Major Interest In Buying 'Gawker,' Denton Files For Bankruptcy

Nick Denton, founder of Gawker, filed for personal bankruptcy today, just as the banker behind Gawker’s sale process revealed in an interview that there are “between a dozen and two dozen” parties interested in buying the bankrupt publisher.

Alex Sherman, host of podcast “Deal of the Week,” discussed Gawker's potential buyers with Mark Patricof, who is advising the company on its financial options, as well as the co-head of Houlihan Lokey’s Technology, Media and Telecommunications Group.

“It's a good business,” Patricof said in the interview, which was held on Bloomberg TV’s “Bloomberg Markets” program. “As people have been able to go past what they read or what they've heard, they see a really quality, profitable media company. In this day and age, there aren't many of them on the Internet."

Bloomberg TV’s Scarlet Fu asked Patricof if he thought Denton would have a role in the future of the company. "Anyone buying this business should take Nick's role going forward seriously,” Patricof said.

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Ultimately, however, Denton’s future is in the hands of Gawker’s next owner.

“Some of the buyers will think of him as a critical component, and some won’t. And that will determine whether or not he stays. Nick has lots of other companies in mind, things he wants to do next, so he’ll be OK,” Patricof said.

Gawker’s buyer will also get do decide whether Gawker, as a brand, lives.

“Time will pass, and it will stand firm as a quality brand — and people will get over this issue. Others just don’t want to go anywhere near it,” Patricof said.

In the interview, Patricof shut down speculation that Vox, Vice, Univision and PMC were potential bidders. “Likely none of those are going to be in the process,” he said.

One company that will be in the process is Ziff Davis, which owns PC Magazine. The publisher set an opening bid of $90 million. The final day to bid is August 15.

Gawker Media filed for Chapter 11 bankruptcy protection in June, after the company was slammed with a $140 million lawsuit in March in favor of pro wrestler Hulk Hogan (real name, Terry Gene Bollea). Lawyers argued that Gawker violated Hogan’s privacy by posting a 90-second film of him having sex with the wife of his friend, radio personality Todd Allen Clem, also known as Bubba the Love Sponge.

It was later revealed that the lawsuit was secretly funded by Silicon Valley billionaire Peter Thiel, who Gawker had outed as being gay in a 2007 article.

Today, Denton filed for personal bankruptcy to prevent Hogan from seizing his assets. Denton originally filed at a Florida appeals court to give him an emergency order that would block Hogan from collecting his dues, but his appeal was denied.

According to a report from Reuters, Denton listed assets of $10 million to $50 million and liabilities of $100 million to $500 million, naming Hogan as his largest creditor. According to court documents, Denton is personally liable for $125 million of the $140 million judgment.

Ironically, it seems that any press is good press.

After Gawker received $22 million in emergency loans from Cerberus Capital, which allows it to maintain operations for now, traffic to Gawker Media sites has increased from about 92 million global monthly unique visitors in April to about 104 million monthly global unique visitors in July, according to Quantcast.

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