SpinMedia, the massive blog network that owns VIBE, Spin and other properties, is undergoing a restructuring of its business model after running low on venture capitalist funds and facing heavy debt. SpinMedia LLC will known be known as SpinMedia Group and has brought in a veteran executive to oversee the new operation.
The New York Post reported on the SpinMedia shift earlier this week, bringing to light some of the issues the company has faced. The restructuring is part of deal between SpinMedia and its creditors, wiping out $125 million in equity that venture companies placed into the business, and settles a $12.5 million from Silicon Valley Bank from 2013.
From the Post:
The old company known as SpinMedia LLC will now be known as SpinMedia Group. CEO Dale Strang would not reveal losses, liabilities or revenue, but insisted, “the biggest chunk of liability with the old company has been resolved.” Sources said that involved a settlement with Silicon Valley Bank.
The company has hired Tom Morrissy, a former publisher of Entertainment Weekly and OK! to be executive vice president and chief revenue officer.
The reorganization is similar to a bankruptcy, but it is under the supervision of the state of California, which does not require the kind of public filing that federal bankruptcy court does.
The equity holders who supported the last firm all lost their investments, but some are returning to put money behind the new company. The Post reports that all of the SpinMedia properties, including Vibe Media, have lost all of their equity as well due to the new shift in company aims.
Former Vibe Media executive and SpinMedia LLC CEO Dale Strang predicts the company will turn a profit in 2014.