For over a decade, Nick Denton's Gawker Media satisfied the public's thirst for drama. His media empire illuminated the dark, embarrassing, and disturbing corners of celebrities lives. It pushed public figures out of the closet and dropped dick pics on millions of viewers. It thrived on a mission of unapologetic, extreme openness.
But Denton's truth telling may have come to a brutal end. The media mogul who flew to the top of the blogosphere, has crashed back to earth thanks to Hulk Hogan.
An Oxford-Educated Journalist Becomes a Gossip Blogger
In 1998, the Financial Times sent a British journalist to San Francisco. The Oxford-educated graduate was supposed to cover the Internet revolution. But he quickly quit his job and joined the revolution, instead. He co-founded two sites and sold one of them two years later for $50 million. Denton was a natural Internet entrepreneur.
In 2002, Denton launched Gawker in his Manhattan apartment. The site took aim at celebrities and the New York media with a catchy, "snarky" tone. By May 2003, Denton reported on Gawker that his site was receiving more than 20,000 visitors per day and 500,000 page views per month. That's nothing.
Today, Gawker.com alone gets millions of views a month. It is only one of the eight successful sites that make up Gawker Media. The company's headquarters on Fifth Avenue house the almost 300 employees who crank out stories for Gawker.com, the sports blog Deadspin, the tech blog Gizmodo, and feminist site Jezebel.
These views translate to millions of dollars for Denton. At his peak, Celebrity Net Worth estimated Denton was worth $120 million, thanks to his stake in Gawker and various other investments.
Gawker Knocks Celebrities Off Their Pedestals
"People like a little bit of a soap opera in their media," Denton once said and the media empire he created definitely gave people what they wanted. It detailed the drama in Hollywood, New York, Washington, DC. It kept billionaires, movie stars, and state leaders real. But Gawker tried to be more than just a gossip blog.
Denton wanted Gawker Media to transcend the world of traditional tabloids and blogs by publishing stories that were not only interesting, but also true and original. Gawker's scoops included the Tom Cruise Scientology indoctrination video and news of Hillary Clinton's use of private emails. Of course, there were plenty of sex and drugs scoops too: Josh Duggar's Ashley Madison account and former conservative mayor of Toronto, Rob Ford, smoking crack.
"Nick's intention was always to do what British newspapers had done forever, which was to not hold back on going after important stories, no matter who they involved," Gaby Darbyshire, Gawker's former chief operating officer, who worked alongside Denton for a decade, told the Independent: "When we started Gawker in the States, that tone and willingness to shine a bright light on dark corners didn't really exist."
But maybe the United States wasn't ready to see all the dark corners Gawker wanted to illuminate.
Hulk Hogan Knocks Gawker and Denton Out
In 2006, Hulk Hogan slept with Health Clem, his best friend's wife. Unbeknownst to the wrestler, his best friend secretly hid a camera and microphone in the room to film the encounter. That video got leaked and was posted on Gawker.com in 2012, despite pleas from Hogan's legal team that the footage was taken without his permission.
With the financial help of tech billionaire Peter Thiel, whom Gawker "outed" in 2007, Hulk Hogan sued.
Gawker's argument that the video was protected under the First Amendment didn't fly with the Florida jury. A clip that attracted five million views ended up costing Gawker $140 million in damages. Denton was held liable for at least $10 million of the judgment and could be personally liable for whatever Gawker Media can't afford. In May, a Florida judge upheld the judgement.
The Demise of Gawker
Although Denton sold a minority seat in Gawker Media to a Russian billionaire so he could afford the legal battle with Hogan earlier this year, the company still doesn't have the funds to pay the judgment or the $50 million bond. Gawker has between 200 and 1,000 creditors, $100 – $500 million in liabilities, and only $100 million in assets.
Last Friday, Gawker Media filed for Chapter 11 bankruptcy. Ziff Davis, a digital media company of Hollywood-based j2 Global Inc., agreed to buy the company, including all of the sites, for $100 million. The sale won't be final until the bankruptcy court-supervised auction scheduled for the end of July. But Denton has given the bid his blessing.
"We are encouraged by the agreement with Ziff Davis, one of the most rigorously managed and profitable companies in digital media," Denton said in a statement. "A combination would marry Ziff Davis' strength in e-commerce, licensing and video with GMG's premium media brands."
While the bankruptcy filing protects the media company's assets from falling into Hogan's (or Thiel's) hands, it's also a significant blow to a company that prided itself on being independent from traditional journalism. Even if Gawker's appeal of the Florida court's decision is successful, it's unlikely the company will be the same under Ziff Davis' control.
The Demise of Denton
Just as Gawker's success giveth the millions, Gawker's demise taketh the millions away. The fallout from the Hogan suit has financially crippled the Internet entrepreneur. In May, Denton put his trendy SoHo condo up for rent for $15,000 a month. (No sign of potential tenants.) Celebrity Net Worth has downgraded his net worth from $120 million to $10 million – and even that may be generous.
There is some conjecture that the bankruptcy filing could work in Denton's favor. The $140 million judgment could be reduced by the New York judge who's handling the company's assets and debts now, making it easier for Denton to pay off Hogan and recover financially. (For Gawker's sake, let's hope the site hasn't published anything about any of the judge's friends.)
There are also rumors that Denton is considering a suit against Thiel for "tortious interfering, racketeering, and other potential claims." Of course, for a suit you need funds. Perhaps Peirre Omidyar, a media mogul with a vendetta against Thiel, would be Denton's benefactor. But the billionaire's involvement may be tricky when you're denouncing billionaire involvement.
Will Denton be able to pull himself from the rubble and rise to his SoHo condo again? Will his aggressively open style of journalism find protection in a country where public figures maintain privacy rights? Will you still want to open Gawker.com when your boss isn't looking?