In the end, the vengeful billionaire got his wish.
Gawker Media said Thursday it will close its always brash and sometimes lacerating news and gossip site, Gawker.com, next week, in a capitulation to legal troubles secretly engineered by a business tycoon who bore a long-standing grudge against it.
Gawker was ostensibly brought low by an invasion-of-privacy lawsuit by former pro wrestler Hulk Hogan over a sex tape of Hogan that Gawker posted in 2012. But the $140 million judgment that Hogan won in March was merely the explosive edge of the legal war against the site and its parent company that was quietly funded by Silicon Valley investor Peter Thiel, the co-founder of PayPal.
Gawker.com, which attracted millions of readers with its insider gossip, scoops, speculation and a snarky writing style that became the default voice of the Internet, ran afoul of Thiel on several occasions, most notably in 2007 when it outed him as gay. He subsequently paid for the payback, covering millions in legal fees for Hogan and a series of other plaintiffs whose suits are pending.
The site confirmed Thursday that it was closing 14 years after Nick Denton, a veteran British journalist, founded it in New York and two days after Univision won a bankruptcy auction for its parent company, Gawker Media. Also Thursday, a bankruptcy court cleared Univision’s takeover of the company, which will include its six remaining sites — Deadspin (sports), Lifehacker (personal productivity), Jezebel (women), Gizmodo (technology), Kotaku (games) and Jalopnik (cars).
Gawker.com, the crown jewel of Denton’s former empire, will go back into Gawker Media’s bankruptcy estate, its value effectively zero, said Jude Gorman, general counsel of Reorg Research, a financial data company. “I think the Gawker brand was pretty much tainted” by the legal battle, he said. “Univision decided to wash its hands of it and start anew.”
Despite their decapitation of Gawker and Denton, Hogan and Thiel have yet to see any money from Hogan’s suit; the judgment remains on appeal. However, if he ultimately prevails, Hogan (real name: Terry Bollea) will probably collect only a fraction of what a jury awarded him earlier this year. His claim on Gawker Media’s assets — which now consist almost entirely of Univision’s $135 million purchase price — is secondary to the company’s secured creditors, who are owed about $40 million, Gorman said. Other unsecured creditors will divide what’s left over.
But the damage has already been done. In a statement Thursday, Denton said Gawker.com’s legal troubles effectively made it toxic for a buyer.
“We have not been able to find a single media company or investor willing also to take on Gawker.com,” he said. “The campaign being mounted against its editorial ethos and former writers has made it too risky. I can understand the caution.”
He added: “Even if the appeals court overturns this spring’s Florida jury verdict, Peter Thiel has already achieved many of his objectives.”
Denton, who has a $10 million judgment pending against him from the Hogan suit, has filed personal bankruptcy. He won’t be joining Univision, and said he will move on to other unspecified projects. In any case, he said, he’ll be “out of the news and gossip business.”
Although its reporting on Thiel and Hogan was controversial, and a story last summer outing a New York magazine executive drew widespread criticism, Gawker and its related sites produced some major scoops. Among others, Gawker broke stories about Toronto Mayor Rob Ford’s cocaine habit and about Hillary Clinton’s use of a private email server. Deadspin broke the bizarre story of Notre Dame linebacker Manti Te’o’s phantom girlfriend.
Denton offered praise for the company he started, writing that it had “introduced a new style of journalism, sometimes enthusiastic, sometimes snarky, but always authentic. We connect with a skeptical and media-savvy generation by giving them the real story, the version that journalists used to keep to themselves.”
He said Monday’s posts will be Gawker.com’s last before it is “mothballed” in the bankruptcy estate.
Gawker has said it will reassign its employees to its other operations.