Gawker Media, the New York City company that owns the eponymous news website and several other popular blogs, has filed for bankruptcy and plans to sell itself instead of paying $140 million to pro wrestler Hulk Hogan, who won an invasion-of-privacy suit against the media company earlier this year.
The company, which was founded in 2003 and has grown to be one of the most prolific online media companies in the country, filed for Chapter 11 protection on Friday and announced that it was selling itself to publisher Ziff Davis.
"We are encouraged by the agreement with Ziff Davis, one of the most rigorously managed and profitable companies in digital media," said Nick Denton, the founder of Gawker Media. "A combination would marry Ziff Davis’ strength in e-commerce, licensing and video with GMG’s premium media brands."
Gawker said it plans to conduct the sale while under the protection of Chapter 11, which shields companies from creditors while it reorganizes finances. The sale will be conducted through a bankruptcy auction. Other bidders can offer to buy the company for a higher bid than Ziff Davis, which offered less than $100 million for the company, according to Recode.
Gawker Media is comprised of Gawker, its flagship site; Deadspin, a sports blog; Gizmodo, which covers technology; a women's site called Jezebel; gaming blog Kotaku; car site Jalopnik; a commenting platform called Kinja; and several other sites. Ziff Davis owns a portfolio of tech-centric properties including gaming site IGN, lifestyle site AskMen and online magazine PCMag.
The announcement comes amid an ongoing legal battle with Hogan, who sued the media outlet after it posted a 2007 video of him having sex with the wife of his best friend, Tampa radio personality Bubba 'The Love Sponge' Clem.
Hogan won a $140 million judgment in the case. The damages threatened to destroy Gawker, and the judgment amount is more than 10 times larger than the next largest debt, according to the company's bankruptcy filing.
Last month, Silicon Valley billionaire Peter Thiel revealed that he secretly bankrolled Hogan's case against the company. Thiel, a PayPal co-founder, was a frequent target of Gawker and was outed as gay by the site in one 2007 post.
Friday afternoon, Gawker founder Nick Denton tweeted that Thiel wouldn't silence the company's writers.
A spokesman for Thiel said he had no comment on Friday.
As part of its contingency planning, Gawker had hired an investment banker to explore its options, including a possible sale. Gawker said in the filing that it has as much as $500 million in debt and up to $100 million in assets.
During the Hogan trial, Gawker's Media was estimated to be worth $83 million.