This Monday, Gawker Media Chief Executive and founder Nick Denton, filed for personal bankruptcy protection, forcing a sale of the controversial digital media.
Gawker Media faces a $140 million penalty for publishing a Hulk Hogan’s sex tape on-line. The professional wrestler sued the company, the owner and the editor for the invasion of privacy, and the court favored Mr. Hogan. Denton says he doesn’t have the money, and that all his net worth is invested in the company.
An auction for the company is expected to occur later this month. The tech publisher Ziff opened with a bid of $90 million this summer. Before the trial, the company was valued at $200 million, and the auction is scheduled to end on August 18.
According to the banker who is advising Gawker through the sale process, Mark Patricof, more than a dozen of parties are interested at this point.
When the deal concludes, the board of directors will have to wait for the court’s ruling on Hulk Hogan’s case before putting their hands on the money. However, Nick Denton protected his personal assets by filing for bankruptcy which means Hogan probably won’t see a penny from the lawsuit.
— AP Entertainment (@APEntertainment) August 1, 2016
Peter Thiel secretly funded Hogan’s lawsuit against Gawker Media
Gawker Media is appealing the judgment made by a jury that awarded Terry Bollea, better known as Hulk Hogan, $115 million in damages and $25 million more in punitive damages.
Denton is one of the defendants in Hulk Hogan’s lawsuit against Gawker. In May, it surfaced that Mr. Bollea’s lawsuit is secretly financed by Silicon Valley billionaire Peter Thiel who said he was funding other legal cases against the company. Thiel is an early backer and board member of Facebook and co-founder of PayPal who was angry over Gawker’s posts about him and his friends in Silicon Valley and declaring him gay almost ten years ago.
Denton said earlier this Monday that he does not have the money and almost all of his net cost is in the independent media business.
Gawker Media posted a sex tape that shows Hulk Hogan having sex with his then best friend’s wife
In 2012 Mr. Bollea sued Gawker Media, Nick Denton and Albert Daulerio, the former editor in chief of Gawker.com over the publication of a sex tape in the website involving Mr. Bollea and a woman who was the wife of his then-best friend, the radio shock jock Bubba the Love Sponge Clem. Mr. Daulerio is expected to file for bankruptcy as he was also ordered to pay $100,000.
Mr. Denton bankruptcy filing is not something that came as a surprise and is also not the first blow to Gawker, which he founded in 2002. The departure of two top editors last year after an article published, and later removed, about a married male media executive who was seeking to hire a gay escort.
— Squawk Box (@SquawkCNBC) August 2, 2016
Since Gawker Media filed for bankruptcy protection in June, the company has continued to operate as usual. According to Quantcast, the traffic on the website has increased since the filing, from 92 million of visits global monthly in April, to 104 million in July.
Mr. Denton said his personal bankruptcy would not affect that much his company. He believes Gawker will endure.
“For the company, this does not mean too much,” he said. “I am committed to finding the brands and the people a secure home, free of this vendetta. The bids are due in two weeks, and the operation is in great shape, with growing traffic and revenue.”
Denton has spoken with associates about the possibility of buying back the Gawker franchise from whoever takes ownership of the company’s websites.