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Gawker Media is bankrupt and up for sale, but its revenue and traffic are better than last year, says Nick Denton

And yes, Denton will watch Peter Thiel speak tonight.

Asa Mathat
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Peter Thiel and Hulk Hogan won and Nick Denton lost, so Denton has to sell off Gawker Media via a bankruptcy auction next month.

But Denton and his employees haven’t folded up shop. In fact, Denton says, the company is doing better than it was last year: Readership has bounced back after falling off earlier in the year, and the company is generating more money than it did in 2015, via advertising and e-commerce affiliate links.

Denton says that Gawker Media’s overall revenue is running about 7 percent to 8 percent above last year’s level, and that the company, which lost money last year, has a “small operating profit in the first half” of 2016.

Gawker Media’s sites are now attracting 62.2 million visitors monthly from the U.S., Denton said, citing traffic-counter Quantcast. That’s back to where it was in January.

Denton didn’t disclose an overall revenue number. But documents filed as part of Gawker’s bankruptcy proceedings today show that Gawker Media LLC, the company’s U.S. subsidiary, generated $17.8 million in revenue through the first five months of this year, and recorded revenue of $48.7 million in 2015 and $43.8 million in 2014.

Denton says that those numbers don’t include all of Gawker’s revenue, and that they aren’t calculated using standard accounting procedures, but via the method the court requires. But he says a comparable number for the same five-month period in 2015 would have been $15.8 million.

Whatever the increase is, it’s counterintuitive, given the shellacking Gawker Media has taken in the last few months.

It’s also good news for Denton. Gawker’s uptick could improve the price the company fetches via auction next month; in theory, if Denton ends up successfully appealing the privacy verdict Hogan and Thiel won earlier this year, he could end up with some of the sale price back in his pocket.

That’s down the road, if it ever happens. In the near term, Denton has a business to run and an auction to watch. And tonight, he’s going to watch Thiel, the man who funded the court case that bankrupted him, speak at the Republican National Convention.

Here’s any edited version of a conversation I had with him, via instant message, today:

Nick Denton: Hey hey. Can we do now? (I have a lunch.)

Peter Kafka: Yes. Are we talking or chatting?

Denton: Let's chat to start.

Kafka: I mean speaking on the phone or messaging, like this.

Denton: Oh, let's message: Easier to paste in numbers.

Kafka: Fine.

Denton: So, yeah, $17,810,993.32 is the first five months for the LLC, in the format that the court asks for, which is not [Generally Accepted Accounting Principles].

On the same basis, the comparable period of 2015 was $15,786,699.27 — so a 12.8 percent increase.

For the first half for the group as a whole, we expect to come in some 7-8 percent ahead. Small operating profit in first half — because of growth in revenues and reduction of 5 percent in operating expenses.

Traffic at 62.2m U.S. uniques (Quantcast), up in last three months, back to January level. (Pretty much exact same trajectory as Vox Media.)

Revenue lifted by commerce, especially. Amazon Prime Day gross sales [via affiliate links] were 63 percent up.

Kafka: The Vox Media folks are very envious of your Prime Day numbers.

Denton: I'm envious of Vox's premium brand advertising. I expect that, under new ownership, we'll see a strong rebound there.

Anyway, all-in-all, a good performance against strong headwinds — and an excellent indicator for the future of the business once it is free of these legal entanglements.

Kafka: Why do you think traffic and revenue have increased post-Hogan? It’s surprising.

Denton: It's a testament to the power of the brands, particularly in categories like tech and video games. Gizmodo and Kotaku will both hit all-time highs this month.

Kafka: Pokémon.

Denton: Yes, that too. Conventions. Comic-Con coming up. A measurable lift from Google AMP. No hit from the Facebook algorithm change.

Kafka: After the Hogan verdict and the bankruptcy filing, Vox Media hired one of your employees. I assume other publishers are talking to Gawker Media employees as well. How do you keep them at the company given the impending sale?

Denton: Most of all, our people are battle-hardened. Now that it's clear that these lawsuits are driven by a Trump-supporting billionaire, we feel like we're fighting the good fight. And I think most people are looking forward to a secure existence within a larger media group.

Kafka: Ziff-Davis, the stalking horse bidder in the auction, has indicated that they don't want to operate Do you think whoever ends up buying the company will want to keep Gawker? And are you interested in buying Gawker back from Ziff or whoever the buyer turns out to be?

Denton: I don't think it's wise for me to speculate. Ziff has agreed to buy all the properties.

But has been doing great, too. First to the Melania supercut. Highest traffic since the focus on politics and culture.

Kafka: So on the one hand, this all great for you since you're selling an asset that is improving. On the other hand, you have to sell your asset.

Denton: Yeah, this is bittersweet. We will find a good owner for the brands and an employer for the people. But Gawker Media Group was the only truly independent digital media company, founded by a journalist, focused on a journalistic mission, beholden only to readers. The business and the people will thrive under new ownership, which will be sweet to watch, but Peter Thiel did succeed in forcing us to give up our financial independence, which is the bitter part.

But hey, you guys do great work even with Comcast as a big investor.

Kafka: Indeed! But it’s very different. Anything else before you lunch?

Denton: Hmm, let me think. Oh, we're seeing some revenue lift from Facebook Instant Articles. Rising eCPMs.

I have a theory: That strength in category is particularly important for traffic, commerce and ad deals. Such a surfeit of general news, with the explosion of millennial-oriented properties — and advertising targeted against categories and influencers tends to perform better.

I assume you're seeing the same with The Verge and Polygon.

Kafka: Gotta ask the folks who run those properties! But yes, that sounds reasonable.

Oh. One other question: What are you doing during the Thiel speech tonight? Are you going to watch?

Denton: Of course I'm going to watch. I've been invited to a couple of Thiel-watching parties. Thiel told Tyler Cowen that the really good ideas were "way more dangerous" than his belief in the power of monopolies. I hope he is as frank as possible about his really good ideas.

Nick Denton discusses the Hulk Hogan sex tape in June

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