Univision to Buy Gawker Media for $135M
Founder Nick Denton has released a statement that he "could not have picked an acquirer more devoted to vibrant journalism."
Univision has emerged as the winning bidder in the auction to buy embattled online publisher Gawker Media, bringing about the end of 14 years of independence under founder and CEO Nick Denton. The broadcast company has agreed to pay $135 million for all seven of Gawker's websites, according to a source familiar with the proceedings.
Denton confirmed the sale, which was first reported by Recode, Tuesday in a statement. "Gawker Media Group has agreed this evening to sell our business and popular brands to Univision, one of America’s largest media companies that is rapidly assembling the leading digital media group for millennial and multicultural audiences," the statement reads. "I am pleased that our employees are protected and will continue their work under new ownership — disentangled from the legal campaign against the company. We could not have picked an acquirer more devoted to vibrant journalism."
Bids were due at the end of business on Monday, with just two contenders, Ziff Davis and Univision, having made formal bids. Other companies that were said to be exploring making a bid included Penske Media, owner of Variety and Deadline, and Vox Media, which operates a portfolio of sites that include The Verge and Recode.
While the suspense has ended, U.S. Bankruptcy Judge Stuart Bernstein will have to approve the sale before it is official, and a hearing currently is set for Thursday.
Gawker filed for bankruptcy in June, a month after a Florida jury ordered the publishing company to pay former pro wrestler Hulk Hogan a staggering $140 million in damages in an invasion of privacy lawsuit. Gawker is appealing the ruling, but in the meantime, Hogan remains the company's largest unsecured creditor. Denton filed his own bankruptcy claim earlier this month after the court concluded he is personally responsible for $10 million in damages for his role in posting the wrestler's sex tape.
At the time of Gawker's bankruptcy filing, publisher Ziff Davis — which owns PC Magazine and IGN — put up a $90 million stalking horse bid for Gawker's assets, making it the automatic buyer if no other bidders emerged or none of the bids exceeded Ziff Davis' offer. At one point there appeared to be several potential bidders for Gawker, which owns a portfolio of sites including Jezebel and Deadspin, with chief restructuring officer William Holden testifying in July that 55 potential bidders had emerged during the auction process.
Univision has been trying for more than a year to impress Wall Street in order to some day launch a successful initial public offering, hence its effort to beef up high-growth digital offerings that appeal to English-speaking millennials so that it is seen as something more than a media company for older-generation Hispanics. Over the last year it has acquired a growing portfolio of digital media properties including satirical news site The Onion, youth-targeted media brand Fusion and The Root targeted toward African-American audiences.
When Univision acquired The Onion, digital general manager Mark Lopez acknowledged that the company's strategy might not be immediately clear. “At a top level, these brands look unrelated,” he said. “But we’re looking at reaching the next generation of millennial and multicultural consumers, and the only way to do that is digitally."
At the time, Carl Salas of Moody’s Investors Service commended them for looking beyond their core audience: “When you look at an IPO, you want to see a number of growth opportunities, and digital investments have higher-growth revenue streams.”
Ultimately outbid by Univision, aging publishing company Ziff Davis, a subsidiary of internet company J2 Global since 2012, hoped to add the Gawker portfolio as it reinvents itself into a digital company through the ownership of websites including AskMen.com and Geek.com.
On Monday, the day before the auction was to take place, billionaire Peter Thiel, who backed Hogan's lawsuit against Gawker — over the publishing of a sex tape featuring Hogan — wrote an op-ed for The New York Times in which he stated that he was "proud to have contributed financial support to his case."
Denton has painted Thiel as a billionaire bully who will lose in his attempts to silence Gawker, telling staff in a memo the brands will thrive under new ownership and continue to seek "sometimes gossipy truths."