Hulk Hogan's Case Against Gawker Secretly Funded by Tech Billionaire

Backer Was PayPal Co-Founder Peter Thiel, Outed as Gay by Gawker in 2007

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The billionaire investor and Facebook board member Peter Thiel secretly helped bankroll the defamation case that resulted in a $140 million verdict against Gawker Media, threatening its very existence.

Mr. Thiel, the libertarian-leaning venture capitalist who co-founded PayPal, made a financial contribution to the lawsuit brought by former pro wrestler Hulk Hogan against Gawker, a media and celebrity-focused website, according to a person with knowledge of the matter. Mr. Hogan, whose given name is Terry Bollea, sued Gawker in 2012 over the publication of a tape showing him having sex with a friend's wife, claiming the publication cost him endorsements and inflicted emotional harm.

Mr. Thiel's involvement shows how a well-funded individual can hold sway over the fate of a media organization in an age when newsroom budgets are stretched thin. Presumptive Republican presidential nominee Donald Trump, also a billionaire, said recently that, if elected, he'll change libel laws so it's easier to sue publishers. Sheldon Adelson, the casino magnate, has filed libel lawsuits against several journalists, despite becoming a newspaper owner himself. And the billionaire Koch brothers were reportedly digging into New Yorker writer Jane Mayer's past and falsely accusing her of plagiarism after she wrote an article in the magazine about them that they didn't like.

Gawker and Mr. Thiel have a contentious history already; the website outed him as gay in 2007. In a post at the time, the website said Mr. Thiel's sexual orientation probably explained his "disdain for convention, his quest to overturn established rules." Mr. Thiel has since publicly acknowledged that he's gay. In 2009, Mr. Thiel told PE Hub Network that one of Gawker's publications, Valleywag, was the "Silicon Valley equivalent of al-Qaeda."

At the same time, Mr. Thiel has also been a major donor to the Committee to Protect Journalists, a nonprofit advocate of press freedom. In a statement, CPJ executive director Joel Simon said that while the group supports a person's right to "seek civil redress in cases of defamation," CPJ doesn't "support efforts to abuse the process by seeking to punish or bankrupt particular media outlets."

Forbes previously reported Mr. Thiel's assistance to Mr. Hogan. Hours before that, the New York Times published an interview in which Gawker founder Nick Denton said he believed the case against Gawker was being funded by an unknown third party.

"My own personal hunch is that it's linked to Silicon Valley," Mr. Denton was quoted as saying.

Mr. Thiel, 48, has supported a number of Republican politicians in the past. In 2012, he donated $2.6 million to Ron Paul and supported Ted Cruz's senate run. For this election cycle, Mr. Thiel provided $2 million to a super-PAC backing Carly Fiorina, who was a chief executive officer of Hewlett Packard. He recently showed up as a California delegate for Mr. Trump.

In March, a Florida jury awarded Mr. Hogan $25 million in punitive damages for invasion of privacy, coming on top of $115 million for economic harm and emotional distress.

"We trust the appeals court will correct the outsized Florida jury verdict and reaffirm the law that protects a free and critical press, which is more embattled and important than ever," Gawker said in a statement.

Neither Mr. Thiel nor Charles Harder, the attorney representing Mr. Hogan, responded to requests for comment. Mr. Harder has brought other cases against Gawker. In one, he's representing Shiva Ayyadurai, whose claims to have invented email were challenged by Gawker and other media. Facebook didn't respond to requests for comment.

Facebook was recently embroiled in controversy over allegations it suppresses conservative viewpoints in a service that shows what news stories are popular among users. Surreptitious efforts by a director to undermine a news organization may fuel continued questions as to whether Facebook can objectively curate information from an array of different viewpoints and outlets.

-- Bloomberg News

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