Sex and Danger: The Fall of Gawker Media

Neglecting to Measure Twice. Why are so many smart people not smart enough to realize what they don’t know? Probably because they want to be admired as the “smartest” or the “fastest” to make a judgement. Many times they are correct, but situations in which there is no second measurement are problematic since these constructs entail Iceberg Risk. As we know, 90% of an iceberg is underwater and not visible. Learn to identify situations that look great on the surface but do not hold up to that second measurement since this is where your dreams will likely hit that iceberg. Here is the story of how Gawker Media rushed a story to publication without thinking twice. The outcome was disastrous.

Neglecting to Measure Twice is one of the Seven Deadly Stupidities.

Gawker was a blog founded by Nick Denton in 2002. Denton was a former reporter for the Financial Times and Gawker was focused on celebrities, media, and anything else that could generate page views. Gawker brought us many critical things, such as: 

• The Gawker Stalker let you add the location to an interactive map anytime you spotted a celebrity.

• A reporter who ate mozzarella sticks all day at a TGI Friday’s to test the claim of endless appetizers.

• A high-profile CFO who paid $2,500 for a night with a gay prostitute.

You get the idea. Information that we just can’t live without. And yet, Gawker was generating more than 20 million page views per month and was one of the most popular destinations on the web. Gawker ran close to the edge. Many of its stories were put up and then taken down when evidence emerged that the story was less than truthful. There was no balanced story writing at Gawker; it was all about sensationalism and page views.

Not a whole lot of measuring going on.

Bubba was a DJ. When a rival DJ allegedly broke into Bubba’s office, among other things, he unwittingly stole the tape. The rival DJ just wanted to embarrass Bubba, so the Bollea tape was leaked and Gawker had a big hit with its publishing. You may have never heard of Terry Bollea, but you may know him by his stage name, Hulk Hogan.

For decades, Hogan was one of the most recognizable names and faces in the world. As a six-foot seven-inch professional wrestler with a massive set of muscles and long blond hair, he was one of a kind. (I never met Hogan, but I did need to shoo him off the hood of my car once as he was leaning on it in the valet area of a hotel.) Hogan sued Gawker for invasion of privacy in 2016.

Going to trial is an expensive undertaking, especially in a situation in which Hogan sued Gawker for millions of dollars. Gawker and its insurers would fight back with a vengeance, since if it couldn’t keep publishing whatever it wanted and generating those page views, Gawker would not have much of a future.

Why measure twice when we have such a good thing going?

But here is where the story takes yet another turn. Billionaire Peter Thiel is one of the most successful venture capitalists ever. His early successes included PayPal (together with Elon Musk), Facebook (early investor and still a board member), and Palantir (analyzes massive databases for the CIA and others). 

Thiel was known to be gay to a small circle of his friends, but the Gawker story changed the dynamic. He was publicly outed in 2007, which was a different time than today.

After the Hogan verdict was announced, it came to light that Thiel had funded Hogan’s legal costs to the tune of approximately $10 million. Hogan settled with Gawker for something in the range of $30 million; but it was over for Gawker, which soon filed for bankruptcy and was eventually shut down. As for Denton, he filed for personal bankruptcy.

A simple lesson here: Gawker and Denton should have thought twice about outing someone as gay, the publishing of a sex tape of such a high-profile individual and how it could ruin lives, rather than rush it to publication to generate a week’s worth of page views.