Gawker Media has remained optimistic that it was simply exercising its constitutional rights when it published a hidden video of Hulk Hogan having sex in 2012. But a Florida judge's decision to uphold $140 million in damages for violating the wrestler's privacy, has sent Gawker Media founder Nick Denton hunting for financial help.
According to The Wall Street Journal and New York Post, Denton is exploring a potential sale of the gossip website. He has hired a Houlihan Lokey investment banker to advise him and at least one party has reportedly "expressed interest" in a deal valued between $50 and $70 million. However, it's unlikely Denton can sell to this un-named potential buyer.
Any deal between $50 and $70 million would undercut the value of the media company. At trial, the jury was told Gawker Media's value is $83 million. It was also told the company generated $48.7 million in revenue last year. The company's sites include Deadspin, Jezebel, and its namesake publication.
Gawker Media's corporate charter may also make it hard for Denton to sell to this interested party. To raise funds for the Hogan lawsuit, Denton sold a minority stake in Gawker to Columbus Nova Technology Partners, an outside venture capital firm owned by Russian billionaire Viktor Vekselberg, in January. According to the revised charter, Columbus Nova has the power to veto any sale of the company for an amount less than $100 million.
Columbus Nova may not let Denton sell Gawker for as low as $50 million; that is, unless, the unnamed party is actually the venture capital firm. Perhaps Vekselberg wants to take up the business of blogging.
The funds from a sale could help fund Gawker's appeal to Florida's Second District Court of Appeals, a move the company is confident will help vindicate it. In a conversation with Capital News, Gawker said its optimism is even higher now that Peter Thiel, a Facebook board member and Silicon Valley billionaire, has been funding a legal campaign against its journalists. It hopes to raise the question in court about whether Hogan financially benefited from bringing the lawsuit.
Gawker isn't just bringing the public the news… now it's making it.