Gawker Media

Gawker Media's 2016 bankruptcy was unusual—killed not by business failure but by litigation funded by a billionaire with a grudge. Peter Thiel, outed by Gawker-owned Valleywag in 2007, secretly funded Hulk Hogan's lawsuit over a sex tape Gawker published. The $140 million judgment exceeded Gawker's ability to pay, forcing bankruptcy. The mechanism failure was litigation risk without adequate insurance or reserves. Gawker had been recklessly provocative—which built its brand but created enemies. Traditional media organizations maintain legal reserves and libel insurance; Gawker operated without sufficient protection. When Thiel's funding enabled unlimited legal spending against Gawker, the company couldn't survive a war of attrition. Gawker's case demonstrated that litigation could be weaponized against media companies by determined adversaries. The company's assets were purchased by Univision, which shuttered the Gawker flagship while continuing other properties (Gizmodo, Deadspin, Jezebel). Nick Denton, Gawker's founder, declared personal bankruptcy. The case created a chilling effect on aggressive journalism—demonstrating that wealthy targets could destroy publishers through litigation economics.