This exec told employees, "in about 10 minutes we’re going to put this company into bankruptcy."
The headlines told the gist of the story: “Gawker Files for Bankruptcy, Will Be Put Up for Auction,” as the Wall Street Journal published in June.
But what was it like to deliver that news to the site’s editors and reporters?
Heather Dietrick, president of the Gizmodo Media Group at Univision—which eventually bought Gawker Media Group and changed its name—talked about the experience at Fortune‘s Most Powerful Women Summit in Laguna Niguel, Calif., on Wednesday.
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At one point, Dietrick, who was then Gawker’s president and general counsel, had to tell the staff, “in about 10 minutes, we’re going to put this company into bankruptcy,” she recalled on stage. She had to plea with employees not to flee or panic. “I had hundreds of terrified faces staring back at me,” she said.
That reaction was merited, given the stunning turn the business had just taken. In May, a Florida circuit court judge upheld a $140 million verdict against Gawker, in an invasion of privacy case brought by former pro wrestler Terry Bollea, known as Hulk Hogan. He sued the site after it published a tape of him having sex with the wife of his best friend in 2012. The bankruptcy filing blocked Bollea from taking control of the company through liens on its assets and allowed Gawker to keep publishing as it attempted to work out its financial woes. The story took on another layer of intrigue when it emerged that tech billionaire Peter Thiel had been bankrolling Bollea’s lawsuit for years in an attempt to ruin Gawker and its owner, Nick Denton.
Gawker.com, a media and celebrity gossip and news site, had a tradition of hiring people who were eager to speak up and ask questions. But initially, they didn’t make a peep in the meeting with Dietrick. “I got silence back,” she said. So she took it upon herself to start the dialogue by asking aloud her most pressing questions about the business’s future. “Then hands started going up,” she said, “Two hours later, we had people smiling and laughing.” Once they got back to work, traffic to the site increased as did revenue—minus the legal expenses, she added.
Gawker.com’s ultimate ending wasn’t a happy one though. Univision, the Spanish-language broadcaster and digital publisher, agreed to purchase Gawker Media’s network of blogs for $135 million in a bankruptcy auction in August, but was quick to shut down Gawker.com.
That move wasn’t necessarily a surprise for Dietrick. “Once you have a $140 million judgement [against you], you’re seen as a high risk property,” she said.
Nevertheless, she sees lessons in the whole debacle. Even before the impending presidency of Donald Trump posed challenges to the First Amendment, the case illustrated that “the First Amendment is strong in this country, but it can come under assault by powerful people who don’t like reporting [about them].”
But that shouldn’t discourage journalists, Dietrick argued. “Every story is worth it. Getting true information that people care about out is worth it,” she said. And she said she welcomes competitors to challenge the Gizmodo blogs the way the sites once disrupted the media landscape. Journalism, “is harder than you think,” she said, “but there is an opportunity now. Please, come on board and compete. We need it.”