Vice Media ended their talks with Time Warner this morning, but they had an ace up their sleeve.
The Financial Times says that Vice is finalizing the sale of a 10 per cent stake to A&E Networks, the cable television group jointly owned by Walt Disney and Hearst Corporation, in a deal valuing the digital media company at $2.5bn.
Vice and Time Warner broke off talks earlier Today over the purchase of a stake that would have valued the group at about $2bn.
The Financial Times says that A&E will pay $250m for 10 per cent, which represents a steep increase in Vice’s value.
Last year it sold a 5 per cent stake to Rupert Murdoch’s 21st Century Fox for $70m, which then valued it at $1.4bn.
Vice will produce digital and cable programming for A&E as part of the deal but it will not currently take over any of the running of any of the company’s cable channels, which had been part of its negotiations with Time Warner, according to people briefed on the negotiations.
The latest deal was negotiated between Nancy Dubuc, president of A&E Networks, and Vice.
“It’s a great deal for us,” said Shane Smith, Vice’s chief executive. “It means we can preserve our independence and it gives us a war chest for another three years of dramatic growth.”
Vice is “exploring channel possibilities” with A&E, he added, in addition to producing programming.