A&E Networks is reportedly buying a 10 percent stake in digital media company Vice Media.
According to the Hollywood Reporter, a spokesperson confirmed the deal on Aug. 29 in which A&E will pay $250 million in exchange for a 10 percent share of Vice.
The Hollywood Reporter points out that it was only a little more than a year ago when Rupert Murdoch's 21st Century Fox invested $70 million in Vice for a 5 percent stake, which valued the company at $1.4 billion at the time. After A&E’s recent move, Vice is reportedly now valued at more than $2.5 billion.
Vice began as a free magazine more than 20 years ago in Montreal, Canada. Now, the company is recognized for its powerful digital presence, with properties including a magazine, a website, and a record label. But web video is a strong focus of the company’s digital presence. Vice even has its own video production company. And, perhaps most importantly for A&E, Vice primarily appeals to a young male audience, which, as the New York Times points out, has proven “to be an elusive demographic for mainstream media companies.”
Although digital is the focus and the strength of Vice, company CEO and co-founder Shane Smith has reportedly had an interest in expanding into traditional TV for some time. “The biggest thing we were looking for was complete independence,” he explains. “Everybody wanted a majority stake or a big stake. We didn’t want to give up a big stake.” With A&E buying a minority stake, it appears that Smith got what he wanted.
This new partnership gives Vice potential access to A&E’s several prime television channels, including History, Lifetime, and the network’s flagship channel, A&E. The New York Times even suggests that A&E could eventually “provide Vice with its own cable channel.” A&E is owned by Hearst Corp. and Disney-ABC Television Group.
The news about the A&E/Vice deal comes just after Time Warner withdrew its interest in Vice. Time Warner had reportedly been eyeing Vice as a possible property to merge with its HLN channel. Headline News, or HLN, is part of CNN Worldwide network, a division of Turner Broadcasting System and a subsidiary of Time Warner.
