How does Vice Media's Investment Deal with Viacom and WPP Affect Its Indie Cred?

Known for its guerrilla journalism, Vice Media has linked up with corporate giants in an investment deal. Nicole LaPorte talks with Shane Smith about how the move affects his company’s indie cred.

How does an iconoclastic hipster-cum-guerrilla journalist celebrate the fact that he and his DIY media company have just signed a deal in the “high eight figures” with some of the biggest names in corporate media?

“Well, I’m in bed right now. So I’m taking the day off, is how I’m celebrating,” Shane Smith drawled into the telephone Tuesday, soon after it was announced that his Vice Media had formed an investment partnership with former Viacom CEO Tom Freston; Joe Ravitch, and Jeff Sine of media merchant bank The Raine Group; and advertising behemoth WPP’s Sir Martin Sorrell.

Oh, and Vice also has new representation: Hollywood superagent Ari Emanuel of William Morris Endeavor Entertainment.

“I’m just resting,” Smith, a shaggy-faced 40-year-old who favors Vans and canned beer, elaborated from his Tribeca loft. It was approximately two in the afternoon.

“It was a long, hard slog. So many companies, so many lawyers…,” Smith recalled.

The combustion of suits and slackers is an understandably exhausting one, particularly for an explosively unorthodox company like Vice, which was co-founded in 1994 by Smith and two like-minded skater punks—Gavin McInnis and Suroosh Alvi—and that has made its name on a way-left-of-center brand of gonzo journalism and Johnny Knoxville-style hijinks.

In what has now become lore among the in-the-know indie set, Smith once traveled to Liberia, where he interviewed a warlord named General Butt Naked. Over on Vice-owned, you’ll catch videos of scruffy-looking young men with carefully maintained facial hair and straw fedoras talking to Hezbollah drug dealers and U.N. troops. In one segment on a youth conference in Libya, a voiceover describes Col. Muammar Gaddafi as “a total nut bar” who is “protected by a joy division of super hot assassins.”

Vice may have had humble origins—more on that later—but it is now a full-fledged media empire that produces books, movies, music, TV programs, and websites. The company employs 750 people and has offices in 34 countries. With its new cash, it hopes to expand into territories like India, China, and Russia, producing more content in the vein of Wild Germany, a German TV show in which “German hosts do crazy shit around music and culture,” according to Smith, who said he expects earnings to reach $50 million over the next few years.

“All we care about is if we made a great magazine, a great video, if we had a great party. Nothing else matters.”

Last year, the company got its first real push toward mainstream legitimacy when partnered with Suddenly, Vice was being touted not as a geeky outsider, but as the latest Important New Media outlet—à la Twitter and WikiLeaks—to storm the gates of the O.M. (Old Media).

This latest deal gives it even more grownup cred. Indeed, it’s hard to imagine how the kids back in Brooklyn must be taking Smith’s new alliance, which he credits largely to Freston, a.k.a. Smith’s idol-BFF, whom he got to know when Vice partnered with MTV to produce The Vice Guide to Everything, which featured, among other things, reindeer racing.

“I’d been hanging out a lot with Tom Freston. About five years ago, we became friends, and then closer friends,” Smith said of Freston, who, though arguably one of the coolest suits in the industry, is still very much a suit.

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“We talked about a lot of problems I was having. And I asked him, ‘How is it to run Viacom?’ He said, ‘Well, they’re the same problems, just with more zeroes.’”

Freston then urged Smith to “just turn the jets on this” and helped put together Vice’s new “dream team.”

Smith never envisioned being a reporter. Instead, he wanted to write fiction. But after graduating with honors from Carleton University in Ottawa with a degree in political economy, he did more traveling (and partying) than writing. Eventually he wound up in Montreal, where he found himself working at the Voice of Montreal, a giveaway newspaper run by Haitians who wanted an English publication to cover ethnic events in the French province.

There he met Alvi, a McGill University grad with a degree in philosophy, and McIinnis, a fledgling cartoonist and graphic artist. Over rounds of beer at the Bifteck, a punk bar downtown, they plotted out their future, eventually buying out the owners of the Voice of Montreal slashing the “o” in “Voice” and revamping it as a ‘tudey lad mag with a penchant for gross-out spreads and barely clad women.

The trio soon relocated to New York—hipster epicenter Williamsburg, naturally—where Vice went through a series of highs and lows, getting money and then losing it, and then getting it again, ultimately emerging as a multimedia enterprise with a much more journalistic bent.

“As we started launching the magazine around the world, we saw all kinds of great stuff, and all kinds of bad stuff as well,” Smith said. “And we realized we did not want to just write about supermodels. We wanted to write about things that were a bit more meaty.”

(In 2008, McInnis left the company. The reigning triumvirate includes Smith, Alvi and creative director Eddy Moretti.)

Vice’s newish role as a legitimate news site has caused some debate among the old guard. Its swagger, meanwhile, has incited some blow-ups. In Andrew Rossi’s new documentary, Page One: A Year Inside The New York Times, which screened at this year’s Sundance, Times media reporter David Carr takes Smith on, after Smith brags that while Vice did an investigative piece on the lack of toilets in Liberia, the Times wrote a surfing piece about the embattled country.

“Just because you put on a fucking safari hat and looked at poop doesn’t give you the right” to attack the paper of record! Carr boomed.

“I love David, I think he’s great,” Smith said of Carr, explaining that the two had since made up. Smith even attended Carr’s Christmas party.

“Afterwards, I said to him, ‘Look, you’re a dog for The New York Times. I’m a dog for Vice, that’s it.”

But just how much of a dog can Smith keep on being, now that he has some of corporate America’s biggest names sitting at board meetings? More to the point, how will Vice be able to maintain its biggest, most valuable property: its authentic indie cred?

“We’ve been having that same question for 15 years,” Smith said. “‘Cool’ is, by definition, small. But what happens when you’re not small? We don’t really care if we’re cool, we just want to make the best content in the world. All we care about is if we made a great magazine, a great video, if we had a great party. Nothing else matters.”

This article has been amended from the original version.

Nicole LaPorte is a contributor to The Daily Beast and the author of The Men Who Would Be King: An Almost Epic Tale of Moguls, Movies, and a Company Called DreamWorks.