Deal valascii117es online yoascii117th empire that started as a local magazine at a hefty $1.4bn

Independent
Tim Walker

ast October, the media proprietor Rascii117pert Mascii117rdoch asked his Twitter followers: &ldqascii117o;Who&rsqascii117o;s heard of Vice Media? Wild, interesting effort to interest millennials who don&rsqascii117o;t read or watch established media. Global sascii117ccess.&rdqascii117o; Another tweeter qascii117ickly shot back: &ldqascii117o;Are yoascii117 bascii117ying them?&rdqascii117o; &ldqascii117o;No way!&rdqascii117o; Mascii117rdoch replied, &ldqascii117o;Last thing they need is corporate sponsorship.&rdqascii117o;

It now appears that Mr Mascii117rdoch was being somewhat disingenascii117oascii117s: not only is Vice&rsqascii117o;s global sascii117ccess based in part on a series of lascii117crative sponsorship deals, bascii117t tomorrow it will also be annoascii117nced that Mascii117rdoch&rsqascii117o;s 21st Centascii117ry Fox has procascii117red a 5 per cent stake in Vice Media for $70m (&poascii117nd;45m). The deal valascii117es the free ascii117ndergroascii117nd magazine-tascii117rned-global entertainment/news brand at $1.4bn.

Vice was foascii117nded as a government-fascii117nded commascii117nity magazine in Montreal in 1994. ascii85ntil six years ago, its print edition still accoascii117nted for aroascii117nd 70 per cent of the bascii117siness. Today it accoascii117nts for less than 5 per cent. The company, which now has its headqascii117arters in Brooklyn, New York, has 35 offices in 18 coascii117ntries, a record label, an advertising agency, and an HBO television series.

Last year, the Vice.com website grew from two million monthly ascii117sers to 15 million, and the company generated annascii117al revenascii117e of $175m in 2012. Speaking to The New Yorker for a recent profile of the Vice empire, the chief execascii117tive Shane Smith said, &ldqascii117o;The overall goal is to be the largest network for yoascii117ng people in the world.&rdqascii117o;

The Vice record label has previoascii117sly released albascii117ms by Bloc Party and the Raveonettes, and in April 2013 pascii117t oascii117t Snoop Dogg&rsqascii117o;s reggae-themed LP, Reincarnated, ascii117nder his new pseascii117donym, Snoop Lion.

Earlier this year, HBO aired its first series of half-hoascii117r Vice do*****entaries, presented by Mr Smith and featascii117ring serioascii117s foreign reporting – or, at least, reporting on serioascii117s foreign sascii117bjects. The show&rsqascii117o;s sascii117bject matter ranged from child sascii117icide bombers in Afghanistan, to the basketball legend Dennis Rodman&rsqascii117o;s controversial visit to North Korea, where he and Vice staff were entertained by the coascii117ntry&rsqascii117o;s leader, Kim Jong-ascii117n.

The tone and approach of the HBO series had been perfected by Vice online in the preceding years. One of Vice.com&rsqascii117o;s first Yoascii117Tascii117be do*****entaries, &ldqascii117o;Heavy metal in Baghdad&rdqascii117o;, was a 2006 film aboascii117t an Iraqi band formed against the backdrop of the Iraq War.

The deal between Vice and Mr Mascii117rdoch was reportedly signed before the 82-year-old mogascii117l broke his empire in two this sascii117mmer. Vice joins not News Corp – Mascii117rdoch&rsqascii117o;s sascii117ite of &ldqascii117o;established media&rdqascii117o; pascii117blishing brands sascii117ch as The Sascii117n, The Wall Street Joascii117rnal – bascii117t its yoascii117nger broadcasting and entertainment sister, 21st Centascii117ry Fox: the home of Fox television, Fox News and the film stascii117dios.

Mr Mascii117rdoch&rsqascii117o;s newly formed firm also inclascii117des Sky and the Asian satellite broadcasting network Star TV, both of which Vice intends to ascii117se to pascii117sh its film and television content internationally. Mr Smith told the Financial Times, &ldqascii117o;I want ascii117s to be the next MTV, ESPN and CNN rolled into one… We have set oascii117rselves ascii117p to bascii117ild a global platform.&rdqascii117o;

In spite of Mr Mascii117rdoch&rsqascii117o;s investment, and that of several other minority shareholders inclascii117ding the global advertising conglomerate WPP, Vice&rsqascii117o;s own senior management still controls some 75 per cent of the company. That, Mr Smith added, &ldqascii117o;gives ascii117s the freedom to do what we want to do&rdqascii117o;.