Vice Media, which targets millennials and promotes coverage of “under-reported stories,” is in talks to be bought out of bankruptcy in a deal with Hungarian-American businessman-philanthropist George Soros and lender Fortress Investment.

The proposed reorganization to Fortress and Soros Fund Management, founded by 92-year-old Soros, would wipe out other investors, according to people familiar with the matter, who said the planned sale would value Vice at around $400 million. That’s a sharp decline from Vice’s $5.7 billion peak valuation in 2017, Wall Street Journal reported.

Vice is one of several digital news media firms that skyrocketed in popularity during the digital-media boom of the early 2010s but is now in distress.

BuzzFeed announced in April that it was closing its news division after continuing to lose money. Vox Media, which owns The Verge, Thrillist and New York magazine, laid off about 7 percent of its staff in January, citing ongoing financial difficulties in the digital-media industry. NBC News and MSNBC laid off about 75 staffers across divisions after a broader structural reorganization.

Adweek, a trade publication covering the ad industry, told staff it was cutting about 10 percent of its workforce. Fandom, an entertainment news company, laid off workers across some brands it had acquired in 2022.

“Vice’s planned bankruptcy is emblematic of the tough times new media companies that raised money at sky-high valuations have had as they tried to navigate a difficult advertising environment where most ad dollars go to Meta Platforms ’ Facebook and Alphabet’s Google,” Alexander Saeedy and Jodi Xu Klein wrote for WSJ. 

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The pace of bad news for digital news media has been “relentless and overwhelming,” Nitish Pahwa wrote for Slate. “The news itself is constantly, famously bad …. Readers are exhausted; web traffic—that all-important metric for bringing in ad dollars—is erratic. Job prospects are scarce, and solid freelance gigs (never mind sustainable ones) are hard to find.”

The turmoil caused by a historic slowdown in digital advertising is sparking worries among staff at online media companies about further and possibly deeper cuts beyond the mass layoffs and abrupt closures over the last few months.

Ben Smith, a former editor-in-chief of BuzzFeed News and author of “Traffic,” a history of the rise and fall of BuzzFeed,” credits a tough economy and huge shift away from social media for the troubles facing digital news media. Smith now leads online news site Semafor, which launched in the fall.

“The news industry didn’t really have a profit model other than trying to get eyeballs and earn digital advertising revenue,” said Courtney Radsch, who studies technology and media at UCLA, in an NPR report. “But what we saw is that the tech platforms, specifically Google and Facebook, ended up controlling that digital advertising infrastructure.”

Almost every Vice stockholder—including media mogul James Murdoch and private-equity firm TPG Group and Sixth Street Partners — would be wiped out under the proposed Vice Media reorganization, the people familiar said.

Vice is preparing to run a court-supervised Chapter 11 sale that could be filed as soon as this week, WSJ reported May 5. Another buyer could outbid Vice’s lenders for control in bankruptcy court, but Fortress is in prime position to take over the company, which has struggled for a year to find a buyer.

Earlier this year, Vice was in the middle of a sale process that was supposed to make creditors whole and secure new ownership that could chart a new direction for the company.

Group Black, a Black-owned media collective and business accelerator, made a bid that valued the company at around $400 million, the Journal reported. GoDigital Media Group, a California-based digital-media company, also bid about $400 million to buy Vice as part of this process, people familiar with the matter said.

Recently, Vice couldn’t pay many of its vendors and secured a $30 million “lifeline” from Fortress in late March. Two weeks ago, the company said it was closing Vice World News, a global reporting initiative that covered world conflict and human rights abuses.

Vice’s main businesses include the Vice Studios film and TV production unit, the Vice TV network, Vice News, and creative agency Virtue. Vice also owns female-focused website Refinery29, London-based Pulse Films and i-D, a digital and print-style publication covering fashion, culture and design.