Gawker has lost the battle against a powerful wrestler and an entrepreneur who held an old grudge against them.
And that made its founder Nick Denton warn the world of the danger of “dark money” in litigation finance.
On Wednesday, in New York, a bankruptcy document revealed that Gawker and Hulk Hogan had reached a settlement where the former WWE wrestler will receive $31 million in cash plus a share of the proceeds from the sale of Gawker.
Hogan, whose real name is Terry Bollea, had filed a lawsuit against Gawker after the latter published a sex tape featuring the wrestler and the wife of his former friend.
The case was filed against Gawker, its owner Nick Denton and the editor A.J. Daulerio.
In March this year, a Florida jury announced a verdict awarding $140 million to Hogan. A smashed Gawker fought on but in June lost an appeal for a stay on the payments.
The company filed for bankruptcy in June. By August, Gawker and all its six sister publications were acquired by Univision – a US-based Spanish media giant.
The case did not just hog the headlines for the litigants but also for the involvement of billionaire PayPal co-founder Peter Thiel.
Gawker had rubbed him on the wrong side by outing him as a gay. An enraged Thiel found in Hogan the perfect opportunity to destroy Gawker – and he did. Thiel provided financial backing to Hogan to fight the case.
This is exactly what Nick Denton wrote in a poignant post on his blog under the title ‘A Hard Peace‘. In fact, the post began with a reference to Thiel’s backing of Hogan.
He wrote that he rues the fact that real stories will now be removed from the web.
Denton accepts his defeat at the hand of the “famously relentless” Valley billionaire and admits that Gawker capitulated because the litigation would have “cost too much, and hurt too many people”.
“For Thiel, an investor in Facebook and Palantir, the cost of this exercise is less than 1% of his net worth and a little additional notoriety. The other protagonists — including Hulk Hogan and A.J. Daulerio, the author of the Gawker story about him — had much more at stake,” he writes.
Denton backs his editor Daulerio and wishes him all the best but gives vent to his displeasure at the judgement in the following words:
“It’s a shame the Hogan trial took place without the motives of the plaintiff’s backer being known.”
He concludes with a warning on how some very influential and powerful people can use their wealth to silence truth from coming out.
“As for Peter Thiel himself, he is now for a wider group of people to contemplate,” Denton closes.