Why would billionaire Peter Thiel want to bankrupt Gawker? That's the question circulating today, after Forbes reported that Thiel secretly backed Hulk Hogan's high-profile lawsuit against Nick Denton's publishing empire.
In the report, Forbes didn't provide an explanation for exactly how or why the PayPal co-founder, early Facebook backer, and Donald Trump supporter became connected to the wrestling star. There is no word on whether other financiers were involved in the high-stakes litigation financing arrangement.
"A spokesperson for Thiel declined to comment."
Why would Peter Thiel get involved in a wrestler's legal battle with a blog over a sex tape? Forbes suggests that Thiel was bitter at Nick Denton's publishing empire after the Gawker publication Valleywag outed Peter Thiel as gay in a 2007 item written by then-Valleywag editor Owen Thomas.
So, here's one circulating theory on the internet: Thiel had a common bond of violated sexual privacy with Hogan. Gawker published a Hulk Hogan sex tape none of us wanted to see online, least of all Hulk Hogan.
Earlier this week, before the Forbes report broke, Gawker founder Nick Denton said in an interview with the New York Times that he believed Hogan's lawyer Charles Harder was probably being paid by someone other than Hogan.
When reached by phone on Tuesday, Denton said that he did not know of Thiel's involvement but had "heard that name" along with others in the speculation that surrounded Hogan's first lawsuit. (Hogan and Harder sued Gawker again in a Florida state court earlier this month alleging that Gawker attempted to extort Hogan over the release of a sex tape that was the subject of the first lawsuit.) When asked why he thought financial backing was coming from Silicon Valley, Denton said that exposing the money and power in the tech industry was a relatively recent practice.
"We write stories about powerful people in New York, but there are plenty of outlets writing stories about powerful people in New York," he said. "We write stories about powerful people in LA, but there are plenty of outlets writing stories about powerful people in LA. What's unique about Gawker is that we're an internet publication and the tech industry is of particular interest to us. There are powerful people in Silicon Valley and the power of Silicon Valley is a relatively new phenomenon."
If Gawker loses its appeal in the Hogan case, the company may not survive. Was silencing the publication Peter Thiel's intent?
Again, from Forbes:
On top of the $140 million in total damages facing Gawker, the company has already likely accumulated millions of dollars in legal fees defending itself. Lawsuits like these can have a chilling effect on the rest of the media industry, said First Amendment expert Peter Scheer, as they may encourage other wealthy individuals to back litigation against media companies that run unflattering stories about them.
"That's often the purpose of these cases," said Scheer, the director of the First Amendment Coalition. "Winning is the ultimate chilling effect, but if you can't win the case, you at least want the editors to think twice before writing another critical story about you."