Gawker Media filed for bankruptcy and put itself up for sale after losing a $140 million invasion-of-privacy suit brought by former professional wrestler Hulk Hogan and funded by tech billionaire Peter Thiel.
The bankruptcy would shield New York-based Gawker from paying the potentially crippling damages awarded by a Florida jury while the company seeks a buyer. The digital media company also asked the court to shield founder and chief executive officer Nick Denton from the Hogan suit and other litigation. It listed a $130 million claim from the Hogan case as “disputed” in its Chapter 11 petition, filed Friday in Manhattan.
Gawker said in a statement that Ziff Davis has agreed to purchase its assets if no better offers emerge in a court-supervised auction. Ziff Davis agreed to pay around $100 million, according to a person familiar with the matter, who asked not to be identified because the pricing isn’t public.
“Gawker Media Group is putting its properties up for sale after a coordinated barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage,” the company said in the statement, adding that it failed to persuade the Florida court to stay the litigation while Gawker challenges the verdict.
The bankruptcy and sale “are intended to preserve the value” of Gawker and fund its appeal of the Hogan verdict, according to the statement. Bankruptcy would allow the assets to be sold “free and clear” of legal liabilities, the company said.
Hogan, whose real name is Terry Bollea, sued the media- and celebrity-focused website in 2012 over the publication of a tape showing him having sex with a friend’s wife, claiming the publication cost him endorsements and inflicted emotional harm. Thiel, the libertarian-leaning venture capitalist who co-founded PayPal and sits on the board of Facebook Inc., made a financial contribution to the suit.
Gawker and Thiel have a contentious history: The website outed him as gay in 2007. Thiel has since publicly acknowledged that he’s gay, and called Gawker’s now-defunct blog Valleywag the “Silicon Valley equivalent of al-Qaeda.” The dispute has evolved into a clash of tech titans, as First Look Media, a news organization founded by Silicon Valley billionaire Pierre Omidyar, has said it will support Gawker.
In an internal memo to employees, Ziff Davis CEO Vivek Shah said acquiring the Gawker websites Gizmodo, Lifehacker and Kotaku “would fortify our position in consumer tech and gaming.” Shah’s memo didn’t mention the Gawker.com flagship site.
Ziff Davis is focused on the brands in the tech, gaming and lifestyle categories, which contribute the vast majority of Gawker Media’s revenue, according to the person familiar with the matter.
“We have been forced by this litigation to give up our longstanding independence, but our writers remain committed to telling the true stories that underpin credibility with our millions of readers,” Denton said in the company statement.