Univision, the most popular Spanish language TV network in the U.S., will take over Gawker Media for $135 million, outbidding digital publisher Ziff Davis at Gawker's bankruptcy auction on Tuesday, Aug. 16.
Gawker is reeling from a $140 million damages ruling against it, after wrestler Hulk Hogan took Gawker to court for publishing excerpts of his sex tape. The digital media company filed for Chapter 11 bankruptcy in June, forcing its founder Nick Denton to put the company and its seven web properties up for sale. Earlier this month, Denton also filed for personal bankruptcy.
Bidding For Gawker: Univision vs. Ziff Davis
Before the privacy lawsuit from Hulk Hogan erupted, Denton placed Gawker's value to be between $250 million and $300 million. Today, Gawker's assets are worth $50 million to $100 million, with its liabilities possibly reaching $500 million, based on the company's bankruptcy filing.
The sale is meant to keep Gawker employees "disentangled from the legal campaign against the company."
"I am pleased that our employees are protected and will continue their work under new ownership," says Denton.
The court-supervised auction culminated this week in Univision trumping Ziff Davis's $130 million offer by $5 million. The bidding began at $90 million, as pitched by Ziff Davis. The final offer from Univision is thus 50 percent higher than the initial bid.
Univision's takeover of Gawker solidifies the TV network''s youth-centric digital strategy, diversifying its portfolio of media assets across a range of demographics. The broadcasting company owns a minority stake in the satirical news website The Onion, which is popular among digital-savvy readers in the 25-34 age range.
In 2015, Univision purchased The Root, a site centered on African-American culture and, earlier this year, became fully in charge of the technology-focused TV channel and website Fusion, after buying out Walt Disney's shares.
"We could not have picked an acquirer more devoted to vibrant journalism," Denton notes.
Gawker vs. Peter Thiel
The sale will need approval from a federal bankruptcy court by Thursday, and Gawker may be required to pay senior creditors first before it can pay damages to Hulk Hogan, the Financial Times reported.
In May, billionaire venture capitalist and Facebook investor Peter Thiel admitted to bankrolling the privacy lawsuit lodged by Hulk Hogan. Thiel spent close to $10 million to pin down the news and gossip website, which also allegedly humiliated Thiel for his sexual orientation and failed business ventures.
"I can defend myself [but] most of the people they attack are not people in my category," Thiel believes.
Photo: Andrew Mager | Flickr