Silicon Valley Debates Gawker Scandal

Last week, the digital media world just about exploded in response to the news that billionaire Peter Thiel, co-founder of PayPal and longtime enemy of Gawker, provided hefty financial assistance to Hulk Hogan in his defamation lawsuit against Gawker Media.

gawkerThe suit was brought to court after Gawker published a sex tape involving ex-WWE superstar “Hulk Hogan” or Terry Bollea. A Florida jury ultimately sided with Bollea to the tune of $140 million in damages.

Thiel is a board member of Facebook and has been a longtime financial supporter of the Committee to Protect Journalists. He confirmed that he provided financial backing for the Hogan case, partly due to Theil’s own concerns regarding Gawker Media’s journalism tactics.

More specifically, Gawker once existed as a site called Valleywag, which outed Thiel as gay in 2007 with a series of articles that also affected the lives of many of Thiel’s friends and family members. Thiel was a wealthy public figure at the time, but the publication of his sexual preferences provoked substantial criticism from media analysts as a violation of the man’s privacy.

As Thiel told The New York Times,┬áThiel regarded the Hogan case as an opportunity to further deter the media outlet from causing similar damage to people who lacked the financial ability to respond in a legal bid for their privacy. Theil went on to claim that the publication bullied people in an attempt to get attention despite lacking stories with any clear public interest. Accordingly, Thiel provided somewhere around $10 million to help finance Hogan’s legal case.

When Gawker lost the case, Gawker founder Nick Denton was reportedly looking to sell when the court denied the company’s motion to retry the Hogan case and the award amount was allowed to stand.

“We’ve always said we expect to prevail on appeal and we’ve always said we’re exploring contingency plans of various sorts so that’s not new,” said spokesperson Lexi Georgiadis.

hulk hogan“Everyone take a breath. We’ve had bankers engaged for quite some time given the need for contingency planning around Facebook board member Peter Thiel’s revenge campaign– and that’s how the Columbus Nova investment was arranged,” Gawker Media stated regarding its deal to sell a minority stake to Columbus Nova Technology Partners as a way to pay for the Hogan damages. “We recently engaged [Houlihan Lokey Managing Director] Mark Patricof to advise us and that seems to have stirred up some excitement, when the fact is that nothing is new.”

As to whether Thiel’s decision to help fund Hogan’s case was ethical, many are on the fence:

“It’s relatively common for the rich to sue news media just to try to get even, whether or not they have a case,” stated Rick Edmonds, media business analyst at the Poynter Institute. “This is a different twist, finding someone else with a better case and trying to damage the outlet that way. That may be dubious ethically, but I’m pretty sure it’s not illegal nor does it raise a First Amendment issue.”

Perhaps the issue raises another issue, which is that funding is the principal factor in civil cases as opposed to whether the rights of one party were infringed on by another.

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