Hulk Hogan received $140 million as compensation in March this year.

Explainer What the war between Gawker a billionaire and Hulk Hogan is all about
news Lawsuit Saturday, May 28, 2016 - 14:35

Three parties. One open letter. One lawsuit. This describes the news that broke headlines on Thursday, shaking up the world’s technology hub- Silicon Valley.

On Thursday, New York-based media house Gawker Media published an open letter to Peter Thiel, a Silicon Valley billionaire and venture capitalist, who co-founded PayPal, and is also one of Facebook’s early investors.

The open letter, penned by Gawker CEO Nick Denton, alleged Thiel’s hidden revenge strategy in funding former wrestler Hulk Hogan’s invasion-of-privacy lawsuit against the media house. Read the letter here.

The letter came in reply to Thiel’s interview to the New York Times, on Wednesday, where he accepted to having funded litigation for Hogan’s lawsuit.  “It’s less about revenge and more about specific deterrence,” he said, in his first interview after revealing his identity as Hogan’s clandestine funder. He also said that he has taken up this initiative on the insistence of his friends, who have been bullied by Gawker’s coverage.

Why revenge?

In 2007, Gawker media’s publication ‘Valleywag’ published a story on Thiel’s homosexuality, titled ‘Peter Thiel is totally gay, people’. Although the fact was known to most in the valley, it was not an openly discussed matter owing to reactions from ‘less tolerant places like Saudi Arabia’ as told by PayPal co-founder Max Levchin to Nick Denton.

Author Owen Thomas, however, went ahead and published the story in Valleywag. And although it has been close to decade since this news came ‘out’, publications like Quartz continue to believe that Thiel’s funding of Hogan’s lawsuit can only be looked as a ‘personal score to settle’.

Hogan’s suit

Hulk Hogan sued Gawker under ‘invasion-of-privacy’ for having published a sex tape without consent. After a two-week long trial, Hogan received $140 million as compensation earlier in March.

Thiel’s funding

Peter Thiel had funded Hogan’s lawsuit by financing $10 million towards the cause, as well as by roping in his personal lawyer Charles Harder. Denton has also alleged him of funding Shiv Ayyadurai and Ashley Terrill’s lawsuits against Gawker.

Calling Thiel a ‘comic book villain’, Denton further claims that the lawsuits have not only been filed against the publication, but also against individual authors. Investing over $20million for lawyers alone, the company has been pushed to the brink of bankruptcy.

Another billionaire enters

Another billionaire, eBay founder Pierre Omidyar is backing Gawker in its effort to appeal a $140 million judgement that could render the company bankrupt and has asked media outlets to support it.

Meanwhile, Gawker on Thursday confirmed reports that it was exploring the possibility of putting itself up for sale.