The rise and fall of Vice Media

Neil I. Patel

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Hello and welcome to Decoder. I'm Neil I. Patel, editor in chief of the Verge, and decoder is my show about big ideas and other problems. Today we're going to talk about Vice, the media company, where it came from, what it did, and ultimately why it recently collapsed into a much smaller, sadder version of itself. Vice is not a new company.

It started in the nineties, but it grew into something massive, with grand ambitions, enormous cultural influence and a ludicrous amount of money behind it. The promise was that Vice could turn big investments into bigger profits and become a media behemoth for a new generation of Internet natives. None of that happened after a few very rocky years. Vice declared bankruptcy in 2023. And earlier this year, as part of the post bankruptcy restructuring, the company abruptly shut down.

Its Pulitzer winning news vision, laid off hundreds of people, and said it would stop publishing to its website entirely. Instead, Vice will become a production company focused on selling video to social platforms and other kinds of distributors. Now, this is a pretty lousy time for digital media. There are layoffs going on everywhere because it's hard to make a profit from putting words on the web right now. So when Verge senior reporter Liz Lipada went to go report on what had happened to Vice, she and I both assumed that the company had been undone by the brutal economics of digital advertising on the web.

But the Vice story is much more than that. In the words of one executive that talked to Liz for her story, it was a fucking clown show. It turns out that you really can fake it till you make it all the way up to a $5.7 billion valuation, in the case of Vice. But at some point, you have to start running a real company, and Vice just never did that.

Liz Lipada

There's always this feeling you get when you've started reporting a story, and it's not at all the story you think it is, where you're just like, oh, okay, I guess I'd better report the story that this actually is. I thought, oh, okay. This is a story about cookies on the Internet. This is a story about advertising. This is a story about, like, how we built stuff that isn't sustainable.

And it is a story about building stuff that isn't sustainable. But it is not a story about cookies and advertising, or at least not mostly a story about cookies and advertising. We built a lot of institutions a while ago on the Internet. You might call them millennial media institutions. Pitchfork is one of those.

Buzzfeed, notably another one, maybe the one. Vice is definitely one of those, although it's a bit older than all the rest. To be fair, Vox Media and the Verge are one of those things. And I keep joking that we're the last website on earth because it's not a great time in media and the Internet right now. All the other ones are going away, including Vice news, including BuzzFeed News, including Pitchfork.

Down the line. They're all going away. It feels tempting to say it's all for the same reasons, and that might be true in the case of Vice. But I think what you uncovered is that vice as a business, the phrase you used was hall of mirrors. When you were describing the story to me, no one actually knew what the business of Vice was.

Liz Lipada

I heard a lot of theories about what the business of Vice was, and I have watched a lot of videos of Shane Smith describing the business of Vice. I still don't have a super good handle on what was going on there. Why don't we back up and start at the very beginning? Vice began in Canada in the nineties. In this sense, it is a Gen X institution.

This sort of, I guess, punk zine is the best way of putting it. And there are sort of some early key players. You have Shane Smith, you have Gavin McInnes and Saroosh Alvy, who are sort of the three big co founders. Gavin McInnes, if that name is familiar to you is also the founder of the Proud Boys. I will be blunt about the Proud Boys.

They're pretty racist. Gavin McInnes flirts pretty heavily with white supremacy. That's been a recurring theme with Gavin McInnes, including in the early days of Vice. It's one of the reasons that he ultimately, I think, got fired was that he was bad for the brand, but he was like sort of the original editorial voice. Shane Smith did a lot of the advertising stuff, and Sarouche was sort of the go to adult, if you will, in that group.

Liz Lipada

So they're, you know, whatever, doing their punk zine, like at the very beginning. I think there are stories about them lying to get on welfare rolls in order to get money to operate Vice. They get an investment during the.com boom, the first one in 1999. The stories about the early days of Vice are pretty chaotic. The investor who gave them that initial money has a pretty different version of events than the myths that Vice later spun up.

But whatever actually happened, Vice was out there doing the kind of work that really resonated in the early blog era. Vice was pretty tied in with the New York indie rock and hipster scenes of the early two thousands. And it was known for things like its do's and Don'ts column, where it published photos of people at parties and out in the street with extremely rude captions. Oftentimes those people weren't aware that they were having their photos taken or having them published. That's all.

In the first decade of the two thousands, it was a very different time on the Internet. But then things took a turn. Gavin McInnes leaves in 2008, and Shane Smith has very different ideas for the future of Vice. There's a very famous moment where David Carr, who was then the media columnist for the New York Times, interviews Shane Smith and writes about him. Shane Smith says something about how the New York Times isn't doing stuff that's as daring as what Vice is doing.

Liz Lipada

David Carr sort of stops him and is like, look, the New York Times has been reporting on genocide since before your publication existed. Like, don't. This is. You're not a real journalist. Don't do this.

It is a pretty incredible watch, and I kind of wonder if that's maybe part of what motivated what happened next. That documentary came out in 2011. What happened next is that Vice did move into real journalism. They had a deal with HBO to produce documentaries. They had another deal to do a nightly news show, which also initially was on HBO.

And Vice's overall video style influenced the whole generation of video journalists online and the Muse division, Vice news did some incredible stories both in video and on the website. Vice won Emmys, Peabody, Ward, even appeals.

So Vice's style goes from an affectation to a real thing. And we know a lot of those journalists, we know a lot of people who've made that work over time, who've worked in Vice's newsrooms. And it's actually really interesting to see how they sort of retroactively added an infrastructure of actual journalism to get to the thing that they were always supposed to be making. And that was very rigorous. And they were very daring in a lot of the work they did.

They got into a lot of trouble. But I think Vice's management took it for granted in an almost, like, shocking and irresponsible way. Yeah, I mean, they started essentially as a fashion magazine, right. That was like sort of the impetus behind, like, do's and don'ts. If you listen to one of Shane Smith's many Joe Rogan experience interviews, I think this one took place in 2011.

Liz Lipada

He talks about Vice as essentially a fashion magazine. The movement into something that becomes bigger is really interesting. The pitch is essentially, we understand the kids and you do not. The children are not watching television, and we speak to the youth in a way that nobody else speaks to the youth. That's why you should give us money.

In fairness, I say this as part of the group of the, quote unquote youth that they were talking about. They were doing stuff that was really distinctly different from what traditional media outlets were doing. That did speak more to the concerns of younger people, and that was largely being produced by younger people. Yeah, let's talk about the business. I think people understand what vice is, but the business that they're building around this, that's the thing that ultimately fell apart so completely.

And what's fascinating about that to me is the number of times Shane Smith was able to raise money at ever higher valuations did not appear to be linked to that business getting more sustainable or more scalable or even more predictable. It just seemed like he was able to raise a lot of money against this pitch of, we know what the kids are doing. That was a kind of frothy period because the interest rates were really low. And so there was a lot of money in the VC world, but also just around that, was looking for places to go where there would be a return on investment. So I think that was part of what fueled this, was this zero interest rate environment.

Liz Lipada

But I think that that pitch at that time was really something a lot of traditional media companies had been really frightened by the way that the Internet had taken their business. There had been a slowness to adopt online journalism. So this was the vice business model, right? Like fundamentally, they're putting content on the Internet. They don't quite know how they're going to monetize it.

They build some advertising infrastructure, they land a bunch of big sponsorships with big brands. But really they're just sort of running from big investment to big investment, kind of. They start putting together video, they start selling video to places like CNN with the idea that you can bring in a youth audience. From there, they cobble together all of these partnerships, and there's this idea that they have that if you shoot the same video and package it different ways, you know, for tv, for OTT, and for web, you can make a lot more profit off the same video because all you're doing is editing it and you get to, you know, decide your own margins and that that's going to be the business, which at the time was not a ridiculous thing to think. It turns out that you, like, need to handle things really differently for every single one of those markets.

Liz Lipada

But that was not obvious at the moment. It was not a ridiculous bet to make. That was sort of like kind of the business plan. But one of the things that I sort of was discovering was that there was never a moment where Vice went from being like a startup. And everybody who has worked at a startup is kind of familiar with the shit show environment that a startup is to like, installing, like a serious business organization with serious accounting and all of these sorts of functions that you need in order to be a grown up business, basically.

So that's the first phase of vice. We have to take a quick break. When we come back, we'll get to the company's really big turn.

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Liz Lipada

Sometimes things in the world of technology are complicated and need careful explaining. Sometimes they just need a little hard truth. I don't think anyone is going to buy a banana with crypto at any point in the foreseeable future. I'm Lizzie O'Leary, the host of Slate's what next? TBD, your clear eyed guide to technology, power and the future.

Friday and Sunday, wherever you get your podcasts.

Welcome back. We're talking to Verge senior reporter Liz Lepato about the downfall of vice. This is the big turn, the height of the Shane Smith era. He was out there collecting huge investments all the time, $250 million from a and e networks, a total of $400 million from Disney. And the valuations are just going up.

It seems like Shane wants to sell the company at a huge number, and no one will give him that number. So instead of selling, he just keeps raising more money. But then, right at the end of 2017, the New York Times publishes a bombshell report about sexual harassment and misconduct inside Vice. The company was very much a boys club environment, and that report, which landed right as the hash metoo movement was gaining steam, was too much to ignore. So Shane Smith stays on as executive chairman, but he steps down as CEO and replaces himself with Nancy Dubuque, a vice board member and television executive from a and e networks.

That could have been the moment when Vice media finally had an adult in the room and the organization grew up. But that is not what happened. The descriptions that I got of the people who were operating under Nancy were not complimentary. I'm just gonna read a couple of them. One of them was a fucking clown show.

Liz Lipada

Another one was comical. Another one was cartoonish. Screwball cast of suits. That's my favorite one. Yeah, I've been saying, I've been describing lots of things as a screwball cast of suits because it's just such a good turn of phrase I had someone.

Tell me he'd learned valuable lessons from his co workers about what never to do with a company. I had someone say that the people that had been brought in were essentially in vice costumes. They were people who didn't understand what Vice was or what Vice did, but they were trying to dress like hipsters. Part of what Shane did was he created, essentially a taste business. Vice had a sensibility.

It was politically aware, it was politically engaged. It was culturally aware and culturally engaged. And there was just a sort of je ne sais quoi about that. And Nancy, who was an extremely successful executive at A and E, was responsible for shows like Duck Dynasty and Ice road truckers, which are not really like the vice sensibility. That's not what Vice is doing.

And to some degree, if you are in the taste business, your job is to make hits that are recognizable as part of that taste. And so there was this sort of idea that you needed to know what a Vice story was or what a vice documentary was in order to really successfully run the business. And many people I spoke to said that Nancy never really got a handle on that part of it. So Nancy is now in charge. She's the CEO.

There's the vice newsroom and the website, the digital side. They have a cable channel called Viceland. They are selling shows to HBO and CNN. Is she running all of that? Is she running part of it?

Is she paying attention to some parts more or less than others? My understanding, based on the folks who spoke with me, is that she focused on the stuff that she understood, which was the cable channel. One of the problems that happened was that Vice lost its deal with HBO for Vice News tonight. That was a really important deal for the company. It was, as I understand it, profitable.

Liz Lipada

And it's always a problem when you lose a profitable part of your business, you know? So they made a deal with Showtime, and the guy who had been running the show exited, and they brought in someone else. But there were sort of a series of decisions or moments like this that were happening where there was a kind of changing of talent. There was a kind of, I guess, maybe lowering of expectations, one might say, like going from HBO to Showtime is, I would argue, a downgrade. I think that was part of what was going on.

One of the other things that I heard from folks who were working at the website was like, these verticals would be spun up as deals. So, like, broadly was one of the verticals that I heard had been spun up as part of a deal. The verticals are the sort of like branded topics. That's right. So you're thinking like, broadly noisy motherboard, like these sort of like blog within a blog moments.

And what I had heard from some of the people who worked at them was that, you know, they'd get spun up in response to some deal and then essentially forgotten about until it was, like, time to cut costs and then things would be cut. You know, there wasn't necessarily a lot of active management of what was going on. It was sort of haphazard. One of the things that really strikes me about this period in particular is there's the sensibility required to run a cable channel, which maybe you need a cable executive to do that. You need it to be more mainstream and more ice road truckers, whatever that thing is.

There's Vice's sort of classic video sensibility, and then there's the sensibility that's happening on the website, which is at this point winning awards, a Pulitzer Prize, Emmys, a Peabody. They are becoming a very aggressive, muscular news organization. They are out in the world causing trouble. And then over here is we need to program a cable channel with a bunch of shows about weed or whatever Nancy thinks Vice is. That seems like a real tension that I think your story got at more closely than anything else I've read about Vice before.

Liz Lipada

It's the tension of having different audiences. Right. The pitch of dealing with young people. A lot of us just didn't come back to cable. I didn't come back to cable.

The people who are going to be watching a cable channel are not necessarily the same people who are going to be interacting with the stuff online. It seemed like they got, you know, different audiences in cable versus, you know, YouTube, for instance. So there was sort of a disconnect between these parts of the business. It wasn't working as smoothly as perhaps, you know, people had hoped when they had set it up in this way. The tv world is, as you've described, like a hits business.

You need a hit show. You need a hit show on HBO. They're going to renew the deal. Your cable channel needs to be hit. Something has to happen.

The website is a much more plotting business, right? You put up some stories every day. The audience comes back, you sell some ads, and those seem like they operate on different time frames. And one of those things is a little more predictable, a little more consistent than the other. And then in your reporting, you find out that a bunch of expenses are being moved around these things to make them all look different or better at different times.

That's the part that really jumped out at me in this story. Is that normal? Is that a particularly vice thing? Is that just a crazy, chaotic company that no one's in charge of? To me, Occam's razor suggests just chaos in an overwhelmed accounting department.

Liz Lipada

I had one division head tell me that they had essentially done their own shadow accounting in order to make sure that they were meeting their budget, because they couldn't rely on the actual accounting department to tell them because the actual accounting department was so overwhelmed. This is where that moment of not really building out the business part of the business kind of came back to bite vice. One of the things that I heard from two executives was that there was a NetJets account on the digital budget. And NetJets, if you're not familiar, is a private jet service. I thought that was certainly strange.

Two people took credit for canceling that. Two different people told me that they personally had done it. So there was just a level of organizational chaos there that in some ways made it incredibly difficult to run a real business. And the people I spoke to were kind of divided about Nancy Dubuque. Almost everybody agreed that she had done a wonderful job at A and E.

There was no real disagreement on that point, but there were people who thought that she had personally run the business into the ground because she didn't understand what she was doing. And there were people who thought what Shane had created was unfixable, and Nancy probably couldn't have saved it. And maybe nobody could have saved it. We have to take another quick break. We'll be right back.

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Neil I. Patel

I'm Taylor Lorenz, host of power user, and like many millennials, I can't afford to buy a house. Also, like many millennials, my TikTok and Instagram feeds are full of real estate videos, home tours, renovations, so much mid century modern furniture. People of all ages are still interested in real estate. They might not be in a position to buy, but that is not to say that we can't create content around real estate that they're interested in. This week, how content creators renovated the real estate industry.

Liz Lipada

Plus, the latest news. That's all on our latest episode of Poweruser.

We're back talking with Verge senior reporter Liz Lepado about what really happened at Vice. So in 2021, the company tried to go public through a SPAC deal. It was very much the trend of the moment. Right now, the biggest SPaC in the news is Trump's truth social, which is a great example of how a SPAC deal can generate a lot of attention and a lot of money without anyone doing the kind of due diligence a more traditional IPO would require. There was this period where it was becoming clear that things were changing in the business.

Liz Lipada

Some of that does have to do with the way that advertising is sold online. There is a kind of advertisement where there is essentially an automated bidding process and the lowest bidder wins. And so that just drives ad rates relentlessly down. And it's not just, you know, every media property that's involved in this. You're also essentially competing against a bunch of social networks which have gotten very big and very powerful.

So it's just a different period on the Internet than 2014 was. And this is like a time when there needed to be an adjustment, and there were some adjustments, but it seems like it was not enough. It's not enough money for, you know, the number of executives that they have. It's not enough money for all of their ambitions. It's very clear that they're going to need to do some kind of turnaround.

There's a sort of relentless contraction of the staff throughout all of this. A lot of the lower level folks I spoke to understood what was going on and they were just like, okay, so when's my number coming up? It's so funny that in the grand scheme of shady vice things, the SPAC deal doesn't even rank, because it's just like a thing that happened and then didn't happen. And then the point of a SPAC deal is to be listed as a public company. It's just the mechanism by which you get listed is not subject to as much scrutiny as a traditional IPO process.

But that scrutiny would have revealed that Vice didn't have a business. If they do the $3 billion SPAC deal and the company is listed publicly, then they're a public company, and they have to reveal their finances and do quarterly reports and, like, all the stuff. And wouldn't that have immediately revealed that there was nothing there? It would have revealed whatever was there. Whatever it was that was happening there would have been public.

Liz Lipada

And I am in many ways, very sorry that this deal failed, because I love a public company. I do. I love reading your financial reports, guys. I'm a sicko. What can I say?

Part of that was that they had raised money from TPG. They had a preferred stock in Vice Media. That meant that they got additional equity if the company didn't hit certain performance markers. This is reportedly, I think that's the Journal that had reported that out. The way that SPACs work is that there's just a company that is only money and hangs out on the market looking for an acquisition target.

And then when it finds an acquisition target, the two merge, and you have a publicly traded company that didn't exist before. What this does is it lets people in the company being acquired talk about what they plan for the future in a way that is not allowed in ipos. It would have been fascinating to see Vice go public that way in 2021, but it didn't happen. Another thing that almost happened, but didn't, was an acquisition deal with antenna Group, a european television broadcaster based in Greece. I am super curious about this, and if you are a person who is listening to this podcast and you know literally anything about this deal, let's say you're a lawyer somewhere, or perhaps somebody who is a financial person, like, please let me know.

I'm so curious. But what had happened was that Vice had a longstanding deal with Antenna. They had renewed the deal to make content for Antenna Group. And Antenna Group is like this greek company that operates a bunch of over the air television stations. It was, I think, over 200 hours of tv a week that they were making for antenna group.

There was an attempt at a sale process with Antenna Group and group black, which is another media owner, and nothing happened. The sale process failed. And after that sale process failed, Vice was in bad shape. So if you go and look at the bankruptcy filings, which I highly recommend, they're a very entertaining read. They had already taken three forbearances on their loans at that point, and the entity that was associated with the Centenna group deal didn't pay them, and it triggered the end of that deal.

Simultaneously, there was a IT group called Wipro that had won a judgment against Vice Media for not paying them, that froze Vice's bank account. That was the sort of immediate circumstances that led to this bankruptcy. Those things combined. Vice has to go bankrupt because it doesn't have the revenue coming in, and now its costs have skyrocketed. That seems like a very simple, like, you're the CEO of the company.

You got to see that train coming. Right. Like, how were they not prepared for these eventualities? Well, Nancy Dubuque quit was what happened. So she was prepared in a different way.

She was very prepared in a different way. She was prepared, yeah, no, she quit shortly after it was clear that antenna Group had pulled the plug. Shortly before the bankruptcy. You know, she had a note about being glad that she'd left the company better than she found it, which is confounding to me, because if that is better than she found it, like, how did she find it again? Feel free to contact me if you know.

Liz Lipada

So Dubuque quits. There are these co CEO's who are named Bruce Dixon and Josefa Lacadawalla, who are the two people who are CEO when Vice files for bankruptcy in May, May of 2023. That's right. There's another company that enters the picture here. Right.

Vice goes bankrupt, and then a huge investment group called Fortress shows up and basically buys it. It feels like Fortress now just controls Vice. Vice owed them a lot of money, and so there was a bidding process to buy Vice's assets because they were in chapter eleven bankruptcy, rather than chapter seven, where the whole thing shuts down. They essentially did a credit bid where they were like, well, forgive me, some hundreds of millions of dollars of debt, and then we'll own the company. And they won.

Liz Lipada

They own Vice. Now, there is a shell company that's left over that is like dealing with the bankruptcy, and those creditors from the bankruptcy can expect one to 2% of their money back. There's another through line here that we should just touch on briefly. One of the sources of revenue for Vice, in this whole period of mess, is money from the Saudis. The Saudis, I think, somewhat famously, are trying to launder their image by doing media, by doing sports, because they have a pretty bad human rights record.

Famously murdered a journalist named Jamal Khashoggi from the Washington Post. It's not great. And you see Vice needs money so desperately, it kind of runs towards saudi money. And they do a bunch of things that kind of, in retrospect, seem like they weren't worth the money, right? Not from a actual dollars and cents perspective, but from a.

If you want to run a newsroom with integrity, you should not do some of the things they did in response to the money. Vice had a relationship with the Saudis before Khashoggi was killed. That's true. After his murder, Vice said they were reviewing their contract with the saudi publishing group SRMG. And then there were sort of these secret things that occurred.

Liz Lipada

Vice secretly organized a music festival in 2020 for the Saudis. There was the ad agency. Its called Virtue was pitching marketing campaigns to promote Riyadh in 2022. There were talks with saudi media conglomerate NBC Group, which had also taken a 30% stake in antenna in 2022. And then Vice eventually did go through with that partnership directly, which was announced in January 2023.

The Guardian started reporting stuff out of the London office, which was that Vice was, quote, repeatedly blocking news stories that could offend the saudi government. And also that employees who were working on the saudi joint venture had replaced a photograph of a memorial protest with a giant map of Saudi Arabia. Not great, I would say, from a newsroom perspective. But the thing that I still am puzzled about when it comes to antenna group is that if you go into the bankruptcy filings, there is an entity called GMN Cayman. This is the entity that was paying vice for the antenna group deal.

There's a second one called GMN Cayman Holdco, which was the entity that agreed to make payments to terminate that deal. I didn't find either of those things on Google Search except for in the vice bankruptcy documents. And so I went to the Cayman Islands business registry. And by the way, it is expensive to get these documents. The address is the same as a law firm there, and there are two directors who are named.

Both of these men match with some LinkedIn profiles of guys who worked for S and B Capital, which is, quote, the investment banking and asset management arm of the Saudi National bank headquarters in Riyadh. As we were writing the story, my view of this was like, these are some dots. We invite the audience to connect these dots. Right? Like, it's hard to know.

And I think even as you were reporting the story, people were asking you to figure out this connection between antenna and vice in the saudi money. There's something about how Vice was finance at the end, the underlying foundation of its finances, that suggests that actually its business was nothing. It was just taking saudi money in some way or another, or taking money from antenna in some way or another to make stuff that had no relationship to the consumer brand that was being expressed in the United States. One of the things that was frustrating for me was like not being able to crack antenna, because I genuinely would love to know what happened there. Was there more than meets the eye?

Liz Lipada

I mean, was there a real business advice that just didn't sell because vice didn't know how to pitch itself, for instance? Because that's a real possibility, too. It's possible that vice just didn't understand in those acquisition talks how to tell a coherent story about what it was. It's possible that Antenna looked at the books, realized that the deal was one of the things that was kind of holding the company together, and then pulled the plug to drive it into bankruptcy so they could buy it on the cheap. Like, there are lots of ways this story can go.

And I just don't know what happens to be true here. I just know that there are these signatures, these directors for this company that have nothing to do with antenna, that are tied to the Saudi National bank. The rest of the timeline is fairly straightforward. In May 2023, Vice filed for bankruptcy. In August 2023, it sells itself to Fortress for $350 million.

And in February 2024, the company stops publishing to the website, lays off hundreds of people, including huge numbers of journalists, and pivots to being a production studio. Theres something inevitable about this. What if Vice always should have just been a production studio? It's hard to monetize websites, and Vice was known for its video operation for like 20 years. It feels like a lot of people should be asking why it took Vice so long to get here.

Liz Lipada

If I knew this kind of thing, I would be a media executive instead of a reporter, right? Maybe. Sure. Let's say sure. What was fascinating to me was that this Reorg didn't happen right after bankruptcy.

Because if it is the right answer, the time to do it is as quickly as possible. Because you want to cut as many costs as quickly as you possibly can. Right. Like you're in bankruptcy. Like the idea is to restructure the company in such a way that it becomes viable.

And so the faster you can figure out what to cut loose and what to sell and who to fire. You know, the faster you sort of get on the road to being profitable. So from that perspective, the idea of vice becoming a B two B studios business, that doesn't strike me as a bad idea. That seems like a perfectly viable thing. It's certainly an important part of what they were doing throughout all of these years.

It's just befuddling to me that it took until January for them to do it. The thing I keep coming back to is the sort of the screwball cast of suits where there was just a real, I think, reluctance to understand what business they were in and how to run it. That more than anything, kind of made this a little bit inevitable. There was just a. Not a clear picture of what vice itself was even in the minds of the people who were running it.

While all of this was going on, the salaries, again were quite high. There was a great deal of money that stayed on the balance sheet because those executives were not fired right away. There is an executive I spoke to who called the accounting there, fanfiction finance. Basically, they believed the pitch so thoroughly that they hadn't actually sat down to look at what they had. You know, like, it was like you just.

You were such a true believer in the thing that vice could be that you didn't really quite know what Vice was. That story is personified in Shane Smith. Right? Like that is Shane Smith selling people a tale. And then when he's no longer the face of the story, it gets quickly out of control and it spirals.

But he's still in the mix, right? There's a report in the wrap that he's trying to buy vice again. What is his relationship to the company right now? Reportedly, he was involved in brokering the fortress deal. This is, according to the Hollywood Reporter, the idea that his sensibility is going to be really necessary.

Liz Lipada

His deal making skills and his ability to, you know, sort of work things is going to be part of what leads vice out of bankruptcy is a bet that's being made. It's maybe worth discussing how much money Shane Smith made here. There's reporting on his divorce filing which showed that he made $1.6 million per year, plus 1400 a month in whatever perquisites are. And there was also an incentive for him to make deals. He got a 5% cut on his deals if a quarter of the revenue for the deal was profit.

His contract, according to New York magazine, 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 100 million out in 2014, he sold his shares on an episode of Desus and Marrow. In 2017, he talks about buying a $25,000 Pablo Picasso plate. In 2021, he sold one of his homes in Los Angeles for 48.7 million, according to Mansion Global. There's an episode of the Joe Rogan podcast in 2014 where Smith calls himself post economic and brags that he's a billionaire.

And, you know, I'm sure that some of that billionaire status had to do with the valuation of his shares. At the time, a lot of the people who were lower down the company really resented that because vice had a history of, you know, it was really difficult for freelancers to get paid. I spoke to one person who had their credit card cut off when they were on a reporting trip, where they were reporting on a human rights violation, and they were on the return trip just very, very recently out of the country they were in, where they were undercover when the credit card stopped working, who told me, you know, if it had happened 24 hours earlier, they would have been in a really dicey situation. This is in another New York magazine piece about vice. There was bragging about having, you know, young people at the company because you didn't have to pay them very much.

There was a sentiment among some of the people I spoke to who were outside of the executive suite, who viewed this essentially as a way for people who were execs to be really well compensated, kind of at the expense of the actual workers. And one thing that people really particularly resented was, right before vice filed for bankruptcy, they fired a bunch of people. And then because of the bankruptcy, those people did not get their full promised severance. And so you can go look at the GoFundMe for these fired people who were furious, because, of course, the bankruptcy filing reveals all of the executive salaries, and that a bunch of the people who had those salaries had gotten retention bonuses right before the bankruptcy. So that was a real point of contention among people who worked there was that there were people who did very, very well, and they were all at the top of the company.

Yeah. Let me ask you kind of the last big think question here. Shane Smith might want to swoop back in and fix vice, and he might want to bring that sensibility back, and he actually knows how to pitch it, and maybe he's the thing that makes this all go. Shane Smith is also a 54 year old, post economic potential billionaire who is buying Picasso China. He's living a very different life than the person who started the punk rock scene in Montreal and literally faked the idea of big distribution for it and made deals and did all this stuff.

He's a business person now. I think most people think of him as a media executive, not this punk rock entrepreneur guy. For a company that's built on sensibility. Shane Smith, 54 year old I sold my house for $48 million. Can he go and connect with a bunch of teenagers and be a rebel again?

It seems like the future of vice depends on the answer potentially being yes. I mean, it's not impossible. There certainly have been 50 year old media executives who have understood how to sell things to kids. There's not quite enough appreciation for how much vice was at the right place at the right time. Like when Vice moved into its Williamsburg space in 2015, it had displaced two indie rock venues.

Liz Lipada

There was always a sense of the commoditization of the cool that Vice was. And I think now when we talk about kids these days, we're talking about Gen Z. We're not talking about millennials, because we're 40, and a lot of us are parents, and we have 401 ks, if we're lucky, and all that stuff. We're boring. I am out of touch with the Gen Z sensibility, very blissfully.

So I don't mind my quiet life as a middle aged woman, but it is very, very different. For instance, there is less sex and fewer drugs. That's just true. That is true. Statistically, that is true.

Vice was very much a brand that was about sex and drugs. That was part of the appeal. And so if we're thinking about what appeals to Gen Z, what appeals to young people, what they're looking for, I don't know that it's Vice. It might very well be that Shane Smith still has a sensibility, that that is Vice's sensibility. But it may be that as a culture, we're not interested in that anymore.

That's a possibility, too. It's amazing that a private equity company called Fortress is going to have to figure that out. That's actually the least vice thing that could possibly happen in this whole situation. Liz, thank you. This story has been so much fun to work on with you and to watch you go through the reporting process.

I know it was emotionally harrowing at points, but it's a great story, and thanks for coming on Decoder. Talk about it. Yeah, my pleasure.

Thanks again to Liz Lepado for joining us on Decoder. You should go read her vice story. It's incredible. If you have thoughts about this episode or what you'd like to hear more of, you can email us@decoderverge.com dot. We really do read all the emails.

You can also hit me up directly on threads. I'm 1280. We have a TikTok. Check it out. It's ecoderpod.

It's a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts. Decoder is a production of the Verge and part of the Vox Media podcast network. Today's episode was produced by Kate Cox and Nick Stat. It was edited by Cali R.

Right. Our supervising producer is Liam James. The Decoder music is by breakmaster Cylinder. We'll see you next time.

The rise and fall of Vice Media

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1: Origins and Influence

2: Mismanagement and Decline

3: Bankruptcy and Aftermath

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