WASHINGTON — (CNN) Gawker Media has filed for bankruptcy, and the bidding for its assets begins now.
On Friday, the embattled media company said it had agreed to sell all seven of its brands and other assets to the tech publisher Ziff Davis.
The Ziff Davis bid — worth $90 million to $100 million, according to sources — sets the floor for the bankruptcy auction process.
“The bidding begins now — so we will find out how much others will bid,” a source with direct knowledge of the process said.
The Chapter 11 bankruptcy filing in Manhattan was motivated by the company’s agonizing and all-consuming legal fight with Hulk Hogan — a court battle that was secret funded by Silicon Valley billionaire Peter Thiel.
A spokesman for Thiel declined to comment on Friday.
Gawker Media founder and CEO Nick Denton said in a tweet, “Even with his billions, Thiel will not silence our writers. Our sites will thrive –under new ownership — and we’ll win in court.”
The asset purchase agreement to Ziff Davis, the owner of PC Magazine, marks the start of the bankruptcy auction process. Bidding is expected to continue next week.
Denton said he was “encouraged” by the agreement with Ziff Davis, which he called “one of the most rigorously managed and profitable companies in digital media.”
Ziff Davis signaled that it is interested in Gawker Media titles like Jezebel and Gizmodo, but the company’s statement noticeably lacked any mention of the flagship Gawker.com, where the offending Hogan story was published in 2012.
In March, a Florida jury awarded Hogan a staggering $140.1 million judgment in the former profssional wrestler’s invasion of privacy trial against the company.
Although bankruptcy was widely expected as necessary protection against the threat of a big payout in the Hogan lawsuit, prompted by Gawker’s 2012 publication of excerpts from his sex tape, it still brings a cloud of uncertainty over the company.
Gawker is still pushing ahead with its appeal of the judgment and has maintained confidence that it will ultimately be vindicated, but the company has been openly entertaining a sale.
At a conference earlier this month, Denton said the company has a “whole bunch of inbound interest” from potential buyers.
In truth, the ripples of Hogan’s lawsuit were felt at the company before the trial even began. Earlier this year, Gawker sold a minority stake to the investment company Columbus Nova Technology Partners to gird itself against the lawsuit.
That was a first for the once-fiercely-independent media company, and a signal that the legal battle had forced Denton’s hand.
Thiel, a co-founder of PayPal, confirmed last month that he has funded Hogan’s lawsuit against Gawker along with others as a measure of “deterrence.”
For years, Gawker’s sites have pilloried Thiel, ridiculing his business failures and stridently conservative views. In 2007 one of its sites published a story titled “Peter Thiel is totally gay, people.”
“Gawker, the defendant, built its business on humiliating people for sport,” Thiel said in a statement last month. “They routinely relied on an assumption that victims would be too intimidated or disgusted to even attempt redress for clear wrongs. Freedom of the press does not mean freedom to publish sex tapes without consent. I don’t think anybody but Gawker would argue otherwise.”
Denton, for his part, has sought something of a truce with Thiel.
In an open letter published last month on Gawker’s flagship site, Denton invited Thiel to a debate in a public forum.
“Peter, this is twisted. Even were you to succeed in bankrupting Gawker Media, the writers you dislike, and me, just think what it will mean,” Denton wrote. “I’m going to suggest an alternative approach. The best regulation for speech, in a free society, is more speech.”
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