Gawker Media mulls sale, hires bankers in wake of Hulk Hogan lawsuit and Peter Thiel revelations
News site hired bankers amid news that Silicon Valley billionaire was funding Hogan lawsuit
Gawker Media has hired bankers and is reportedly considering selling itself after losing a high-profile defamation lawsuit from wrestler Hulk Hogan and his well-financed legal backers.
A day after Silicon Valley billionaire Peter Thiel acknowledged he was one of the financial backers of Hogan's lawsuit against the gossip and news website, Gawker management acknowledged Thursday that the company has hired advisers. But the company insists that there's nothing to suggest that any sort of sale or deal is imminent.
"Everyone take a breath," Gawker said in a statement. "We've had bankers engaged for quite some time given the need for contingency planning around Facebook board member Peter Thiel's revenge campaign."
"We recently engaged Mark Patricof to advise us and that seems to have stirred up some excitement, when the fact is that nothing is new."
Patricof, a media banker with Houlihan Lokey, was recently hired by Gawker founder NIck Denton to advise the company on its finances. Earlier this year, Denton sold a minority stake in the company he founded to technology firm Columbus Nova Technology Partners for an undisclosed sum, a transaction that happened while the Hogan trial was underway.
A need to fight back against Hogan and his then mysterious backers was a major factor in "how the Columbus Nova investment was arranged," Denton said Thursday.
Hogan, whose real name is Terry Bollea, was recently awarded $140 million US in damages after Gawker posted a video of him having sex with his former best friend's wife. Hogan contended the 2012 post violated his privacy.
Gawker is currently trying to appeal that ruling.
It emerged during the trial that Gawker properties, which include Jezebel, Deadspin, Gizmodo and other digital news sites, took in almost $50 million US in revenue last year.
The damages in the lawsuit cannot be paid through insurance and must be paid via other means, which may have prompted the behind the scenes financial moves.
Gawker is currently facing multiple lawsuits from people who have been the target of the site's salacious reportage. Last year, Gawker landed in hot water for drumming up a sex scandal involving an executive at publisher Condé Nast and the brother of a former member of Barack Obama's cabinet. Gawker has since apologized and retracted that story.
This week, it emerged that the Silicon Valley investor Thiel, who cofounded PayPal and sits on the board of Facebook, had contributed $10 million to assist Bollea and others seeking legal recourse against Gawker, which had outed him as gay in 2007.
"Without going into all the details, we would get in touch with the plaintiffs who otherwise would have accepted a pittance for a settlement, and they were obviously quite happy to have this sort of support," Thiel told the New York Times on Wednesday.
Thiel's move has raised troubling questions about freedom of the press, since it is a high-profile example of a plutocrat using his vast wealth to try to drive a media company out of business, simply because he doesn't like them. But Thiel insisted that wasn't the case, likening the money he spent helping fight Gawker to "philanthropy."
"It's not for me to decide what happens to Gawker," Thiel told the Times. "If America rallies around Gawker and decides we want more people to be outed and more sex tapes to be posted without consent, then they will find a way to save Gawker, and I can't stop it."