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Univision is buying bankrupt Gawker Media

Univision is buying bankrupt Gawker Media
Nick Denton, Gawker's outgoing chief executive, informed staff members of the website's impending closure on Thursday. (Associated Press)

Univision Holdings Inc. is buying Gawker Media, the online media and blog network in bankruptcy.

A person familiar with the proceedings said the only other bidder for Gawker, Ziff Davis, withdrew its $90-million bid Tuesday. The sale to Univision, the leading Spanish-language TV broadcaster,  will need the approval of a U.S. bankruptcy court judge.

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A Univision spokesperson did not comment on several reports that put the company's winning bid at $135 million.

"I am pleased that our employees are protected and will continue their work under new ownership — disentangled from the legal campaign against the company," Gawker Media founder Nick Denton said in a statement. "We could not have picked an acquirer more devoted to vibrant journalism."

A takeover of Gawker Media contributes to Univision's efforts to expand its digital media properties aimed at reaching younger consumers, though Univision could soften the sharp tone that has come to define Gawker's properties.

Earlier this year, Univision, which has been mulling an initial public offering for more than a year, took over ownership of the cable network and news site Fusion, which targets millennial viewers. The company has recently added to its digital portfolio by taking stakes in online humor site the Onion and the African American news site the Root.

Gawker Media's properties include the flagship gossip site Gawker, the female-oriented Jezebel, the sports site Deadspin, the tech-oriented Gizmodo and Jalopnik, which is aimed at auto enthusiasts.

Gawker started in 2003 as a blog focused on New York City media that shaped gossip and water cooler conversation in newsrooms and publishing houses. As it rose in prominence, Gawker began writing on broader issues, popularizing a snarky tone that came to define a certain style of blogging. It mixed irreverent posts with serious journalism.

Among Gawker Media's greatest hits, Gizmodo acquired a top-secret prototype of the iPhone 4 that had been lost at a bar by an Apple engineer. Gawker exposed Toronto Mayor Rob Ford's crack cocaine habit. And Deadspin revealed that Notre Dame football star Manti Te'o's dead girlfriend was a hoax.

At times, though, Gawker Media pushed the envelope.

Denton's company was forced into bankruptcy this spring after a Florida jury awarded $140 million to Terry Bollea, better known as Hulk Hogan, who had sued Gawker for invasion of privacy.

In October 2012, Gawker posted a two-minute excerpt of a sex tape featuring Bollea and a friend's wife without his permission.

Peter Thiel, a Silicon Valley investor and co-founder of the online payment service PayPal, helped finance Bollea's case. Thiel provided the support because he believed Gawker invaded his privacy when it revealed in a 2007 blog post that he is gay.

"I had begun coming out to people I knew, and I planned to continue on my own terms," Thiel wrote in a New York Times op-ed piece published Monday. "Instead, Gawker violated my privacy and cashed in on it."

Gawker maintained it had a 1st Amendment right to present the tape excerpt on the Web because Bollea had publicly discussed his sex life in the past, making it a "matter of public concern."

Gawker has appealed the verdict, but the court finalized the $130-million judgment and allowed Bollea to immediately seek payment. That led the company to file for bankruptcy.

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Gawker's flagship website has since moved away from celebrity and media gossip to more political content. The transition led to a decline in traffic this year. But visits to Gawker's other sites have remained steady. Gizmodo and gaming site Kotaku showed significant growth year-over-year in July.

"They seem to have retained their audience," said Jonathan Taplin, a USC Annenberg professor and former media investment banker. "What Gawker has is a financial problem, not an audience problem."

Digiday reported that Gawker Media took in revenue of $48.7 million in 2015.

In the weeks leading up to the bankruptcy auction, there had been speculation that dozens of media companies were interested in Gawker Media. But Univision and Ziff Davis were the only bidders.

Karen North, another Annenberg professor, said it seems unlikely that Gawker would retain its irreverent personality once taken over by a larger media company. She called the deal "a free spirit being bought by a corporate giant."

"The bankruptcy and the lawsuit were the end of Gawker as we knew it," North said. "When you get into bigger and bigger companies, they impose more rules. They have to. They're held more accountable for their actions. Gawker had a formula that worked. Whether it can work with more limits put on them is a question that will be answered very soon."

But Taplin said he wouldn't expect Univision to change much about Gawker's operations or its snarky editorial voice, though he said Univision probably will be at least somewhat more cautious than Denton.

"They'll probably have a little bit better liability lawyers," he said.

Times staff writer James Rufus Koren in Los Angeles contributed to this report.

Twitter: @SteveBattaglio

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UPDATES:

6:55 p.m.: This article was updated with an additional quote.

6:30 p.m.: This article was updated with additional details.

5:40 p.m.: This article was updated with additional details.

3:40 p.m.: This article was updated with additional details.

This article was originally published at 10 a.m.

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