In 2007, Gawker Media’s tech-industry gossip site, Valleywag, outed powerful Facebook investor Peter Thiel as gay, in a post bluntly headlined “Peter Thiel is totally gay, people.” In the comments, Gawker founder Nick Denton wrote that the tech billionaire “was so paranoid that, when I was looking into the story, a year ago, I got a series of messages relaying the destruction that would rain down on me, and various innocent civilians caught in the crossfire, if a story ever ran.”
It’s taken Thiel a decade, a lawsuit, and an alliance with an ex-pro wrestler, but he seems to be fulfilling his promise. Forbes’s Ryan Mac and Matt Drange reported last night that Thiel has been secretly funding Hulk Hogan’s lawsuit against the company over a portion of a sex tape published on Gawker in 2012, which ended in an enormous $140 million judgment in March. The Times confirmed the Forbes report today. And, while it’s never good news to learn that a vindictive libertarian billionaire has been covertly financing your enemies, the timing of the revelation is perfect for Gawker, which is back in court today in the first stages of appealing the ruling. What better way to rally the crowd to your side than with the surprise unmasking of Hogan’s tag-team partner?
It’s a surprise that’s been in the works for months. A handful of media reporters Select All spoke with said that Denton has been pushing the theory that Thiel was backing Hogan since at least last year, when the Hogan team dropped a claim (“negligent infliction of emotional distress”) that would have kept Gawker’s insurance company, Nautilus, on the hook for damages. The theory was first publicly floated by Dan Abrams in early March of this year, in a post called “Might a Gawker Hater Be Covering Hulk Hogan’s Legal Bills?” (Abrams wrote that he’d “received a tip that certain Tampa lawyers believe a benefactor agreed to cover Hogan’s legal fees in some capacity.”)
It seemed unlikely, Abrams pointed out, that Hogan, who lost 70 percent of his assets in a 2011 divorce, could afford the enormous fees that his lawyers were no doubt racking up; but it also seemed unlikely that lawyers working on contingency would keep refusing settlement offers — let alone take a deep-pocketed insurance company out of the picture.
Abrams’s post didn’t go very far beyond the circles in which the theory was already moving. But on Monday night, the New York Times’s Andrew Ross Sorkin published an item, “Gawker Founder Suspects a Common Financer Behind Lawsuits,” that tracked closely with Abrams’s. “My own personal hunch is that it’s linked to Silicon Valley, but that’s nothing really more than a hunch,” Denton told the Times.
It was a somewhat odd item to run on the first page of the Times Business section — essentially, an opportunity for Denton to air out what sounded at the time like a crazy rumor — but, in short order, Forbes was on the scene: Citing “people familiar with the situation,” Mac and Drange identified Thiel as the person bankrolling the operation. “When reached by phone on Tuesday,” they write, “Denton said that he did not know of Thiel’s involvement but had ‘heard that name[.]’” (Thiel has so far declined to comment.)
According to a tweet from Mac, the Forbes reporters worked on the story for more than a month — but one imagines that Denton giving an interview to the Times on the subject was a powerful motivator to finish and publish the scoop. And now, on the day Gawker is back in court, Thiel’s involvement has gone from inside rumor to reported news.
The sympathizing effect of the news among journalists is already evident. For much of the Hogan trial, Gawker has been (at best) held at arm’s length by its peers — but the secretive involvement of a tech industry billionaire with deep pockets and a desire to see a media outlet destroyed is far more worrisome. As Josh Marshall of Talking Points Memo wrote — though not without a to-be-sure-Gawker’s-published-stories-I-hate aside — “the impact of being able to destroy a publication you don’t like by combining the machinery of the courts with anonymity and unlimited funds to bleed a publication dry.” Glenn Greenwald, a critic past Gawker stories outing gay men, emphasized that it “shows how financial struggles can destroy free press: no $ for sustained reporting, fear of rich targets.”
But even if the revelation has made Denton a more sympathetic figure, the impact of the news on the actual trial, if any, has yet to be seen. Earlier today, Judge Pamela Campbell denied Gawker’s motion for a new trial, as well as its motion to reduce the $140 million in damages. This was to be expected; Hogan’s hometown courtroom was never even remotely sympathetic to Gawker’s defense. The question now is the extent to which the Thiel story will affect Gawker’s chances in the appellate court, which are historically much more sympathetic to free speech proponents than standard juries. It’s much harder to present Hogan as a simple man bullied by New York’s media elite when you’ve got the financial backing of one of the most powerful men in Silicon Valley.
This post has been updated with news of today’s Hogan trial proceedings.