After the judgment was handed down, Gawker Media was forced to put up a $50 million bond, which more than exhausted the company’s cash on hand. It was only a matter of time before the company’s financial position would become untenable, and that day was today. According to a New York bankruptcy court, Gawker Media’s total assets are listed at between $50 to $100 million, while it has liabilities ranging from as little as $100 million to as much as $500 million.
By filing for bankruptcy, Gawker Media can get around paying that $140 million judgment altogether. Before the legal brouhaha with Hulk Hogan kicked into high gear, Gawker Media was estimated to be worth between $250 million and $350 million. Now, following its unsuccessful court battle, Ziff Davis is said to circling the company’s assets with a check in hand for less than $100 million.
Gawker owner Nick Denton (pictured on right)
Ziff David CEO Vivek Shah just sent out the following memo to staff confirming his intentions to purchase Gawker Media’s prime properties:
I wanted to share some news about a potential acquisition for Ziff Davis. Earlier today, Gawker Media Group (GMG) filed for Chapter 11 bankruptcy. As part of that process, GMG plans to sell its media properties Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin, Jezebel and Gawker.
Ziff Davis has entered into an asset purchase agreement to acquire all of these properties (free of GMG's liabilities), subject to the outcome of a Court-supervised auction. Under the Chapter 11 process, the Bankruptcy Court will soon set a schedule for other potential bidders to enter the sale process. There will then be an auction, which will likely take place at the end of July.
In the event we become the acquirer, the additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming. With the addition of Jalopnik, Deadspin and Jezebel, we would broaden our position as a lifestyle publisher. Much like us, GMG is heavily active in driving commerce-based revenues and has an impressive publishing and commerce platform with Kinja.
As you can see, 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.
Even through this fog of uncertainty, Gawker Media owner Nick Denton aims to keep trudging forward, and he will continue to pay his employees. Denton posted the following tweet today once word of the bankruptcy filing came became public knowledge:
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