The nincompoop got what he wanted… Gawker has walked into the courtroom and asked for a big fat stack of Chapter 11 paperwork…
I recently wrote about Peter Thiel’s funding of lawsuits against the publication Gawker… I called him a nincompoop.
I called him a nincompoop because instead of offering a counter-narrative to Gawker’s sensationalism, instead of trying to convince others to not visit / support such an unscrupulous website, he instead decided to use his power and financial resources to abuse the court system into getting what he wanted… Gawker gone, dead, ended.
Well, the news is he’s gotten what he wanted… at least in a sense. Gawker has filed for Chapter 11 with plans to be bought by an independent company and comeback in a new form.
No matter what you think of Gawker, this is unfortunate news. The company has officially filed for Chapter 11 bankruptcy and begun the process of auctioning off its assets. Chapter 11 is an attempt to restructure debts (which include — mostly — the ~$130 million owed to Hulk Hogan after venture capitalist Peter Thiel funded Hogan’s questionable lawsuit against Gawker).
Yeah, that’s the beginning of the list of their 20 largest creditors and it starts with Hogan’s “disputed” $130 million… and second place is some lawyers for $115k. So we’re talking a pretty big difference from the number 1 creditor to the number 2 creditor. Of course, as with many Chapter 11 bankruptcy filings, this is more about process than substance. The filing potentially lets Gawker stop the process on some other things and explore the various alternatives, including a fairly likely sale to another player. It doesn’t mean that the company is shutting down. Update: Apparently the plan is for Ziff Davis to buy Gawker, though others could potentially get into the bidding.
What’s interesting, is Gawker is getting a ton of free advertising from this whole affair.
So whomever ends up purchasing the Gawker name, website, and probably hires the sames writers is going to get a nice boost in traffic and ad dollars. Peter Thiel may very well have just created a new, stronger, Gawker.
And as I mentioned previously, people are going to pay even more attention to Gawker now because of a sense of moral outrage… Not only from the general media (which seems affronted by the thought of a news company being killed by a lawsuit) but by the end users as well.
So free advertising and people more interested in supporting you because somebody is behaving like a nincompoop? Yeah, Gawker has serious potential now.
Peter Thiel, contrary to his stated intent, may very well have ended up creating an even stronger and pervasive version of Gawker.
Peter Thiel won the battle, but may have lost the war…
Further Reading on the Peter Thiel Affair
Over at Overlawyered.com, Walter Olson has done a great job at the whole Gawker vs Peter Thiel…
Faced with a $140 million verdict from a Florida jury over its publication of a sex tape including wrestler Hulk Hogan, Gawker Media has filed for Chapter 11 bankruptcy [CNN Money] Forbes profiles a boutique law firm that with Thiel’s help has made suing Gawker its “bread and butter.” Nick Lemann notes that the “uniquely legally privileged position of the American press” dates back to the period of New York Times v. Sullivan and some other pro-press decisions, and may be up for rethinking in public opinion “at a moment when the press is far more vulnerable, economically and culturally, than it used to be.” [New Yorker] My recent posts on Gawker, Peter Thiel, and paying others to sue are here, here, and here.
Update – 06/13/2016
Over at TechDirt, Mike Masnick has a new article on Peter Thiel’s Gawker lawsuits…
Leaving aside, for now, the question of the Hogan lawsuit, it’s becoming abundantly clear that Thiel’s plan was to find any way possible to destroy Gawker through lawsuits. That link goes to a much more detailed report at Forbes (yes: warning that it hates people who use ad blockers), describing how Thiel’s efforts here more or less financed an entire law firm to focus on hunting down anything to attack Gawker over. The article reports that someone working for Thiel approached the lawyer Charles Harder while he was working for another law firm. Soon after, Harder left to launch his own firm — and his first client was Hogan and the first case against Gawker.
Update – 8/01/2016
So not only has Gawker the website filed for bankruptcy, now Nick Denton (the founder of Gawker) is in bankruptcy court too…
The Gawker Media founder sought bankruptcy court protection Monday in New York, after a Florida judge refused to halt enforcement of a $140 million damages award in pro wrestler Hogan’s invasion-of-privacy lawsuit.
Gawker itself filed for bankruptcy June 10, a move that temporarily put the brakes on Hogan’s efforts to collect on the verdict he won after the online media company posted excerpts of a sex-tape featuring him. Denton was also a defendant in the suit and liable for the damages award.
The Chapter 11 petition filed Monday in Manhattan federal court listed assets of $10 million to $50 million and liabilities of more than $100 million, including Hogan’s claim and other pending lawsuits. Those legal claims will have a lower repayment priority than secured loans and other debts backed by collateral, such as a home mortgage.
Denton also listed more mundane debts, including a $50,000 loan he took out from his Gawker 401(k) retirement fund, $18,671 in credit card bills and $120 for cable TV.
Peter Thiel has seemingly gotten exactly what he wanted.
Let’s just hope bankruptcy will allow a new life for both Gawker and Nick Denton.
Update – Gawker Sold to Univision (8/16/2016)
Univision Holdings Inc. made the winning $135 million bid to acquire Gawker Media, the online publisher driven into bankruptcy in June after losing an invasion-of-privacy lawsuit to Hulk Hogan, a person familiar with the matter said.
Univision beat out Ziff Davis, the only other participant in the auction, said the person, who asked not to be named because the bidding is private. Since Gawker selected Univision, Ziff Davis is entitled to a $2.47 million breakup fee, with expense reimbursement of as much as $1.25 million.
Gawker will complement Univision’s aggressive digital push. In January, the largest U.S. Spanish-language broadcaster made a minority investment in Onion Inc., owner of the satirical website The Onion. Univision has also acquired The Root, a digital magazine geared toward African Americans.
So I guess this is the beginning of the new Gawker…
I have no clue what Ziff Davis would’ve done with Gawker if they had actually bought it… It’s kind of hard to see Ziff Davis being able to support Gawker financially. Weird.
My bet is that while Univision will come in and say they want to keep things mostly as they are at Gawker (writing staff and general theme and such) in a few years time Gawker will end up something wildly different. But that’s speculation isn’t it.
Anyways, I wonder what Nick Denton (the founder of Gawker) will do with himself in the coming years…
Update – Never mind Univision Doesn’t Care (8/18/2016)
Univision is going to shutdown Gawker.com…
Univision Communications has no plans to operate Gawker.com after acquiring Gawker Media’s assets for $135 million, a source told FORBES on Thursday. According to the source, the Spanish-language media organization will operate sites like Jezebel and Deadspin, but will shutter Gawker’s namesake site.
You can read a little more here… Gawker is Dead.