The end of Gawker Media as an independent company is near.
Under financial pressure from a $140 million legal judgment in an invasion-of-privacy lawsuit by the former wrestler Hulk Hogan - and contending with the deep pockets of Peter Thiel, the billionaire Silicon Valley entrepreneur who provided funding for the case and others against the organisation - Gawker filed for Chapter 11 bankruptcy and put itself up for sale two months ago.
At the time, the digital media company Ziff Davis submitted an opening bid of $90 million, essentially setting the floor for an auction on Tuesday. A dozen to two dozen parties have expressed varying degrees of interest in Gawker Media, and three to five companies have emerged as the most likely bidders.
So who might buy it? Here are some possibilities:
Ziff Davis
WHY IT MAKES SENSE:
Ziff Davis was the first company to publicly put a dollar figure on its interest in Gawker Media, and its $90 million bid might be more than other companies are willing to pay.
In addition, Ziff Davis, a once-mighty publisher of computer magazines, now has a portfolio of technology, gaming and men's lifestyle sites. "The additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming," Vivek Shah, the chief executive of Ziff Davis, wrote in an internal staff memo in June, referring to Gawker's media properties.
Shah also said other properties - Jalopnik, Deadspin and Jezebel - "would broaden our position as a lifestyle publisher."
But Ziff Davis, like other potential buyers, may be more interested in Gawker Media's e-commerce business, which the company has built over the last several years as it has looked beyond advertising for revenue.
WHY IT MAY NOT WORK
As a so-called stalking-horse bidder, any potential buyer would have to exceed Ziff's $90 million bid. But by submitting the first bid, Ziff Davis telegraphed what it was willing to pay, and it could be outbid in the auction if it does not think Gawker Media is worth much more. If Ziff Davis, a subsidiary of j2 Global, an internet services and publishing conglomerate, does end up the winner, Gawker Media would become part of a large public company. That could be good for Gawker if it is allowed to operate more or less on its own. But Gawker could end up being a small fish in a very large pond.
Univision
WHY IT MAKES SENSE
Univision, the Spanish-language media company, has made moves in recent months suggesting it is looking to build its online portfolio, particularly to reach a younger audience. In January, Univision acquired a large stake in The Onion, the comedy and satirical digital media company. And in April, it acquired full control of Fusion, a news site and cable channel that it started with the Walt Disney Company in 2013. Univision also owns other digital properties, including The Root, a site focused on African-American issues. Univision and Gawker Media had been in discussions about a potential investment in the past, though those ended because of the Hogan trial, according to two people briefed on the talks.
WHY IT MAY NOT WORK
Univision might not want to spend more money on digital investments right now. For Gawker Media, becoming part of Univision poses benefits and challenges similar to those of becoming part of Ziff Davis.
New York Magazine
WHY IT MAKES SENSE
New York magazine most likely does not have enough cash on hand to buy Gawker Media by itself. But it is owned by the Wasserstein family trust, and Pamela Wasserstein is the chief executive of New York Media, the magazine's parent company. Bruce Wasserstein, who bought New York magazine for $55 million in 2004, was an investment banker and founder of the private equity firm Wasserstein & Company, which manages capital on behalf of the Wasserstein family and other investors.
New York magazine, whose online brands include Vulture and The Cut, has also been on a digital push lately. It recently started Select All, a technology and culture site led by Max Read, a former editor of Gawker.
WHY IT MAY NOT WORK
It is not clear whether New York magazine will be able to muster up enough financial help, either from Wasserstein & Company or elsewhere, to secure a deal.
Penske Media
WHY IT MAKES SENSE
Penske Media, which owns brands including the Hollywood publications Deadline and Variety, could fit Gawker Media's sites into its portfolio. It has not shied away from buying down-on-their-luck media companies in the past: In 2014, it bought Fairchild Fashion Media, whose publications included the fashion magazine Women's Wear Daily, from Conde Nast for about $100 million. And it bought Variety for $25 million in 2012.
WHY IT MAY NOT WORK
Penske may not have the money (though it could team up with an investment firm or another company for help). Penske Media declined to comment.
Under financial pressure from a $140 million legal judgment in an invasion-of-privacy lawsuit by the former wrestler Hulk Hogan - and contending with the deep pockets of Peter Thiel, the billionaire Silicon Valley entrepreneur who provided funding for the case and others against the organisation - Gawker filed for Chapter 11 bankruptcy and put itself up for sale two months ago.
At the time, the digital media company Ziff Davis submitted an opening bid of $90 million, essentially setting the floor for an auction on Tuesday. A dozen to two dozen parties have expressed varying degrees of interest in Gawker Media, and three to five companies have emerged as the most likely bidders.
So who might buy it? Here are some possibilities:
Ziff Davis
WHY IT MAKES SENSE:
Ziff Davis was the first company to publicly put a dollar figure on its interest in Gawker Media, and its $90 million bid might be more than other companies are willing to pay.
In addition, Ziff Davis, a once-mighty publisher of computer magazines, now has a portfolio of technology, gaming and men's lifestyle sites. "The additions of Gizmodo, Lifehacker and Kotaku would fortify our position in consumer tech and gaming," Vivek Shah, the chief executive of Ziff Davis, wrote in an internal staff memo in June, referring to Gawker's media properties.
Shah also said other properties - Jalopnik, Deadspin and Jezebel - "would broaden our position as a lifestyle publisher."
But Ziff Davis, like other potential buyers, may be more interested in Gawker Media's e-commerce business, which the company has built over the last several years as it has looked beyond advertising for revenue.
WHY IT MAY NOT WORK
As a so-called stalking-horse bidder, any potential buyer would have to exceed Ziff's $90 million bid. But by submitting the first bid, Ziff Davis telegraphed what it was willing to pay, and it could be outbid in the auction if it does not think Gawker Media is worth much more. If Ziff Davis, a subsidiary of j2 Global, an internet services and publishing conglomerate, does end up the winner, Gawker Media would become part of a large public company. That could be good for Gawker if it is allowed to operate more or less on its own. But Gawker could end up being a small fish in a very large pond.
Univision
WHY IT MAKES SENSE
Univision, the Spanish-language media company, has made moves in recent months suggesting it is looking to build its online portfolio, particularly to reach a younger audience. In January, Univision acquired a large stake in The Onion, the comedy and satirical digital media company. And in April, it acquired full control of Fusion, a news site and cable channel that it started with the Walt Disney Company in 2013. Univision also owns other digital properties, including The Root, a site focused on African-American issues. Univision and Gawker Media had been in discussions about a potential investment in the past, though those ended because of the Hogan trial, according to two people briefed on the talks.
WHY IT MAY NOT WORK
Univision might not want to spend more money on digital investments right now. For Gawker Media, becoming part of Univision poses benefits and challenges similar to those of becoming part of Ziff Davis.
New York Magazine
WHY IT MAKES SENSE
New York magazine most likely does not have enough cash on hand to buy Gawker Media by itself. But it is owned by the Wasserstein family trust, and Pamela Wasserstein is the chief executive of New York Media, the magazine's parent company. Bruce Wasserstein, who bought New York magazine for $55 million in 2004, was an investment banker and founder of the private equity firm Wasserstein & Company, which manages capital on behalf of the Wasserstein family and other investors.
New York magazine, whose online brands include Vulture and The Cut, has also been on a digital push lately. It recently started Select All, a technology and culture site led by Max Read, a former editor of Gawker.
WHY IT MAY NOT WORK
It is not clear whether New York magazine will be able to muster up enough financial help, either from Wasserstein & Company or elsewhere, to secure a deal.
Penske Media
WHY IT MAKES SENSE
Penske Media, which owns brands including the Hollywood publications Deadline and Variety, could fit Gawker Media's sites into its portfolio. It has not shied away from buying down-on-their-luck media companies in the past: In 2014, it bought Fairchild Fashion Media, whose publications included the fashion magazine Women's Wear Daily, from Conde Nast for about $100 million. And it bought Variety for $25 million in 2012.
WHY IT MAY NOT WORK
Penske may not have the money (though it could team up with an investment firm or another company for help). Penske Media declined to comment.
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