Gawker Media LLC, the online publisher ordered by a USA court to pay $140 million to former wrestler Hulk Hogan over the publication of a sex tape, filed for Chapter 11 bankruptcy protection on Friday and is planning to put itself up for sale.
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“Gawker Media Group (‘GMG’) has entered into an asset purchase agreement to sell its seven media brands and other assets to Ziff Davis, a global digital media company which operates in the technology, gaming and lifestyle categories and is a subsidiary of j2 Global, Inc”. Gawker will continue operations throughout the court-supervised auction process. The exact amount Gawker owes to secured creditors, like banks and investment firms, law firms and others is unknown but could be anywhere from $100 million to $500 million, according to sources.
Gawker and Thiel have a contentious history: The website outed him as gay in 2007.
It’s tough luck for Nick Denton and the other famously unscrupulous powers that be at Gawker, but as the esteemed Hulkster himself so memorably opined, “Whatcha gonna do, brother?”
Hogan sued Gawker for violating his privacy by publishing portions of a sex tape in 2012 in which Hogan was having relations with the wife of one his friends.
The legal costs for the former wrestler are being bankrolled by billionaire Peter Thiel, who co-founded PayPal. In a memo obtained by Recode, CEO Vivek Shah described the agreement as a “tremendous fit between the two organizations”.
Following that controversy, Gawker executives said Gawker.com would rebrand as a site focused on political coverage.
A week ago, Denton was optimistic about the company’s prospects, saying he was “pretty confident” a higher court would rule in its favor or reduce the verdict on appeal.
If you’ve read websites like Gizmodo, Jezebel, Deadspin, Jalopnik, Kotaku, or Lifehacker, you may or may not know that these websites are actually under the control of a parent company called Gawker Media.
Ziff Davis wants to buy Gawker Media’s blogs but not assume its liabilities, reports USA Today.
In an open response letter, Denton called Thiel’s financial backing of the lawsuits “twisted”, and anxious that it could be disastrous for media companies in the future.
The bankruptcy and sale “are meant to preserve the value” of Gawker and fund its appeal of the Hogan verdict, according to the statement.
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Gawker Media has not commented on the filing. Gawker is reportedly bankrupt after losing a lawsuit against WWE superstar Hulk Hogan. He added that funding Hogan’s lawsuit was one of his “greater philanthropic” activities ever.
