Disney’s Vice Writedown Doubles To $353 Million; Hulu Losses Continue In Q2

Disney booked a $353 million writedown on its investment in Vice Media, the formerly high-flying digital brand now run by former A+E Networks boss Nancy Dubuc.

Dubuc last week presided over a NewFronts presentation by Vice to digital advertisers, her first since taking the helm of the company last year, succeeding co-founder Shane Smith. While the company’s pitch to ad buyers centered on its youth appeal, losses have recently piled up. Disney’s $353 million “impairment charge” on Vice is more than double the $157 million it wrote down last November.

The company’s results have suffered from digital advertising headwinds affecting many companies battling Facebook and Google’s duopoly, as well as wan ratings performance at the Viceland cable network. Exacerbating the business challenges, which have prompted layoffs, a damning New York Times piece outlined accusations of sexual misconduct and a frat-boy culture that Dubuc and her team have been working to reinvent.

Disney has backed Vice through direct investments totaling $400 million as well as via its stake in A+E, a joint venture with Hearst. Before Disney closed its acquisition of 21st Century Fox, the Murdoch-controlled company had put $70 million into Vice, joining Time Warner and a range of private equity investors as Vice’s valuation surged to $5.7 billion. The Fox stake transferred to Disney in the merger, which closed in March.

Hulu, meanwhile, is continuing to post losses. Disney bought out WarnerMedia’s nearly 10% stake in Hulu in April. In the second quarter, which ended March 31, the company assumed a 60% ownership position in the streaming service after getting Fox’s position as a result of the merger.

Fox Tops Wall Street Forecasts In First Quarterly Report As Stand-Alone Company

In its financial report, Disney posted a net loss of $159 million attributable to noncontrolling interests, including Hulu, which was narrower than the $178 million in the year-ago quarter. The improvement was due to a higher loss from Disney’s direct-to-consumer sports business and the consolidation of a loss at Hulu, partially offset by growth at ESPN and Hong Kong Disneyland Resort, the company said.

At its investor day last Month, Disney said Hulu would become profitable in 2024.

This article was printed from https://deadline.com/2019/05/disneys-vice-writedown-doubles-hulu-losses-continue-in-q2-1202610345/