GoDigital wants to buy Vice Media

When Suroosh Alvi, Gavin McInnes, and Shane Smith founded Vice magazine, which later expanded into Vice Media, they built a business based on the counterculture image. Smith once He had recorded himself, almost naked and drinking alcohol, and touring the media corporation’s headquarters in Brooklyn, New York.

The company name is Vice. It is self-explanatory.

Next week, deputy, one time worth At $5.7 billion, it plans to sell itself out of bankruptcy territory. The little-known Los Angeles-based company it wants to buy has a fantasy culture incomparable with those early days of Vice, and will almost certainly be ridiculed.

GoDigital Media Group is a privately owned conglomerate that owns the rights to video and music, mainly in the Latin genre, and a consortium of different companies. The company has such low visibility, and currently has no physical headquarters after closing its Los Angeles office during the pandemic. GoDigital plans to open a new office in Los Angeles later this year. Its executives have been running the business remotely since 2020.

Initially, co-founders Jason Peterson, 41, and Logan Mulvey, 38, used the cash flow from music licensing rights to build a business around digital media distribution, connecting creators with retailers by developing a cloud software company called ContentBridge in 2010. GoDigital It later expanded its rights business to include those of Jason Derulo and last year’s TI, GoDigital I invested $100 million in this division for future growth. Ownership of music rights makes up the bulk of the company’s revenue and valuation.

In recent years, Peterson, CEO and CEO of GoDigital, has modeled the company as a miniature Berkshire Hathaway in which he tries to play what’s called the “infinite game” — owning enduring businesses that hit consumers’ emotion points.

GoDigital has made eight different acquisitions since 2020 involving media and commerce. Peterson and Mulvey followed up on struggling assets with consumer brand recognition. they Acquired YogaWorks for $9.6 million in 2021 after filing for bankruptcy in October 2020. Last year, the pair ripped off assets from bankruptcybringing together Eastern Mountain Sports and Bob’s Stores retailers $70 million.

portfolio total It now includes seven companies after merging two of its companies, Latin media companies Mitu and NGL Collective, which was co-founded by actor John Leguizamo. GoDigital employs about 1,300 people through its subsidiaries and generates annual revenues in the hundreds of millions.

Peterson said the company wants to “inspire happiness” along the way, which evoked the opposite of the straightforward culture Smith brought to Vice.

“Our goal is to create feelings of joy and happiness for our customers and employees,” Peterson said. “What sets us apart is our long-term perspective. The point of an infinite game is simply to keep playing to make sure the game keeps going. And when you live and work in that kind of model, you live and work in the compound interest model.”

Sean “Diddy” Combs insurgency A person familiar with the matter said he is also considering making an offer. A Revolt spokesperson could not be reached for comment.

The people, who asked not to be named because bid details are private, said Fortress Investment, the vice president-turned-owner’s largest creditor, is managing the sale and has pledged to back part of GoDigital’s bid and other potential bids. Fortress, along with Soros Fund Management and Monroe Capital, has committed to bidding for a $225 million horse chase.

A Fortress spokesperson declined to comment.

GoDigital’s opaque finances and jumble of smaller assets raise doubts about its ability to acquire a vice-sized company. Chief Strategy Officer Craig Grewe, who was tasked with finding acquisition targets when he joined the company last year, said GoDigital is in talks with other equity partners about a pitch. He declined to reveal any names.

“I can understand the suspicions if people haven’t heard of us,” Grywe said. “We have the money to buy it. We are serious about our bid. We are also confident that the sellers view us as legitimate and credible bidders. We are confident that we can run the business and do so profitably.”

Peterson and Mulvey said they wanted to own Vice because they believed it was poorly managed. They cite the company’s profligate spending, specifically wondering Why rent 20 offices and production centers around the world rather than having employees work remotely. The co-founders are in talks with Alex Wallace, former head of media and content at Yahoo from 2020 to 2022, to be the new CEO VP if GoDigital buys the company, according to people familiar with the matter. Wallace declined to comment.

As CEO, Peterson said he tries to align employees of his portfolio companies with their own interests. The Genius Zone is a concept borrowed from “The Big Leap” by Guy Hendrix It is about the intersection between what Someone who loves and what they are Good at work, Peterson explained. He said he would preach that message to Vice employees on day one if GoDigital acquired the company.

“I’m going to go out there and I’m going to treat everyone as human beings, and we’re going to try to figure out what are their individual goals, what are their values?” Peterson said. “Because when we work at the intersection of what we like and what we are good at or are good at, we will do well. It does not matter how good we are at something if we do not like it. We will not do it for long. When you have high degrees of alignment of purpose between the individual and the organization, that is The time when magic happens.”

When business conversations turn to concepts like happiness and value alignment, it’s easy to think of WeWork founder Adam Neumann Mission to raise awareness of the world and blink. It’s particularly annoying that the airy locale matches Vice’s original mission. Smith, the former Executive Vice President and CEO, could not be reached for comment.

GoDigital executives show no embarrassment about the New Age-style business school language. They believe connecting passion and purpose creates an “amazing positive feedback loop for the company,” Peterson said.

“Recognizing that people make decisions based on their emotional state, our goal is to inspire happiness through an ecosystem of content, community and commerce via consumer passion points,” said Greiwe. “Now I am the one who dreams about it at night. There is an underlying belief in making the impossible possible and doing it before anyone else.”

Vice was Revenues amounted to about 600 million dollars last year And it wasn’t profitable, Axios reported last month. Vice has been cash flow negative over “several years” On filing for bankruptcy.

“There’s no reason why Vice isn’t profitable today, but because of past mismanagement,” said Peterson.

But simply knowing what the deputy staff wants to do and making sure they do it doesn’t solve problems like a weak ad market or competition for content. However, Peterson and Mulvey see similarities between Vice’s work and several companies companies they already own. Mulvey referred to YogaWorks as a company that has moved GoDigital to cater to new ways of consuming.

With YogaWorks, GoDigital has attempted to disrupt the in-studio yoga consumer base with an online subscription service offering digitally distributed in-home classes. Mulvey said YogaWorks closed all of its traditional locations as part of its bankruptcy reorganization and “lost a very small number of customers” as GoDigital moved the business online.

Switching from a studio yoga practice to an indoor yoga practice is like changing your media consumption habits, said Mulvey, who took over as CEO of YogaWorks in January.

“People consumed Vice on HBO or cable TV,” said Mulvey, referring to Vice’s website. Now it’s canceled on HBO and vice cabling network. “We must make sure we understand our followers and customers that the way we grow business makes sense for how people consume news, media, fun or exercise on the go.”

Peterson noted that Vice’s business model is similar to NGL-Mitu. Both make money from branded content and social amplification.

“This is not a new type of business for us,” Peterson said. “It’s a cross-platform network. We know how to operate it.”

Grywe added that Vice’s “fundamentals are strong” and said GoDigital has no plans to sell any of Vice’s assets, including women-focused refinery29, which Vice acquired for $400 million in 2019, and Local advertising agency, Virtue.

“The brand value of Vice and Refinery29 is unmatched in the market,” said Greiwe. “It doesn’t make sense for Vice News to exist separate from Vice Publishing. And why not have Vice Studios on top of all that with the IP contracts that are in-house?”

Peterson acknowledged that much of his interest in buying Vice is that he believes it is a good candidate for implementing his preferred culture and management style, which he calls the “GoDigital Way.”

If he’s right, then all Vice ever needs to succeed is a bankruptcy process to service its outstanding $834 million in debt and a little more genius than the Districts.

— CNBC’s Lillian Rizzo contributed to this report.

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