Gawker Media, the notorious media company that thrived off celebrity scandals and controversies, has filed for bankruptcy on Friday. Gawker is reportedly bankrupt after losing a lawsuit against WWE superstar Hulk Hogan. Hogan was awarded $140 million in damages by a Florida jury for an invasion of privacy case involving the publication of Hogan’s sex tape by Gawker.
In a filing made in the U.S. bankruptcy court for the Southern District of New York, Gawker said that its assets are worth between $50 million to $100 million, while its liabilities are estimated to be between $100 million to $500 million. Gawker was founded in 2002 by British journalist and internet entrepreneur Nick Denton. The company filed for Chapter 11 bankruptcy on Friday, listing Hollywood Hulk Hogan (real name Terry Bollea) as its biggest creditor.
Hulk Hogan took legal action after a sex tape from 2007 involving him and former wrestler Heather Clem was published by Gawker. Heather is the wife of radio personality Todd Clem, who was good friends with Hogan. In March, following a two-week-long trial, a Florida jury sided with Hogan and ordered Gawker to pay $15 million more than the $100 million Hogan had demanded, in addition to another $25 million in punitive damages.
“Despite its long-running success and commendable growth trajectory, Gawker Media suffered this year from exorbitant legal expenses and the recent judgment.”
In declaring bankruptcy, Gawker also announced that the company had done an asset purchase agreement with digital media company Ziff Davis as part of the court-supervised auction. The deal also allows other bidders to submit competing offers to Gawker, which owns seven different media brands, including the likes of Jezebel and Gizmodo. Ziff Davis, which operates tech-centric media groups such as IGN, AskMen, and PCMag, has itself gone through the Chapter 11 process. It claims to reach over 100 million readers each month.
— Felix Salmon (@felixsalmon) June 10, 2016
Ziff Davis chief executive Vivek Shah announced to his staff that he expects the auction to take place sometime in July. He also declared that he was excited by the prospect of adding these new brands to Ziff Davis.
“There’s a tremendous fit between the two organizations, from brands to audience to monetization. We look forward to the possibility of adding these great brands—and the talented people who support them—to the Ziff Davis family.”
It was discovered last year that billionaire tech-entrepreneur Peter Thiel had been secretly bankrolling Hulk Hogan’s litigation to shut down the website. The involvement of the PayPal co-founder was a more than apparent act of retaliation against Gawker, which had revealed his homosexuality in 2007. Besides that, they have also published other posts critical of Thiel. And while some are arguing that Thiel had no reason to be angry at Gawker for revealing his homosexuality, the billionaire had his reasons, as well as the resources, for helping Hulk Hogan win the lawsuit against the company.
Regarding the lawsuit, Thiel spoke to the New York Times.
“It’s less about revenge and more about specific deterrence. I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest…I thought it was worth fighting back.”
In response, Nick Denton, the founder of Gawker, posted the following in his Twitter.
Even with his billions, Thiel will not silence our writers. Our sites will thrive — under new ownership — and we’ll win in court.
— Nick Denton (@nicknotned) June 10, 2016
[Photo by Steve Nesius/AP Images]