Gawker published a sex tape, a jury ordered $140M — and a blog empire died overnight

On October 4, 2012, Gawker editor A.J. Daulerio published a two-minute excerpt from a 30-minute sex tape of professional wrestler Terry Bollea (Hulk Hogan) with Heather Clem, including ten seconds of explicit sexual activity. Bollea sued Gawker for invasion of privacy in Florida state court. The case attracted little attention until trial.

During the March 2016 trial, Daulerio admitted under cross-examination that the depiction of Bollea's genitalia had no news value. When asked at what age a non-consenting subject would make a sex tape non-newsworthy, Daulerio answered 'four' — a flippant comment that demolished the defense's credibility with the jury. After two weeks, the jury awarded $115 million in compensatory damages and $25 million in punitive damages — $140.1 million total. Post-trial motions to reduce the amount were denied.

The $140 million verdict was more than Gawker could survive. It was later revealed that Silicon Valley billionaire Peter Thiel had secretly funded Bollea's lawsuit with $10 million. Thiel's motivation was personal: Gawker had published an article outing him as gay in 2007. He called his funding 'one of my greater philanthropic things.' Gawker filed for Chapter 11 bankruptcy on June 10, 2016, just three months after the verdict.

At auction in August 2016, Univision Communications bought Gawker Media's six websites — Deadspin, Gizmodo, Jalopnik, Jezebel, Kotaku, and Lifehacker — for $135 million. The flagship Gawker.com was shut down. In November 2016, Gawker and Bollea reached a $31 million settlement that included the removal of three articles, including the sex tape post. The verdict and its aftermath became a landmark case at the intersection of privacy, free speech, and the power of litigation funding.