Gawker Media Files For Bankruptcy
Gawker Media is a commercial online media company and blog outlet that was founded and owned by Nick Denton. Gawker came from humble beginnings in 2003. Gawker Media is the parent company for several very successful and popular weblogs including Gawker.com, Lifehacker, Deadspin, Kotaku, Gizmodo, Jalopnik, and Jezebel. With so much success in Gawker Media’s timeline, nearly forty five million dollars in revenue, and so many desirable weblogs under its reign, it is hard to wrap one’s head around the fact that the company filed for bankruptcy in 2016.
What exactly is bankruptcy?
Bankruptcy is the act of being bankrupt or completely broke. Filing for bankruptcy essentially pauses any standing debts that cannot be repaid. Chapter 11 bankruptcy is available for individuals, corporations, and partnerships. Chapter 11 bankruptcy reorganization has no limit on debt and large companies typically choose this type of bankruptcy to restructure debt. The person, or business, in debt typically can still have all their assets and operate their company under supervision. Chapter 11 bankruptcy is considered the most flexible of the bankruptcy chapters and is subsequently difficult to really define.
Things weren’t always so bad for Gawker Media.
Gawker Media has seen some financial success in the past. New York Magazine Jossip founder David Hauslaib estimated that Gawker.com had an annual advertising revenue of nearly one million dollars. The very low operating needs paired with advertising success led to Gawker Media boasting a healthy twenty million dollar revenue and an operating income of over two million dollars in 2010. Gawker Media continued to make good money without the need for investments from venture capitalist firms.
Blogs aren’t making as much money as we think and lawsuits can ruin a successful business.
Gawker’s founder Nick Denton has been quiet on the financial details of Gawker. He has, however, said convicting things about the financial profit of blogs. Of the matter, Denton has said on his personal website, “Blogs are likely to be better for readers than for capitalists. While I love the medium, I’ve always been skeptical about the value of blogs as businesses.”
While weblogs may not be a capitalist’s goldmine, other matters contributed to Gawker’s demise. The media organization has dealt with its share of controversy which lead to a large amount of lawsuits being filed in order to destroy Gawker Media.
Those lawsuits came from Silicon Valley billionaire Peter Thiel’s third-party funding. Thiel’s actions have raised serious concern about rich people tanking publications by paying for lawsuits that will lead to their demise.
Gawker Media is known for their controversy, the big reason Denton decided to file for bankruptcy.
Gawker Media is widely considered controversial for their content. In 2012 Gawker published a pornagraphic video of Hulk Hogan and Hogan’s best friend’s wife that subsequently led to a massive sixty million dollar lawsuit to be paid to Hogan for emotional distress. This lawsuit was the beginning for Gawker Media’s path to bankruptcy.
Director Quentin Tarantino filed a copyright lawsuit in early 2014 against Gawker Media for the leak of his 146-page script for his film The Hateful Eight. Tarantino said he gave the script to a small handful of trustworthy colleagues and never to Gawker Media for use. Tarantino said in his lawsuit, “Gawker Media has made a business of predatory journalism, violating people’s rights to make a buck. This time they went too far. Rather than merely publishing a news story reporting that Plaintiff’s screenplay may have been circulating in Hollywood without his permission, Gawker Media crossed the journalistic line by promoting itself to the public as the first source to read the entire Screenplay illegally.”
In 2013, Gawk Media and its founder Denton faced a Fair Labor Standards Act action brought by unpaid interns that worked for the company. The interns claimed that work they contributed to Gawker Media’s sites, including Lifehacker.com and Gawker.tv, directly led to substantial financial gains and were central to Gawker Media’s business model of internet publishing. They claimed that Gawker Media’s refusal to pay them at least minimum wage for their contributions and work violated state labor laws and the Fair Labor Standards Act. Some interns were paid as a result of the action.
A staff writer for Gawker Media published a post in 2015 that attempted to out an executive for Conde Nast by writing about alleged text correspondence between the executive and a gay porn star. There was outrage over the attempt to out the executive and Denton removed the story after his managing partnership voted it was unsavory. Gawker Media was rumored to have paid the executive a sum to avoid a future lawsuit.
In 2015 Gawker Media editors decided to unionize and joined the Writers Guild of America, East. Nearly seventy five percent of eligible employees voted in favor. While not entirely controversial, the decision to unionize led to public criticism of Gawker Media’s work conditions.
What is Gawker’s next steps?
Filing for Chapter 11 bankruptcy will save the company and keep it running as long as the company is sold to another entity, free of legal liabilities, at auction. This entity has been revealed to be Ziff Davis publishing group, who now owns Gawker Media and all of its brands.
I am thinking about filing for bankruptcy. Who can help me?
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