by Vice, but its founders are still owed the money from the buyout.) 

Here is what Sorzano, the Vice spokesperson, had to say about the company as of now:

This is the end of a chapter – not the book – for Vice. Any reporting to the contrary is both short-term and short-sighted as it misunderstands Vice’s strategy going forward.

The company is reconfiguring during a time of dramatic change and upheaval in the media sector. Vice is shifting to a studio model – producing and providing best-in-class content to distributors around the world. We have a multi-award-winning film, documentary, and television studio; a Vice television network; and a strategic and creative agency that represents some of the world’s best-known brands.

As we have previously stated, Vice has exited the costly day-to-day news business, and we have restructured our workforce in line with our streamlined operating model.

There continues to be tremendous interest in the Vice brand.

Despite all the talent in the junior and middle ranks, Vice did not build out a robust business operation. But then, maybe that wasn’t the point. One former Vice staffer called the company “an executive enrichment scheme.”

Vice was a certainly a good way for Shane Smith to make money and flex influence. Several people I spoke to wondered if that was really all Vice ever was. Smith got some of his money out on top, selling $100 million of his Vice shares in 2014. On an episode of Desus & Mero in 2017, Smith discussed investing his money by buying a $25,000 Pablo Picasso plate. Smith’s divorce filing showed he made $1.6 million per year, plus $1,400 a month in “perquisites,” according to Business Insider. In 2021, Smith sold one of his homes in Los Angeles for $48.7 million, according to Mansion Global.

Smith has always been an incredible salesman. In a 2015 interview, Smith is clear about where the responsibility for Vice lies: “I vote 95 percent of the board,” he said. He gave up voting control in 2021 only after the SPAC failure. Still, the era of the Shane deal may not be totally over: he is reportedly looking for capital to buy Vice back. Shane Smith did not respond to requests for comment.

Vice’s creditors can only expect 1 or 2 percent of their money back after bankruptcy. Vice spokesperson Sorzano declined to comment on the Chapter 11 proceedings.

On an episode of the Joe Rogan podcast in 2014, Smith called himself “post-economic.” In a very different way, Vice Media is now post-economic, too.