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Gawker Files For Bankruptcy As It Faces $140 Million Judgment

ARI SHAPIRO, HOST:

The parent company of the news and gossip site Gawker, filed for bankruptcy today and is putting all of its websites up for sale. The company is seeking protection after it was ordered to pay a $140 million judgment to the former pro wrestler known as Hulk Hogan. NPR media correspondent David Folkenflik has been covering the case and joins us from our New York bureau. Hi, David.

DAVID FOLKENFLIK, BYLINE: Hey, Ari.

SHAPIRO: Let's start with this lawsuit that was brought by Hulk Hogan involving a sex tape. Remind us what this was all about.

FOLKENFLIK: Well, it's very much about that sex tape. And really in some ways there are two stories we're talking about. The first one absolutely - the man we know as Hulk Hogan - his real name is Terry Bollea, former professional wrestler was videotaped having sex with the wife of a good friend of his. That videotape got out.

It was the subject of gossip, and then it became a subject of coverage. Stills were posted on other news sites. Gawker obtained the footage and posted an excerpt of it. As Nick Denton explained it to me late last week, he said no footage, people don't believe you. So...

SHAPIRO: Nick Denton, the founder and owner of Gawker, yeah.

FOLKENFLIK: Absolutely right. And so they posted that along with their coverage. He sued in 2012, saying this is an invasion of privacy. What we did not know until just a few weeks ago was that his suit was financed by Peter Thiel, a Silicon Valley billionaire cofounder of PayPal, major investor in Facebook, who had been himself offended by a sister site to Gawker which had outed him in 2007. And if revenge is a dish best served cold then it's a very cold day indeed for Gawker today.

SHAPIRO: And Peter Thiel it sounds like has effectively won by getting Gawker to declare bankruptcy. How did this happen?

FOLKENFLIK: Well, so Gawker lost the judgment - $140 million dollar in that invasion of privacy suit filed in Florida with a sympathetic jury. Gawker is appealing that and is continuing to appeal that judgment. It asked the state judge down in Florida to put the payment on hold and say you don't have to pay that out until you've exhausted your appeals. Well, those appeals may be ongoing, but the judge said no, sorry that's not the way this works. You're going to have to pay instantly today after receiving that ruling. Up here in Manhattan, in federal bankruptcy court, Gawker filed for protection from its debtors - from its creditors to whom it would have to pay - obviously, Hulk Hogan chief among them.

SHAPIRO: You know, in a pretty bleak media landscape, Gawker was profitable. It was a model for new media. It's been around 14 years. It has lots of affiliated websites. What do we take away from this stunning fall?

FOLKENFLIK: Well, I see these two kinds of digital swashbucklers in conflict. You have a guy like Peter Thiel, a libertarian. He's a Trump delegate out in California. He's very much against government regulation. But he's very much in favor of being able to use his fortunes to pursue his interests and to disadvantage who he sees as his opponents.

Nick Denton sees a somewhat anarchic age online as well. That is that if stories are true and are meaningful to people and newsworthy by his definition, which includes a lot of gossip, then he should be able to post it. Denton, who's a very wealthy guy, declared assets of over 120 million personally, well, he lost in court to a guy who has much more money, Peter Thiel. And you see these two clashes of people who have made a lot of money in the digital space but have very different definitions of what that can mean.

SHAPIRO: I've heard people describe this as billionaires squelching the First Amendment. I mean, is this actually going to have massive implications on that scale?

FOLKENFLIK: It's got to send a chill up the spine of digital media entrepreneurs, particularly those who traffic in things that very powerful people with these new fortunes in Silicon Valley will find offensive. The First Amendment is still thriving. Let's be clear, the government didn't intervene to prevent this. But the consequences are real for publishing material that people find offensive. And I think people with money, as these new billionaires in Silicon Valley do, can try to squelch the consequences of what they see.

SHAPIRO: NPR's David Folkenflik, thanks.

FOLKENFLIK: You bet. Transcript provided by NPR, Copyright NPR.

David Folkenflik was described by Geraldo Rivera of Fox News as "a really weak-kneed, backstabbing, sweaty-palmed reporter." Others have been kinder. The Columbia Journalism Review, for example, once gave him a "laurel" for reporting that immediately led the U.S. military to institute safety measures for journalists in Baghdad.
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