Gawker Filing for Bankruptcy, Seeking New Owner
Gawker founder Nick Denton with Huffington Post co-founder Arianna Huffington. (Financial Times / CC BY 2.0)
Gawker Media, a news company that famously relies on gossip for headlines, is reportedly going bankrupt. This news comes after the company lost a lawsuit to wrestler Hulk Hogan—whose real name is Terry Bollea—earlier this year and was ordered to pay him $140 million in damages.
Media coverage of the lawsuit ramped up when it was revealed that Silicon Valley mogul Peter Thiel funded this lawsuit and many others against the company.
But Gawker Media and its CEO, Nick Denton, may not have to pay up—and the company may have already found a new owner.
Recode reports that the company filed for Chapter 11 bankruptcy, and “[p]ublisher Ziff Davis has entered a binding offer to buy the company for around $100 million, but may have to end up paying more.” Recode posted Ziff Davis CEO Vivek Shah’s memo to his employees:
In the event we become the acquirer, the additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming. With the addition of Jalopnik, Deadspin and Jezebel, we would broaden our position as a lifestyle publisher. Much like us, GMG is heavily active in driving commerce-based revenues and has an impressive publishing and commerce platform with Kinja.
As you can see, 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.
According to The New York Times, “Such an offer is known as a stalking-horse bid, meant to set a floor in a court-supervised auction.” It goes on to explain how filing for bankruptcy affects Gawker:
Filing for Chapter 11 stays claims from creditors, including court judgments — meaning Gawker would not need to begin paying Hogan, whose name is Terry G. Bollea. It also allows companies more time and more control as they reorganize themselves.
Bollea sued Gawker after the site published a “101-second excerpt of a sex tape depicting himself and his friend’s wife.” Bollea argued that this was an invasion of privacy and caused emotional damage. Forbes magazine later revealed that Thiel was a lead bankroller in Bollea’s case. Forbes writes:
Money may not have been the main motivation in the first place. Thiel, who is gay, has made no secret of his distaste for Gawker, which attempted to out him in late 2007 before he was open about his sexuality. In 2009, Thiel told PEHub that now-defunct Silicon Valley-focused publication Valleywag, which was owned by Gawker, had the “psychology of a terrorist.”
“Valleywag is the Silicon Valley equivalent of Al Qaeda,” Thiel said at the time.
Although it has filed for bankruptcy, Gawker reportedly still plans to appeal the $140 million decision.
—Posted by Emma Niles
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Source: http://www.truthdig.com/eartotheground/item/gawker_filing_for_bankruptcy_seeking_new_owner_20160611/
