Ziff Davis appears to have the inside track on acquiring the assets of the newly bankrupt Gawker Media.
On Friday afternoon, Ziff Davis chief executive Vivek Shah circulated a memo, following reports that his company was interested in acquiring all the sites under the distressed property’s umbrella.
Bollea squared off against Gawker in March, after the site posted a clip of him having sex with a friend’s then-wife in 2012. In court, Bollea claimed the video was taken without his knowledge. After a two-week trial, a Florida state jury found that Gawker, in publishing the video, had violated the plaintiff’s right to privacy.
Earlier this week, presiding judge Pamela Campbell said via court papers: “The fact that people, even celebrities talk about their sex lives or make private recordings of themselves naked or having sex in the privacy of a bedroom, does not give the public the right to watch that person naked having sex without the person’s consent.”
According to the bankruptcy filing, Gawker obtained a loan from Silicon Valley Bank for $7.7 million with a credit line of $5.3 million. The media company, which operates its namesake site, Jezebel, Deadspin, Gizmodo and others, secured a second credit agreement from US VC Partners for $15 million.
Gawker has hired investment bank Houlihan Lokey to advise it on a potential restructuring strategy or sale. Sources had indicated earlier to WWD that Gawker could seek a stalking horse bid and sell off some of its other properties, in order to pay its legal bills.
During the Bollea trial, it was revealed that all of Gawker’s assets amount to $83 million, and that last year it earned a gross revenue of $48.7 million. This month, it was revealed that Silicon Valley billionaire Peter Thiel had been bankrolling Bollea’s lawsuit with the goal to put Gawker out of business. Gawker and its sister site ValleyWag had exposed Thiel as a gay man
In his memo, Ziff Davis’s Shah said Gawker plans to sell its media properties Gizmodo, Lifehacker, Kotaku, Jalopnik, Deadspin, Jezebel and Gawker. He noted that Ziff entered into an asset purchase agreement to acquire all the properties “free of Gawker Media Group’s liabilities, subject to the outcome of a Court-supervised auction.”
“Under the Chapter 11 process, the Bankruptcy Court will soon set a schedule for other potential bidders to enter the sale process,” he said. “There will then be an auction, which will likely take place at the end of July.”
Shah said the acquisition of consumer and gaming titles, Gizmodo, Lifehacker and Kotaku, would “fortify” its position in consumer tech and gaming. The remaining properties would help underpin its move to “broaden” its position as a lifestyle publisher.