Gawker Media is raising outside funding, and for a specific purpose — it says it’s getting ready for its legal battle with Hulk Hogan.
As first reported in the International Business Times, the company has called for an “extraordinary general meeting” of shareholders on Thursday, where it will discuss changing its capital structure to accommodate new financing.
We’ve confirmed the news with a source of our own, but it turns out we didn’t need to. When we reached out to Gawker founder Nick Denton (pictured at left in the photo above) the company sent us this statement:
With the Hulk Hogan trial beginning in early March, Gawker Media is fortifying its finances to ensure full resources are in place for the continued cost of litigation. Gawker Media is the most heavily trafficked digital media company that has not raised institutional funding and continues to grow at double-digit rates, with significant untapped opportunity across its seven core brands. Until now, Gawker Media has been funding the Hulk Hogan legal expenses from general revenues and given the expenses of continuing to defend our First Amendment rights, the management of Gawker Media has concluded that additional financing should be locked in before the trial begins.
Gawker declined to comment further, but the fundraising process has “reached an advanced stage,” according to The Wall Street Journal.
Hogan, whose real name is Terry Gene Bollea, has filed a $100 million privacy lawsuit against Gawker over a sex tape that the company’s flagship gossip site published in 2012. It’s not clear how much the funding is intended to cover legal fees vs. general company expenses vs. an insurance policy in case Gawker loses the suit. (Denton said last summer, “We don’t keep $100 million in the bank, no.”)
Even aside from the lawsuit, 2015 was a bumpy year, with high-profile resignations and a new focus on political news for the Gawker site. The company also secured an $8 million loan from Silicon Valley Bank last summer.