Time Warner in Talks to Buy Stake in Vice Media

June 10 (Bloomberg) - Bloomberg’s Jon Erlichamn examines Time Warner’s interest in Vice Media that would value the company at nearly $3 billion and how the deal may impact the media outlet’s group of other investors, including 21st Century Fox. He speaks on Bloomberg Television’s “Market Makers.”

Time Warner Inc. (TWX) is in talks to acquire a stake in Vice Media Inc., the company whose stunt-filled news reports have made it a standout for online audiences, according to people familiar with the matter.

The discussions value closely held Vice Media at about $2 billion, said the people, who asked not to be named because the negotiations are private. The talks are at a very early stage and a deal could still fall apart, they said.

As part of the deal, Time Warner may hand over HLN, a sister news network to CNN, the people said. While the channel has declining ratings, it would give Vice instant availability in more than 90 million households. The company already produces a show, also called “Vice,” for HBO, another of Time Warner’s cable channels. Last year, the program helped coordinate former basketball star Dennis Rodman’s controversial visit to North Korea.

Alex Detrick, a spokesman for Vice Media, declined to comment, as did Keith Cocozza, a spokesman for Time Warner. Both companies are based in New York.

An investment would give Time Warner’s TV business a property that’s successfully created content for new formats such as the Web, along with traditional TV. Vice Media, known for its savvy packaging of youth culture, attracts a younger male audience coveted by advertisers, including on YouTube.

Photographer: Peter Foley/Bloomberg

Shane Smith, co-founder and chief executive officer of Vice Media Inc., left, speaks during the TechCrunch Disrupt NYC 2014 conference in New York. Smith had said a March interview with Bloomberg TV that Vice Media may pursue an initial public offering. Close

Shane Smith, co-founder and chief executive officer of Vice Media Inc., left, speaks... Read More

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Photographer: Peter Foley/Bloomberg

Shane Smith, co-founder and chief executive officer of Vice Media Inc., left, speaks during the TechCrunch Disrupt NYC 2014 conference in New York. Smith had said a March interview with Bloomberg TV that Vice Media may pursue an initial public offering.

Vice, which started out of Montreal in 1994 as a fanzine, stands in stark contrast to Time Inc., the almost century-old magazine brand that Time Warner spun off as a separate company this month.

Fox Stake

The upstart already has relationships with established media companies. Rupert Murdoch’s 21st Century Fox Inc. took a 5 percent stake last year for $70 million, valuing Vice at $1.4 billion, and Murdoch’s son, James, sits on the company’s board. Time Warner has no interest in buying out Fox’s stake, the people said. Dan Berger, a spokesman for 21st Century Fox, declined to comment.

Vice is poised to double revenue to $1 billion by 2016 and could pursue an initial public offering, co-founder Shane Smith said in a March interview on Bloomberg Television.

The talks with Time Warner were reported yesterday by Sky News, which said that one potential deal structure involved Time Warner injecting its HLN news channel into Vice Media in return for about half of the enlarged company.

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison

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