Univision Is Buying Bankrupt Gawker Media for $135 Million
Univision, the Spanish-language broadcaster that has been rapidly expanding online through acquisitions, has agreed to buy bankrupt publisher Gawker Media’s assets for approximately $135 million, the companies confirmed on Tuesday.
Gawker began a court-ordered auction of its business on Monday after losing a $140-million court case earlier this year involving former wrestler Hulk Hogan, who sued Gawker for invasion of privacy after it published a clip from a sex tape he made with a friend’s wife.
Although a number of media companies including Vox and Penske Media were said to be interested in bidding for Gawker, the auction only involved bids from Univision and Ziff-Davis.
The latter had an existing $90 million “stalking horse” deal to buy most of Gawker’s websites, which the two companies announced when Gawker initially filed for bankruptcy protection in June. But the company said that it ultimately didn’t want to pay as much as Univision did.
“Gawker Media Group has agreed this evening to sell our business and popular brands to Univision, one of America’s largest media companies,” Gawker founder Nick Denton said in an emailed statement. “I am pleased that our employees are protected and will continue their work under new ownership — disentangled from the legal campaign against the company.”
After Hogan launched his lawsuit against the company, it was revealed that PayPal founder and early Facebook investor Peter Thiel had been bankrolling the former wrestler and others who were suing Gawker, in the hope of driving the company out of business.
Thiel wrote an op-ed in the New York Times on Monday saying he was happy he had pushed the company into bankruptcy, but maintained that he is interested in protecting a free press so long as it doesn’t publish private information without permission.
Before the Hogan lawsuit, Gawker founder Nick Denton estimated the company’s market value at about $250 million. The company had revenue last year of about $50 million, according to bankruptcy documents. The money from the Univision sale will be held in escrow while Gawker appeals the original decision.
In an email to employees after the Univision deal was announced, Gawker Media president and general counsel Heather Dietrick said that she was “very happy that we’ve found the business a good home with a buyer who pushes the limits in its journalism and will allow us to continue the mission.”
Univision has been aggressively expanding beyond its Spanish-language roots for the past year or so, launching a news website called Fusion as well as acquiring web properties such as the African-American culture site The Root and the popular humor site The Onion.
Under the terms of the deal, Univision will acquire most of Gawker’s websites, including Jezebel, Gizmodo and other properties. However, the status of the main Gawker.com site—which originally published the Hogan video clip—remains unclear, according to a report at Gawker.
The Ziff Davis deal also included a $2.5 million breakup penalty if the deal was not completed, which is presumably included in the price Univision has agreed to pay.
Ziff Davis was also going to keep Denton on a consulting contract for two years, but a report in the Wall Street Journal says he will have no role with Univision after the sale. The company has agreed to pick up the existing Gawker Media union contract as well as the lease on its Manhattan office, which it just moved into earlier this year, according to Politico.