Vice CEO’s departure signals fallen hopes for digital media

When Vice Media named Nancy Dubuc as its new CEO in 2018, her contract hinted at one of her missions. Sell the company — at the time a darling of the media industry — and she could cash in on a big stock grant, according to a copy of the contract obtained by The New York Times.

So far, that hasn’t come to pass. On Friday, Dubuc said she was leaving Vice, which investors expect is worth far less than before she took over.

Just a month ago, Dubuc announced publicly that the company was for sale. No deal has materialized yet.

Her unexpected departure — her last day is Friday — and Vice’s struggles in recent years highlight the fallen fortunes of a group of digital media companies that not long ago was talked about as the future of the industry.

Vice, which was hailed as a new-media colossus at the height of its eye-popping valuation of $5.7 billion, has been written down by some of its initial backers, including The Walt Disney Co. The company has debts piling up, and it is now expected to sell for far less than that sky-high valuation.

A person with knowledge of the sales process said that bids to acquire Vice were due soon, and that the company would likely sell within the next 60 days.

Other top digital media companies, such as BuzzFeed and Vox Media, have had similar setbacks. Investor enthusiasm has waned as those companies have struggled to live up to some of their lofty ambitions, digital advertising shifted increasingly to tech giants like Alphabet and Meta, and legacy media companies began focusing on catching up to streaming giants like Netflix.

“The market has corrected back to the basics,” said Keith Hernandez, a former BuzzFeed executive who is a co-founder of the digital consultancy Launch Angle. “Potential and promise have gave way to profit margin and efficiency. Sexy just doesn’t sell.”

In a note to the staff Friday, Dubuc said that although Vice faced business headwinds, the company had become less reliant on advertising during her tenure and had made strides to become more financially independent.

She also nodded to other improvements under her leadership, including creating a more inclusive workplace environment. Dubuc joined Vice shortly after investigations into the company’s culture, including by the Times, revealed incidents of sexual harassment against women who worked for the company.

“I know you are among the most resilient, creative and determined talent in the business, and your futures are bright and hopeful,” Dubuc wrote in her email. “Remember what I try to remind you, and that is to appreciate how far you’ve come.”

Reached by phone Friday, she declined to comment further.

In a statement, Vice’s board said Dubuc had joined the company during a critical period and “positioned the company for long-term success,” adding that Vice would soon announce new leadership for the company.

Vice declined to comment on its boardroom deliberations.

Dubuc replaced Shane Smith, a founder of Vice, who had struck a series of deals that drove the company’s valuation ever higher but left it with onerous financial obligations to its increasingly anxious investors, who were antsy for an exit.

There was a major point of tension at the beginning of Dubuc’s appointment.

In March 2018, Vice’s board of directors gathered over teleconference in a special session to select its new CEO, according to a copy of the minutes of the meeting obtained by the Times and two people with knowledge of the board’s deliberations. Smith, a board member, told other directors that leaks to the press were forcing the company to speed up some of its decision-making.

In addition, Kevin Mayer, a board member who was then a high-ranking executive at Disney, expressed frustration that he did not know about Dubuc’s potential hiring until it had reached the final stages. Disney had an ownership stake in Vice and A&E Networks, where Dubuc was CEO.

Still, the board approved Dubuc’s hire, expressing optimism that an experienced executive with her track record could address the cultural issues at Vice and improve its financial performance before a potential sale. Mayer, who was irate, abstained from the vote.

As part of her contract, Dubuc was granted tens of thousands of shares in Vice, according to the copy of her contract. Because the company is private, selling shares can be a cumbersome process. The shares would be easier to cash in if the company sold or went public. Stock grants are a common incentive offered to employees at startups. Dubuc was also given an annual salary of more than $1.5 million and a hefty sign-on bonus, according to the copy of her contract.

In the years since Dubuc joined the company, it has struggled to reach sustained profitability. Last year, the company missed its revenue target of roughly $700 million by about $100 million. Many of Vice’s biggest backers, which included Disney and A&E Networks, are no longer expecting to turn a profit on the investments they made in the company.

In an interview last month about plans to sell some or all of the company, Dubuc said Vice would break-even in 2023.

At the time, she said the company had been facing serious problems when she arrived, noting that it was “unclear whether the company could survive.”