Gawker Media is reportedly looking for partners to help it bring in new revenue as the company struggles to overturn a $140 million legal judgment for posting a sex tape that included wrestler Hulk Hogan.
One of those partners is Spanish-language broadcaster Univision, which has made a number of investments recently, including the acquisition of a 40% stake in satirical website The Onion. A Gawker spokesman confirmed that the two have had discussions about a potential partnership involving Spanish-language versions of sites like Gizmodo and Lifehacker.
Those kinds of talks aren’t surprising. Although Gawker is currently appealing the Hogan decision—which awarded the wrestler $115 million in damages, plus a further $25 million in punitive damages—there is a real possibility that even if the total is reduced, Gawker could wind up having to pay a substantial amount.
That possibility is what led the company to bring in its first large-scale outside financing in January, when founder Nick Denton sold a chunk of his publishing empire to Columbus Nova Technology Partners, a holding company associated with Russian oligarch Viktor Vekselberg that also owns Rhapsody Music.
Denton hasn’t said exactly how much of the company Columbus Nova acquired, or what the fund paid for its stake. Gawker Media’s market value has been estimated at around $250 million based on its revenue and growth rate. The Hogan trial heard the company was worth $83 million, but that was just the U.S. subsidiary rather than the parent company Gawker Media Group, which is based in the Cayman Islands.
According to financial statements that Gawker released last year, the company had revenue of about $45 million in 2014. Denton has talked about the network’s double-digit growth, which would put its revenue for last year in the $50-million range. A growing proportion of that amount comes from its e-commerce unit.
Unlike some other media outlets, Denton says Gawker has been profitable almost since inception (it made $6.7 million in operating income in 2014, according to its financial statements), and had never taken any outside funding or venture-capital investment until last year.
In addition to the potential costs of a Hogan judgement—and the cost of moving to a new office in the Flatiron District, which Gawker took out a $15-million loan to pay for—forging partnerships with other publishers and media companies seem like a wise strategy. The market value of digital media outlets has been tightening of late, with layoffs at Mashable and reports of missed revenue targets at BuzzFeed.