Is This Nick Denton’s Exit Strategy From Gawker?
One night in mid-June, weeks before his privately-held company suffered a very public meltdown over the widely condemned outing of a heterosexually married Condé Nast executive, Gawker Media founder Nick Denton had dinner with Mark Cuban at Congee Bowery, a favorite of the downtown literary set.
During an after-dinner walk, according to a person familiar with the meeting, Denton floated the idea of the media mogul, Dallas Mavericks owner and Shark Tank star making a financial commitment to Gawker Media in return for an ownership stake.
It was, say sources, one of a series of conversations Denton has been having recently with potential investors as he moves to transform Gawker from a brand associated with guttersnipe gossip to a more conventional, advertiser-friendly, “20 percent nicer” media enterprise.
According to sources, Denton also has been seeking advice and possibly significant financial involvement from eBay billionaire Pierre Omidyar, whose First Look Media, publisher of The Intercept national security website, has offices in the same plushly renovated, high-rent building near Union Square where the 300-employee Gawker Media, forsaking its scruffier Elizabeth Street digs, has relocated as of today.
While clarifying editorial standards, Denton is also said to be working toward diluting his financial risk and possibly even cashing out of all or part of his 68 percent share of the company, which has been speculatively valued at anywhere from $200 million to $400 million.
A longtime Gawker insider said they were “shocked as hell” when Denton explained why he removed the distasteful story. “Because I’ve never heard Nick ever say the word ‘ashamed.’…When he said that, it tells me that Nick is going to be stepping down, and whatever new iteration of Gawker Media exists, he might not be part of it in six months or a year.”
This person, a close Denton-watcher, says that steps Denton has taken over the past seven months to restructure Gawker Media’s management team—and statements he has made more recently about the revised corporate mission—are consistent with “grooming the company for someone else.”
Denton, however, insisted to The Daily Beast that he’s sticking around. “I like many other people are choosing to recommit to Gawker,” he said in an email. “I’m more excited about our prospects than I’ve been in years. Real story.”
He added: “I’m excited to move into new office, take Gawker Media to the next level, with President Heather Dietrick running newsroom personnel and budgets. New exec hires coming.” (Dietrick, who is also the company’s general counsel, cleared the media executive story for publication and—ironically, given Denton’s new declarations of purpose—opposed its removal from Gawker.com.)
Meanwhile, Omidyar and First Look have been helpful to Gawker in the $100 million Hulk Hogan sex-video lawsuit that is going before a jury in Florida state court.
First Look recently joined with other journalistic outlets to oppose the celebrity wrestler’s motion barring journalists covering the trial from viewing the video in court.
While calling rumors of Omidyar’s contemplated investment in Gawker Media “unfounded speculation,” Denton said in a text message: “Pierre Omidyar is a great supporter of the First Amendment and free expression. I’m grateful for the support of First Look in ensuring the Hogan trial is open to the press and the public.”
Denton added that “he never had a discussion with Omidyar on a stake. That’s pure rumor.” A spokesperson for Omidyar didn’t respond to a question about the investment rumor.
At the time of his Chinese dinner with Cuban, at which they were joined by former Gawker editor in chief A.J. Daulerio (a co-defendant with Denton in the Hogan lawsuit) and then-editorial director Tommy Craggs (who quit last week, along with Gawker.com editor in chief Max Read, in a bitter blast at Denton after he ordered ordered the story pulled), the lawsuit was weighing heavily on Gawker’s majority owner.
Denton’s company has been hemorrhaging hundreds of thousands of dollars every month on pre-trial legal fees.
The trial, initially scheduled to begin July 6 in St. Petersburg, was recently postponed until later this year.
It was “just a friendly dinner,” Cuban told The Daily Beast in an email. “We talked about general business stuff. A lot of topics. But no one thing in particular.”
But during their postprandial stroll, according to an informed source, Cuban parried Denton’s suggestion that he consider an investment in lawsuit-stressed Gawker Media by advising Denton to take the company public in an IPO.
That would relieve the 48-year-old Denton, newly married to actor Derrence Washington and attempting by most accounts to take some time to smell the roses, of an increasingly hefty burden.
It could also make Denton, already a multimillionaire, fabulously rich.
But Denton insisted to The Daily Beast that he has no plans to cash out.
“We did talk about investment, but very generally, and Mark Cuban spoke highly of going public,” he said in a text. “We’re already quite public enough!” Denton added—a jesting reference to Gawker Media’s pungent airing of dirty laundry in recent days.
Denton said his widely-touted “reboot” of the Gawker.com blog—which he had earlier announced would launch today—would have to wait until the hiring of a new Gawker Media editorial director and Gawker.com editor in chief to replace the editors who quit in a blaze of glory last week to protest Denton’s decision to take the offending story down.
He is offering buyouts to any aggrieved staffers who wish to follow their example.
As of this writing, William Arkin, founder of Gawker’s national security site, Phase One, has taken the buyout, but apparently only after being encouraged to by his bosses.
“Two Fridays ago, when I read a story posted on Gawker that seemed to senselessly out a nobody for soliciting a gay porn prostitute, I immediately thought someone should be fired,” Arkin wrote in an email to colleagues. “I never thought it would be me.” He added that Gawker “is a miserable place, so driven by its own feverish pursuit that it has no clue what kind of world it inhabits and thus helps build. I hate to be hyperbolic, but want to understand ISIS or the Tea Party or Occupy or Charleston or Dylan? Look no further than Gawker and its ilk…”
Leah Finnegan, Gawker’s features editor, also signaled in a Tweet she was leaving the company, Monday. (Later in the day, Dayna Evans was also reported to be leaving the site for New York magazine.)
Denton, meanwhile, is pressing ahead with his “Gawker’s growing up” plan, as laid out in a lengthy manifesto released on Sunday—and echoed in his interviews with The New York Times and CNN’s Reliable Sources media criticism program.
Denton, who is occasionally accused of having a sensitivity chip missing, now vows to “inject some more humanity into Gawker.com,” the sharp-toothed blog—one of eight ranging from sports to technology and attracting 100 million monthly readers—from which his company takes its name.
That means, as Denton elaborated to the Times, that the flagship gossip blog will heretofore avoid “tabloid trash,” which he defined as “a scandal without any point. Infidelity, drug use, illness: These may be sufficient justification for a tabloid news site. But Gawker is supposed to be an intelligent tabloid, that covers juicy stories that show how the world works.”
Like the overwhelming majority of commenters on the story about the media executive, Denton said he “was revolted by the article,” adding, that he’s “ashamed to have it anywhere near the Gawker name. I am deeply sorry that any editor hired by me would ever believe that was a piece worth standing by. In hiring new newsroom leaders, this story will be a litmus test.”
Gawker.com staffer Leah Beckmann, who has been serving as the blog’s interim editor in chief after Max Read’s abrupt departure, reflected the internal skepticism about their founder’s intentions and the staff’s emotional exhaustion after the drama of the past two weeks.
“Gawker has always been driven by the ever-changing whims of Nick Denton,” she told The Daily Beast. “We’re prepared for what’s next.”