The fight is on now that Gawker Media has filed for Chapter 11 protection in New York, and the litigious fisticuffs between tag team Hulk Hogan and Peter Theil vs. Gawker promises to be a long and controversial one.
As predicted, Hulk Hogan’s $140 million judgement against Gawker for invasion of privacy caused irreparable harm, and the online tabloid is gearing up for the long haul by filing for Chapter 11 bankruptcy and putting the business up for auction as reported by NBC. Desperate times call for desperate measures, especially since Hogan isn’t done with Gawker; he filed another lawsuit over the leaked transcript of him repeatedly using the “N-word” in reference to a man his daughter Brooke was allegedly seeing, during one of his “sessions” with Heather Clem.
The disagreement over whether Gawker was reckless and ruthless when it published Hulk Hogan having sex with “Bubba “The Love Sponge” Clem’s wife was decided three months ago. Gawker felt it was a newsworthy piece about a public figure and Hogan saw it as an invasion of privacy; the jury agreed with “The Hulkster” to the tune of $115 million in compensatory damages and $25.1 million in punitive damages.
After the Chapter 11 filing, Nick Denton announced that media company Ziff Davis has agreed to purchase Gawker‘s assets that cover seven media brands that include Gawker, Jezebel, Deadspin, and Gizmodo, but that deal has to go through a court-supervised auction that may include other bidders. According to bankruptcy court filings, Gawker has assets of between $50 million to $100 million and liabilities of $100 million to $500 million.
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
Gawker isn’t bowing down; in fact, it’s the opposite. While the gossip and news blog has had to give up its independence, it has secured stronger financial backing and its journalists are free to do what they do best but on more platforms. In other words, it’s business as usual, Chapter 11 or not.
“The sale and filing are intended to preserve the value of GMG’s pioneering digital news business, safeguard the jobs of journalists and other staff, and allow GMG to fund the appeal against the $130 million judgment in the Hulk Hogan case. 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.”
It also allows Denton the funding to go after Hogan’s benefactor, PayPal founder Peter Thiel, reports CBS News.
“The lawyers are exploring whether this could be a case of tortious interference, racketeering or other potential claims.
Thiel admitted last month that he financed Hulk Hogan, aka Terry Bollea, in what he called a “deterrent” to Gawker‘s no-holds-barred and sometimes gonzo style of journalism. Many believe this is a promise coming to fruition.
Gawker made an enemy out of Thiel early on for calling him “the Silicon Valley equivalent of Al Qaeda” two years prior to outing him as a homosexual. Denton turned the knife by posting a comment in the “outing” piece about how Denton threatened him with destruction. It appears Thiel has kept his promise by not just funding Hulk Hogan’s case against Gawker, but others as well to the tune of $10 million.
Nick Denton suspected that Hogan’s case was being privately funded, but was thrown off after the “negligent infliction of emotional distress” charge was dropped from the suit, according to The Verge. That brilliant, strategic move prevented Gawker from using insurance payouts to cover damages which forced them to pay their own bills. At the time, that move didn’t make sense because it reduced the number of entities Hogan could sue, plus he turned down several settlement offers, unusual in a contingency-based case.
Gawker and other media outlets are worried about people like Thiel who take a personal interest in funding plaintiffs who couldn’t otherwise afford to fight a mutually despised entity. Thiel’s $500,000 early investment in Facebook made him $750 million of the $2.7 billion he is currently worth. The Silicon Valley venture capitalist co-founded Paypal and is a Trump supporter, which Gawker has written incessantly about.
Media analyst Dean Starkman says this is an “ominous development” for journalism.
“You don’t want billionaires to be any final arbiter of press fairness – that’s just not democracy.” While many of us disagreed with Gawker’s news judgment in this case, and many are ambivalent about Gawker itself, the issue here was a billionaire’s use and potential abuse of the legal process to drain a journalism outlet’s resources.”
Many are applauding the downfall of Gawker. #JailDenton memes are showing up all over social media and they are so vicious and nasty that it highlights just how polarizing the Gawker situation is.
— Thought Krimes (@Thought_Krimes) June 11, 2016
— William Grant (@basedbill) June 11, 2016
This is quite the love fest between Gawker and Hulk Hogan and Peter Thiel. The Chapter 11 filing seems to have given Nick Denton some fire, and the long and expensive fight brewing will keep the conversation alive regarding freedom of the press and the right to privacy.
[Photo by Steve Nesius & Ben Margot/AP Images]