Gawker Media will settle the lawsuit that forced the company into bankruptcy, according to founder Nick Denton.
The settlement with Hulk Hogan is for $31 million, according to Ryan Mac of Forbes, citing court documents. The original judgment against Gawker was for $140 million.
Three stories, including the one about the sex tape featuring Hogan that sparked the invasion-of-privacy lawsuit, will be removed from the internet, Denton wrote in a blog post.
"As the most unpalatable part of the deal, three true stories — about Hulk Hogan, the claim by Shiva Ayyadurai that he invented email and the feud between the founders of Tinder — are being removed from the web," Denton wrote.
Denton said Gawker was confident an appeals court would have reduced or eliminated the judgment, but he said an "all-out legal war" with billionaire Peter Thiel, who funded Hogan's lawsuit, would have "cost too much, and hurt too many people."
The case
Hogan, whose real name is Terry Bollea, was awarded $140 million in damages in March stemming from a Gawker news article published in 2012 that included a clip of him having sex.
It was revealed in late May that Thiel, the Silicon Valley investor who cofounded PayPal, had secretly financed the lawsuit and others against Gawker Media to try to put the parent company of several news websites out of business.
"I saw Gawker pioneer a unique and incredibly damaging way of getting attention by bullying people even when there was no connection with the public interest," Thiel, whom Gawker publicly outed as gay in 2007, told The New York Times in May. In a speech on Monday, Thiel described Gawker as a "singular, sociopathic bully."
To protect its assets from being collected by Hogan, Gawker filed for Chapter 11 bankruptcy. Its assets were then sold to Univision in a government-ordered auction in August, which bought them for $135 million. Univision shut down operations of Gawker.com, the company's flagship site, but has continued to run its other properties, which consist of Gizmodo, Lifehacker, Deadspin, Jezebel, Kotaku, and Jalopnik.
The money Gawker got from the auction went into a fund to cover future legal costs and eventual damages, according to The Wall Street Journal. This settlement, if approved, "will allow staff equity holders to recoup the salary or bonus they gave up," Denton wrote.
Denton is among those who stand to gain financially from the settlement. In the Hogan judgment, Denton was personally liable for $10 million and jointly liable for a further $115 million, according to The Wall Street Journal. Like Gawker, Denton also filed Chapter 11 bankruptcy to protect his assets, including a 30% stake in Gawker and his condo, according to Fortune. In October, Denton listed his condo for $4.25 million.
The settlement will be discussed in bankruptcy court on Thursday, according to the New York Post. The entire proposed settlement is for $32.5 million, according to CNN's Tom Kludt. Hogan will get $31 million, Ayyadurai will get $750,000, and Ashley Terrill will get $500,000.
Read Denton's full blog post below:
After four years of litigation funded by a billionaire with a grudge going back even further, a settlement has been reached. The saga is over.
As the most unpalatable part of the deal, three true stories — about Hulk Hogan, the claim by Shiva Ayyadurai that he invented email and the feud between the founders of Tinder — are being removed from the web.
Yes, we were confident the appeals court would reduce or eliminate the runaway Florida judgment against Gawker, the writer of the Hogan story and myself personally. And we expected to prevail in those other two lawsuits by clients of Charles Harder, the lawyer backed by Peter Thiel.
But all-out legal war with Thiel would have cost too much, and hurt too many people, and there was no end in sight. The Valley billionaire, famously relentless, had committed publicly to support Hulk Hogan beyond the appeal and “until his final victory.” Gawker’s nemesis was not going away.
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. That motivated a settlement that allows us all to move on, and focus on activities more productive than endless litigation. Life is short, for most of us.
I will continue to work on topic forums, still convinced that the internet can bring people together in shared understanding rather than just triggering conflict between them. Hulk Hogan’s retirement will be comfortable.
Gizmodo, Lifehacker, Deadspin, Jezebel, Kotaku and Jalopnik — now under the ownership of Univision — can entertain and inform their readers with fewer distractions. The jobs of all journalists and other staff have been preserved by the sale of the business to the Hispanic media giant. And this settlement will allow staff equity holders to recoup the salary or bonus they gave up. Now, I hope A.J. Daulerio’s talents as an editor and writer can once again be appreciated. The shadow over Sam Biddle and John Cook, two other former Gawker journalists targeted by lawsuits, has been removed. I am sure they, and others, will continue to shed light on the new power.
It’s a shame the Hogan trial took place without the motives of the plaintiff’s backer being known. If there is a lasting legacy from this experience, it should be a new awareness of the danger of dark money in litigation finance. And that’s surely in the spirit of the transparency Gawker was founded to promote. As for Peter Thiel himself, he is now for a wider group of people to contemplate.
