Punk news provider Vice Media may pursue IPO as revenues head for $1bn
Vice Media, the company that combines punk culture with online journalism, is poised to double revenue to $1bn (€0.73bn) by 2016 and may pursue an initial public offering, co-founder Shane Smith said.
The company, backed by billionaire Rupert Murdoch, expects to reach that mark in 12 to 18 months, with profit margins targeted to widen to 50pc of sales from 34pc now, 44-year-old Mr Smith said.
With young, sometimes tattooed reporters filing stories from a snake-infested island off Brazil or the civil war in the Central African Republic, Vice Media attracts a male viewer coveted by Web and TV advertisers. The growing online, mobile and TV business could have a market value equalling Twitter's $28.9bn if Vice Media goes public, Mr Smith said.
"We'd be stupid not to test what the market would bear," said Mr Smith, who is chief executive officer. "There's a lot of money sloshing around in the system, obviously valuations are high."
Closely held Vice Media, based in New York, supplies news and entertainment online to young audiences. It sells a programme to Time Warner's HBO and produces "The Vice Guide to Everything" for Viacom's MTV. Reporters file stories that shun conventional journalism rules and often include profanity.
In one episode on MTV, they sneak into North Korea as tourists and hang out with a Russian mobster.
Murdoch's 21st Century Fox acquired about a 5pc stake in Vice Media last year, according to Mr Smith. The price was $70m, Fox said in a regulatory filing, suggesting a valuation of $1.4bn. The investment came after Mr Smith and Mr Murdoch (83) chatted over drinks at a bar in Brooklyn. Mr Murdoch's son, James sits on the company's board.
"One of the reasons we did the Fox deal was to stay independent, so we could run the business the way we wanted to run it," Mr Smith said.
Other investors with board seats include MTV founder and former Viacom CEO Tom Freston, the advertising agency WPP and Raine Group, an investment bank, Vice Media said in 2011.
Vice Media started out as a small punk magazine in Montreal in 1994, then moved into video after making its content available online. (Bloomberg)
JON ERLICHMAN AND ANDY FIXMER