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21st Century Fox takes 5% stake in Vice Media

By | Published on Monday 19 August 2013


21st Century Fox has taken a 5% stake in Vice Media, the Financial Times reported over the weekend. The $70 million deal gives Vice a valuation of $1.4 billion, and will also reportedly see the company utilise 21st Century Fox’s Star TV in India and its stake in Sky in the UK, Germany and Italy to further push out its brand.

One of two companies formed when News Corporation was split in June this year, 21st Century Fox controls its predecessor’s broadcasting and film assets, while the publishing side of things still operates as News Corp, suggesting the new investor’s interest in the Vice company is more in its online video-based output, rather than those operations more closely linked to the original Vice magazine.

Rupert Murdoch remains CEO and Chairman of the company, and his involvement with Vice has proven controversial since the deal was announced.

However, Vice co-founder and CEO Shane Smith said that taking money from a larger firm was essential for growth, telling the FT: “I want us to be the next MTV, ESPN and CNN rolled into one – and everyone always rolls their eyes. The reality is that MTV was bought by Viacom and CNN went to Time Warner. We have set ourselves up to build a global platform but we have maintained control. [This deal] gives us the freedom to do what we want to do”.

Murdoch’s interest in Vice was already knonw. In October last year the media baron tweeted: “Who’s heard of Vice Media? Wild, interesting effort to interest millenials who don’t read or watch established media. Global success”.

Asked by one follower if his interest was an indication that he planned to buy the company, Murdoch replied: “No way! Last thing they need is corporate sponsorship”.

With the majority stake in the company still held by senior management, outside shareholders currently own 25% of Vice, and include marketing giant WPP, merchant bank Raine and former Viacom CEO Tom Freston. The latter said of 21st Century Fox’s investment: “The idea was to raise capital to help fund a lot of the initiatives we want to undertake more aggressively outside the US – but also have some strategic alliances with a company that has robust distribution”.

Freston added that maintaining its appeal to its core audience, while aligning with investors and brands, was key to Vice’s continued success, saying: “Everyone wants to do business with [Vice but] they have to pick through [the offers] and keep reinventing themselves”.