Billionaire Who Helped Bankrupt Gawker Says He Would Do It Again

PayPal Inc. Co-Founder Peter Thiel Interview
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As Gawker Media prepares for a court-ordered bankruptcy auction to sell off its assets to the highest bidder, the billionaire venture capitalist who helped drive the company under wrote in a New York Times opinion piece saying he is happy to have played a role in its failure—and he would happily do so again, if necessary.

Peter Thiel, a Silicon Valley venture capitalist who helped create the online payment company PayPal (PYPL) and was also one of the earliest investors in Facebook (FB), was revealed as the financial backer of former wrestler Hulk Hogan after Hogan won an unprecedented $140-million Florida court judgement against Gawker in March.

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Unable to pay such a massive penalty—which amounts to almost three times its annual revenues—Gawker was forced to seek bankruptcy protection. The company is now engaged in an auction to sell the company’s assets, a process that began today with bids from multiple companies. (Here is a list of the most likely bidders).

In his New York Times essay, Thiel said that he was “proud to have contributed financial support” to Hogan’s case, which involved a video clip that Gawker published from a sex tape the wrestler made with a friend’s wife. Thiel went on to say that he will continue supporting Hogan, since Gawker has said it intends to appeal, and that he would “gladly support someone else in the same position.”

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In fact, while the billionaire doesn’t mention it in his op-ed piece, he has also reportedly been involved in financing several other lawsuits against Gawker that haven’t gone to trial, some of which have even less legal merit than the Gawker case.

Although Thiel implies in his essay that the Gawker story about Hogan’s sex tape would not have been published by any right-thinking journalistic outlet, and that the First Amendment doesn’t and shouldn’t protect such behavior, two higher-court judges ruled before the Hogan decision that the Gawker piece was clearly covered by the Constitution’s free-speech protections.

Gawker CEO Nick Denton just challenged Peter Thiel to a debate. Watch Fortune’s video:

In an interview with the Times in May, Thiel said that he funded Hogan’s lawsuit and others as part of a multi-year campaign to try and bankrupt the company. “It’s less about revenge and more about specific deterrence,” he wrote. “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.”

Since his identity as Hogan’s backer was revealed, Thiel’s crusade against Gawker has been decried by a number of prominent journalists and defenders of a free press, who note that a billionaire bankrupting a media outlet as part of a personal vendetta raises serious questions about free speech.

In his New York Times essay, however, Thiel argues that there is a line that media should not cross that involves publishing images or other information that could destroy someone’s privacy, when that information is not in the broader public interest. Thiel says he himself was a victim of the blurring of that line when Gawker outed him as a homosexual in 2007 without his permission.

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The billionaire investor says a free press is “vital for public debate,” but that journalists must “exercise judgment” when it comes to invading a person’s privacy, and should condemn those who willfully cross it. “The press is too important to let its role be undermined by those who would search for clicks at the cost of the profession’s reputation,” Thiel writes.

Thiel, who also supports the idea of creating autonomous islands on which people could live and create their own laws, said he is in favor of a bi-partisan bill called the “Intimate Privacy Protection Act,” which would make it illegal to distribute explicit private images without a person’s consent, and would involve criminal penalties for those who profit from doing so.

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