Gawker announced today that it has filed for Chapter 11 protection from creditors in order to safeguard its assets and keep publishing while it appeals the $130 million Hulk Hogan verdict. Gawker also said that it has an agreement with Ziff Davis to sell all 7 of it's brands including presumably Gawker.com. Recode is reporting that Gawker has told its employees the price is somewhat less than $100 million. The Wall Street Journal added, "The sale auction will begin with an opening bid of $90 million from the digital media company and publisher Ziff Davis LLC, according to a person familiar with the matter." The Gawker network reportedly has 6 million readers each weekday.
In a memo to staff, Ziff Davis chief executive Vivek Shah said the auction will likely take place at the end of July and that he expected the bankruptcy court to set a schedule to take other bids soon. “There’s a tremendous fit between the two organizations, from brands to audience to monetization. We look forward to the possibility of adding these great brands—and the talented people who support them—to the Ziff Davis family,” he said. (WSJ.com)
Gawker founder and CEO Nick Denton tweeted about the bankruptcy filing and took a direct stab at Peter Thiel who funded Hogan's legal team:
Even with his billions, Thiel will not silence our writers. Our sites will thrive — under new ownership — and we'll win in court.
— Nick Denton (@nicknotned) June 10, 2016
— Felix Salmon (@felixsalmon) June 10, 2016
Gawker founder and CEO Nick Denton commented in the release, "We are encouraged by the agreement with Ziff Davis, one of the most rigorously managed and profitable companies in digital media. A combination would marry Ziff Davis’ strength in e-commerce, licensing and video with GMG’s premium media brands."
Bankruptcy is necessary in order for Gawker to sell the business free and clear of legal liabilities at its maximum value:
Gawker Media Group is putting its properties up for sale after a coordinated barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage.
The protection afforded by the bankruptcy filing will allow GMG to exercise its rights to due process. The company is confident it will ultimately prevail in the Hogan lawsuit, but was not able today to obtain from the trial court even a brief stay without onerous conditions to seek relief from the appeals court.
The Wall Street Journal added that, "Gawker will sell its business at a bankruptcy court-supervised auction. It has arranged a $22 million bankruptcy loan to stay open pending the sale. The company listed Mr. Bollea as its largest creditor with a $130 million claim. (He was also awarded an additional $10 million in damages from Mr. Denton himself.)"
Gawker's release went on to recap its accomplishments over the years:
With a distinctive commitment to journalism as an honest conversation between writers and readers, GMG is the only interactive media group to have achieved scale and profitability without outside capital. The company is a leader in online commerce, native advertising and online discussion software, but the driving force is its distinctive editorial mission.
Writer for writer, GMG has broken more important and interesting stories than any other digital news venture.
Gizmodo, the company’s technology flagship, has energized the debate about Facebook’s control of the news, for example. Deadspin, which provides sports news without access, has exposed the cover-up by the NFL of domestic abuse allegations against players. Lifehacker is the smartest how-to site on the web. Jezebel has defined modern feminist thinking. Jalopnik and Kotaku are among the web’s leading sources for news and reviews of cars and video games. And the flagship site itself has shone light on powerful figures from Donald Trump and Hillary Clinton to the new industrialists and investors of Silicon Valley.
"Authentic writing, whether it takes the form of honest reviews of technology, video games and entertainment, or revelations about the way the system works, is more important than ever," says Nick Denton, the founder of GMG. "We have been forced by this litigation to give up our longstanding independence, but our writers remain committed to telling the true stories that underpin credibility with our millions of readers. With stronger backing and disentangled from litigation, they can perform their vital work on more platforms and in different forms."