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Under pressure from a $140 million legal judgment in favor of Hulk Hogan, Gawker Media filed for bankruptcy protection on Friday, and is putting itself up for auction.
Global media company Ziff Davis has agreed to buy Gawker's seven media brands and other assets, though Gawker's sale will be conducted through a bankruptcy- court-supervised auction that may include other bidders, the company told CNBC.
The edgy media company, led by Nick Denton and known for blogs like Jezebel and Deadspin, had assets of $50 million to $100 million and liabilities of $100 million to $500 million, according to bankruptcy court filings in New York.
The filing came about three months weeks after a Florida jury slapped Gawker with a $115 million judgment in an invasion of privacy lawsuit by wrestler Hulk Hogan, whose real name is Terry Bollea, for publishing a tape showing him having sex with the wife of a friend. The jury later added $25 million in punitive damages. Late last month, it was revealed that tech billionaire Peter Thiel helped to bankroll Bollea's legal costs. Years earlier, a Gawker publication outed Thiel as gay.
"The sale and filing are intended to preserve the value of GMG's pioneering digital news business, safeguard the jobs of journalists and other staff, and allow GMG to fund the appeal against the $130 million judgment in the Hulk Hogan case," the company said in a statement. "Gawker Media Group is putting its properties up for sale after a coordinated barrage of lawsuits intended to put the company out of business and deter its writers from offering critical coverage."
Though Gawker said it is confident it will ultimately prevail in the Hogan lawsuit, it was unable to secure conditions to seek relief in an appeals court, it said.
Last month, a Gawker representative told CNBC it had engaged bankers "for quite some time" as a contingency plan for the legal battle, and the options included a sale. On Friday, technology blog Recode reported that Ziff Davis' bid to buy the entire operation was less than $100 million:
[Gawker] says it has a firm bid from publisher Ziff Davis. Gawker and its banker Mark Patricof assume that the company will eventually see higher bids while it is in bankruptcy protection. Last year, in advance of the Hogan trial, Denton figured his company was worth something in the $250 million to $300 million range.
Thiel declined to comment to CNBC about the bankruptcy filing.
Whatever happens to Gawker, it's already changed digital media, experts told CNBC. For an in depth look at Gawker's influence, read more here.
— Reporting by CNBC's Michelle Castillo, Alex Crippen and Steven Kopack.