Gawker Announces Deal to Sell to Ziff Davis – Unless Higher Bidder Comes Along

Sale will be conducted via bankruptcy auction, where other prospective buyers can bid up the price

gawker ziff davis

Gawker Media Group has entered into an asset purchase agreement to sell its seven media brands to Ziff Davis, following the company’s announcement earlier this morning that it’s filing for Chapter 11 bankruptcy protection.

“We are encouraged by the agreement with Ziff Davis, one of the most rigorously managed and profitable companies in digital media. A combination would marry Ziff Davis’ strength in e-commerce, licensing and video with GMG’s premium media brands,” Gawker founder Nick Denton said.

The sale will be conducted via bankruptcy court auction, during which other prospective buyers can bid up the price for the company. Last week TheWrap reported that Gawker received “multiple” bids in excess of $100 million.

During the sale process, GMG will maintain normal operations.

Gawker filed for Chapter 11 protection from creditors to offer the business free and clear of legal liabilities. GMG is being advised by Mark Patricof of Houlihan Lokey.

Patricof declined TheWrap’s request for comment.

The bankruptcy papers, filed in New York, list Gawker’s assets between just over $50 million and $100 million, and its liabilities between just over $100 million and $500 million. The number of estimated creditors is listed as between 200 and 999.

The biggest creditor by far listed in the papers is Terry Bollea, a.k.a. pro wrestling legend Hulk Hogan, whom the papers say is owed $130 million, though that debt is disputed.

The second largest creditor is the law firm Morrison Cohen LLP, with $115,379.48 owed.

“Gawker Media Group is putting its properties up for sale after a coordinated barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage,” Gawker and Ziff Davis said in a joint press release. “The protection afforded by the bankruptcy filing will allow GMG to exercise its rights to due process.”

In March, a jury awarded Hogan $115 million in compensatory damages, after the wrestler sued Gawker for publishing portions of a sex tape featuring him and the then-wife of radio DJ Todd “Bubba the Love Sponge” Clem. An additional $25 million in punitive damages was tacked on shortly thereafter.

Hogan had argued that Gawker’s publication of the sex-tape footage violated his privacy. In May, a judge upheld the verdict, denying Gawker’s request to reduce the damages.

The ruling upholding the verdict came shortly after reports that Silicon Valley billionaire Peter Thiel, whom Gawker attempted to out as gay in 2007, has been funding Hulk Hogan‘s legal actions against the blog network. Denton chimed in on Twitter this afternoon.

Gawker is appealing the Hogan lawsuit, the joint statement saying, “The company is confident it will ultimately prevail in the Hogan lawsuit, but was not able today to obtain from the trial court even a brief stay without onerous conditions to seek relief from the appeals court.”

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