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Media
Vice Media’s Fall: Shane Smith and How the Company Burned
Just weeks after the company he founded entered Chapter 11 bankruptcy last May, Shane Smith jetted to the French Riviera. But this wasn’t a vacation for the 54-year-old flamboyant former Vice CEO to drown his sorrows. Smith landed in Cannes on a mission to save the media company that he had started as a scrappy punk music magazine in Montreal three decades ago from the financial scrap heap.
Smith, the brash face of Vice, had been quietly operating behind the scenes since stepping aside as CEO in 2018. In his new capacity as executive chairman, he worked the phones and hustled for deals as only he knew how. Now, accompanied by his chief of staff, Alon Soran, he was at Cannes Lions, the annual advertising confab that attracts the monied set looking to do business, desperate to ensure the company he had built didn’t disappear into liquidation and irrelevancy.
In a series of previously unreported meetings with Fortress Investment Group’s managing director, Brian Stewart, Smith convinced Stewart that Vice would have another life, two people familiar with the matter tell The Hollywood Reporter. It was the final play by the master dealmaker on his quest to get the company, now run by CEO Bruce Dixon, to financial stability.
And it worked. On June 23, an announcement went out that a bankruptcy court had approved a $350 million sale of Vice to one of its prior investors, hedge fund Fortress, which led a consortium of buyers in the deal. Smith had pulled off one last magic trick. “In the lore of Shane, this is what he does,” a person familiar with the Cannes meeting says. “Whether it’s on a yacht, or wherever it is, you have this living-large moment and everyone agrees, ‘We are going to do this.’ That’s how he gets the big deals.” Smith did not respond to a request for comment.
For a company valued at $5.7 billion in 2017, it was a fire sale of a transaction. Disney CEO Bob Iger held talks with Shane Smith in 2015 and 2016 about buying the company for $3.4 billion, according to a person with direct knowledge of the discussions. (Disney did not respond to a request for comment.)
But even that valuation turned out to be wildly inflated. Many current and former Vice employees argue that Smith knew the company was puffed up on air because he was the one puffing it up — and was well compensated for doing so. Smith is believed to be paid a multimillion-dollar annual salary and likely far more in commissions and bonuses under the terms of a multiyear deal that began in 2019 and is scheduled to finish at the end of 2024, a well-placed source says.
Smith knew that a little bit of crazy and a little bit of cool would prove irresistible to legacy media figures. He understood that media has the ability to get people irrational. Who doesn’t like a bit of buzz? Even when that hype is as unhealthy as a sugar high.
By selling “cool” and boasting a much sought-after youth audience, Smith was able to get aging moguls to open their wallets. Murdoch’s 21st Century Fox paid $70 million for a 5 percent stake of Vice in 2013. Two years later, Iger made two bets each of $200 million as Vice unveiled plans to launch TV channel Viceland, which would be distributed in 70 million homes. Murdoch’s youngest son, James, would throw in more money in 2019 and 2021 as the company struggled to stay afloat.
Why did these very serious multibillion-dollar media companies put big bets on Vice? If you’re a top dog at a media organization it’s your job to roll the dice. To put your chips on some squares. Shareholders are looking at you to create optionality. Murdoch and Iger were seeing growth in a business, media, where they didn’t usually see growth and, crucially, they were seeing a notoriously hard demographic to attract and one advertisers flock to: youth.
At the same time, there was an effort made to professionalize the executive structure of Vice. In 2018, Smith brought in former A&E CEO Nancy Dubuc to clean up the books and try to sell the company. But she and her senior leadership team weren’t able to close a deal or produce many programming hits. (Vice’s deal with HBO expired in 2019, while its run at Showtime ended last year.) Dubuc, who departed the company early last year, did not respond to a request seeking comment.
Vice’s bankruptcy filings paint a fascinating narrative of a company cratering under wide-scale industry disruption. It’s a business without a consumer revenue stream that depends too heavily on advertising and partnership deals. Vice “relied on external funding, raising both debt and equity capital to fuel its rapid growth and to fund expenses in certain parts of the business,” wrote Frank A. Pometti, a consultant hired as the chief restructuring officer of Vice Media, in a May 2023 declaration filing. “Although these fund-raising efforts helped to finance Vice’s growth, they ultimately led to the company being burdened by a highly leveraged and unusually complex capital structure.”
With the Feb. 22 disclosure that Vice is getting out of the news business, all that remains is Vice TV, a joint venture of A&E and Vice, the ad agency Virtue and Vice Studios. The question is whether Fortress has a vision other than reducing overall spend as it tries to bring in revenue from a number of stand-alone businesses. “Vice will become a B2B company and no longer pursue a direct-to-consumer strategy,” a person familiar with Fortress’ thinking says, adding: “Vice will be on a path to profitability, for the first time.”
Craig Barritt/Getty Images
At its core, the story of Vice is one of money, greed and the cult of personality. Was Shane Smith a visionary or a villain? Like the characters and stories that the journalists at Vice News pursued over the past 11 years of award-winning journalism, it might be a more complicated portrait than that.
“I remember we would be drunk at a bar and he would have his lips up against my ear holes and he would be like ‘We are going to be so rich. We are gonna get so fucking rich’ and I was like, ‘Dude, it’s Friday lets focus on having fun and not really dwell on how rich we are going to be,’” says Vice co-founder Gavin McInnes, who left the company in 2008 and went on to found the Proud Boys, the far-right group that made headlines for its members’ role in the Jan. 6, 2021 Capitol riot.
“The beauty of Shane is he could have kept Vice going if it was a blog about crocheting mannequins,” McInnes adds of Smith’s fundraising prowess. “He could’ve sold swampland in Florida.”
But Smith did what many could not by taking a defunct lads mag that had been around for more than a dozen years and building it into the first new-media giant since MTV: from web video to sponsored content. With his innovation came big bags of money for other digital media companies, including BuzzFeed, Gawker and Vox, which helped to employ thousands of journalists. Arguably, even CNN and The New York Times took notice of the wave of innovation Smith had created in tone and style.
Whether it be luck or cunning, Smith got out just in time. He is known to enjoy visits to Vegas and, like any professional gambler, smartly cashed out when he was on top. “We have known that, as an industry, digital advertising was going to crash and burn,” a former Vice executive says. “The last 10 to 15 years, these companies were chasing an endless scale that is not sustainable.”
This ex-Vice exec adds, “Shane was able to raise a ton of capital over fifteen years, over and over, and get more money, but it was all smoke and mirrors. He was good at selling a brand and a vibe but it wasn’t real.”
On Feb. 26, Vice formally laid off more than 100 journalists days after CEO Dixon wrote in a memo to staff that “it is no longer cost-effective for us to distribute our digital content the way we have done previously.” The brand’s flagship website is likely to remain dormant, with the possibility that Fortress could shutter it and nuke archives of years of impactful journalism.
“What kept so many of us at Vice for so long was this sense of freedom to work on stories that few others would take on, let alone resource,” says Subrata De, former exec vp news and documentary. “It was an electrifying place with crazy internal pride around the work. That’s what makes the end of Vice News that much more crushing.”
This story appeared in the Feb. 28 issue of The Hollywood Reporter magazine. Click here to subscribe.
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Sometimes, you just have to return to the classics.
That’s especially true as Halloween approaches. While you queue up your spooky movie marathon, here are 10 iconic horror movies from the past 70 years for inspiration, and what AP writers had to say about them when they were first released.
We resurrected excerpts from these reviews, edited for clarity, from the dead — did they stand the test of time?
“Rear Window” (1954)
“Rear Window” is a wonderful trick pulled off by Alfred Hitchcock. He breaks his hero’s leg, sets him up at an apartment window where he can observe, among other things, a murder across the court. The panorama of other people’s lives is laid out before you, as seen through the eyes of a Peeping Tom.
James Stewart, Grace Kelly, Thelma Ritter and others make it good fun.
— Bob Thomas
“Halloween” (1978)
At 19, Jamie Lee Curtis is starring in a creepy little thriller film called “Halloween.”
Until now, Jamie’s main achievement has been as a regular on the “Operation Petticoat” TV series. Jamie is much prouder of “Halloween,” though it is obviously an exploitation picture aimed at the thrill market.
The idea for “Halloween” sprang from independent producer-distributor Irwin Yablans, who wanted a terror-tale involving a babysitter. John Carpenter and Debra Hill fashioned a script about a madman who kills his sister, escapes from an asylum and returns to his hometown intending to murder his sister’s friends.
— Bob Thomas
“The Silence of the Lambs” (1991)
“The Silence of the Lambs” moves from one nail-biting sequence to another. Jonathan Demme spares the audience nothing, including closeups of skinned corpses. The squeamish had best stay home and watch “The Cosby Show.”
Ted Tally adapted the Thomas Harris novel with great skill, and Demme twists the suspense almost to the breaking point. The climactic confrontation between Clarice Starling and Buffalo Bill (Ted Levine) is carried a tad too far, though it is undeniably exciting with well-edited sequences.
Such a tale as “The Silence of the Lambs” requires accomplished actors to pull it off. Jodie Foster and Anthony Hopkins are highly qualified. She provides steely intelligence, with enough vulnerability to sustain the suspense. He delivers a classic portrayal of pure, brilliant evil.
— Bob Thomas
“Scream” (1996)
In this smart, witty homage to the genre, students at a suburban California high school are being killed in the same gruesome fashion as the victims in the slasher films they know by heart.
If it sounds like the script of every other horror movie to come and go at the local movie theater, it’s not.
By turns terrifying and funny, “Scream” — written by newcomer David Williamson — is as taut as a thriller, intelligent without being self-congratulatory, and generous in its references to Wes Craven’s competitors in gore.
— Ned Kilkelly
“The Blair Witch Project” (1999)
Imaginative, intense and stunning are a few words that come to mind with “The Blair Witch Project.”
“Blair Witch” is the supposed footage found after three student filmmakers disappear in the woods of western Maryland while shooting a documentary about a legendary witch.
The filmmakers want us to believe the footage is real, the story is real, that three young people died and we are witnessing the final days of their lives. It isn’t. It’s all fiction.
But Eduardo Sanchez and Dan Myrick, who co-wrote and co-directed the film, take us to the edge of belief, squirming in our seats the whole way. It’s an ambitious and well-executed concept.
— Christy Lemire
“Saw” (2004)
The fright flick “Saw” is consistent, if nothing else.
This serial-killer tale is inanely plotted, badly written, poorly acted, coarsely directed, hideously photographed and clumsily edited, all these ingredients leading to a yawner of a surprise ending. To top it off, the music’s bad, too.
You could forgive all (well, not all, or even, fractionally, much) of the movie’s flaws if there were any chills or scares to this sordid little horror affair.
But “Saw” director James Wan and screenwriter Leigh Whannell, who developed the story together, have come up with nothing more than an exercise in unpleasantry and ugliness.
— David Germain
Germain gave “Saw” one star out of four.
“Paranormal Activity” (2009)
The no-budget ghost story “Paranormal Activity” arrives 10 years after “The Blair Witch Project,” and the two horror movies share more than a clever construct and shaky, handheld camerawork.
The entire film takes place at the couple’s cookie-cutter dwelling, its layout and furnishings indistinguishable from just about any other readymade home constructed in the past 20 years. Its ordinariness makes the eerie, nocturnal activities all the more terrifying, as does the anonymity of the actors adequately playing the leads.
The thinness of the premise is laid bare toward the end, but not enough to erase the horror of those silent, nighttime images seen through Micah’s bedroom camera. “Paranormal Activity” owns a raw, primal potency, proving again that, to the mind, suggestion has as much power as a sledgehammer to the skull.
— Glenn Whipp
Whipp gave “Paranormal Activity” three stars out of four.
“The Conjuring” (2013)
As sympathetic, methodical ghostbusters Lorraine and Ed Warren, Vera Farmiga and Patrick Wilson make the old-fashioned haunted-house horror film “The Conjuring” something more than your average fright fest.
“The Conjuring,” which boasts incredulously of being their most fearsome, previously unknown case, is built very in the ’70s-style mold of “Amityville” and, if one is kind, “The Exorcist.” The film opens with a majestic, foreboding title card that announces its aspirations to such a lineage.
But as effectively crafted as “The Conjuring” is, it’s lacking the raw, haunting power of the models it falls shy of. “The Exorcist” is a high standard, though; “The Conjuring” is an unusually sturdy piece of haunted-house genre filmmaking.
— Jake Coyle
Coyle gave “The Conjuring” two and half stars out of four.
“Get Out” (2017)
Fifty years after Sidney Poitier upended the latent racial prejudices of his white date’s liberal family in “Guess Who’s Coming to Dinner,” writer-director Jordan Peele has crafted a similar confrontation with altogether more combustible results in “Get Out.”
In Peele’s directorial debut, the former “Key and Peele” star has — as he often did on that satirical sketch series — turned inside out even supposedly progressive assumptions about race. But Peele has largely left comedy behind in a more chilling portrait of the racism that lurks beneath smiling white faces and defensive, paper-thin protestations like, “But I voted for Obama!” and “Isn’t Tiger Woods amazing?”
It’s long been a lamentable joke that in horror films — never the most inclusive of genres — the Black dude is always the first to go. In this way, “Get Out” is radical and refreshing in its perspective.
— Jake Coyle
Coyle gave “Get Out” three stars out of four.
“Hereditary” (2018)
In Ari Aster’s intensely nightmarish feature-film debut “Hereditary,” when Annie (Toni Collette), an artist and mother of two teenagers, sneaks out to a grief-support group following the death of her mother, she lies to her husband Steve (Gabriel Byrne) that she’s “going to the movies.”
A night out with “Hereditary” is many things, but you won’t confuse it for an evening of healing and therapy. It’s more like the opposite.
Aster’s film, relentlessly unsettling and pitilessly gripping, has carried with it an ominous air of danger and dread: a movie so horrifying and good that you have to see it, even if you shouldn’t want to, even if you might never sleep peacefully again.
The hype is mostly justified.
— Jake Coyle
Coyle gave “Hereditary” three stars out of four.
Read the full review here. ___
Researcher Rhonda Shafner contributed from New York.
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