Gawker Media filed for bankruptcy protection in a New York court on Friday, a move that could pave the way for the troubled digital property to be acquired by Ziff Davis.
The owner of properties including IGN and AskMen has reportedly already bid in the neighborhood of $100 million for Gawker, which lost a $140 million jury verdict in the Hulk Hogan trial that has since been upheld. The companies announced a purchase agreement shortly after the Chapter 11 filing went public but an auction is expected to be open to other bidders.
Denton, who is expected to file for personal bankruptcy as well, issued a statement hailing a potential marriage with Ziff Davis. “We have been forced by this litigation to give up our longstanding independence, but our writers remain committed to telling the true stories that underpin credibility with our millions of readers,” he said. “With stronger backing and disentangled from litigation, they can perform their vital work on more platforms and in different forms.”
“We look forward to the possibility of adding these great brands – and the talented people who support them – to the Ziff Davis family,” wrote Ziff Davis CEO Vivek Shah in a memo distributed to his company.
Filing for bankruptcy protection was largely expected once Gawker lost its previous bid to appeal that verdict. Investment bank Houlihan Loukey had already been helping Gawker founder and CEO Nick Denton explore his options for the digital publisher, which is also backed by Columbus Nova Technology Partners.
Putting up the company for auction could help finance Gawker’s legal costs; Hogan had the benefit of backing from Silicon Valley mogul Peter Thiel, who has helped finance his legal effort, as was revealed last month. The company will continue to operate even while in Chapter 11.
In addition, Gawker filed a bankruptcy lawsuit against Hogan and other parties that have sued the company to defend the company from having to pay should they lose in any of those legal proceedings.
Ziff Davis joins a list of other companies rumored to be kicking the tires on Gawker, including Univision and Vox. Variety parent company Penske Media Corporation has also been reported as a potential acquirer, but a spokesperson for the company denied that any such negotiations were ever held.
Traffic for Gawker Media, which includes brands ranging from Deadspin to Gizmodo, hit a 29-month low in April, with the flagship Gawker brand sinking to its smallest audience in three years.
Tellingly, the Gawker.com brand was not cited by Shah as one of the properties he valued, which opens the possibility that the site could be shuttered if Ziff Davis completed the acquisition.