Vice Media in talks to sell stake to A&E
Vice Media is finalising the sale of a 10 per cent stake to A&E Networks, the cable television group jointly owned by Walt Disney and Hearst Corporation, in a deal valuing the digital media company at $2.5bn. The sale could be announced as early as next week an comes after Vice and Time Warner ended talks on Friday over the purchase of a stake that would have valued the group at about $2bn. A&E will pay $250m for 10 per cent, which represents a steep increase in Vice’s value. Last year it sold a 5 per cent stake to Rupert Murdoch’s 21st Century Fox for $70m, which then valued it at $1.4bn. Vice operates a global network of online channels covering news, sport, technology and music. It has offices in 36 countries, a branding agency and an unconventional style – it took the former basketball star Dennis Rodman to North Korea to meet Kim Jong Un – which it blends with more serious reports from world hotspots. It produces a news magazine show for HBO, Time Warner’s premium cable channel, and recently won plaudits for a series of hard-hitting online video reports from a journalist embedded with the Islamic State of Iraq and the Levant. The company has built a large audience of younger, so-called "millennial" viewers, which have increased the company’s appeal to older, more traditional media groups. Rupert Murdoch is among its fans and once tweeted that the company was a "wild, interesting effort to interest millennials who don’t watch or read established media". Vice will produce digital and cable programming for A&E as part of the deal but it will not currently take over any of the running of any of the company’s cable channels, which had been part of its negotiations with Time Warner, according to people briefed on the negotiations. The latest deal was negotiated between Nancy Dubuc, president of A&E Networks, and Vice. "It’s a great deal for us," said Shane Smith, Vice’s chief executive. "It means we can preserve our independence and it gives us a war chest for another three years of dramatic growth." Vice is "exploring channel possibilities" with A&E, he added, in addition to producing programming. A&E specialises in reality fare such as Duck Dynasty, Storage Wars and Epic Ink, but also produces drama series like Bates Motel. Vice started life as a Canadian punk magazine, founded by Shane Smith, its chief executive, and two friends in 1994. It expanded globally over the next decade and in the past few years led a push into online video, encouraged by Spike Jonze, the film director who is a long-time friend of Mr Smith’s, and Tom Freston, a former chief executive of Viacom – who joined the Vice board. Mr Smith once said he wanted Vice "to be the next MTV, ESPN and CNN rolled into one". Its online channels are among the most popular on YouTube, held up by the video site in presentations to advertisers as an example of how brands can connect with audiences online: YouTube recently ran a television and print campaign singling out Vice News, one of the media company’s new ventures.