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How I sold the Gawker world

Mark Patricof just shopped Nick Denton’s loved-and-hated media company — and fetched $135 million.

Gawker CEO Nick Denton appeared onstage at the 2016 Code Conference in early June.
Asa Mathat for Vox Media

Investment banker Mark Patricof of Houlihan Lokey was hired by Gawker Media to explore strategic options, including a potential sale, as the digital media company fought a legal battle with professional wrestler Hulk Hogan, funded by Silicon Valley billionaire Peter Thiel. On Aug. 18, Gawker was sold to Univision, which beat out the only other bidder, Ziff Davis, with a $135 million offer.


Stop gawking. This outcome wasn’t a surprise. And, for the most part, everybody won — including Nick Denton and the Gawker team, the people who deserved to win the most.

The stats of the 30 or so calls I made looking to find a buyer for Gawker over the summer leading up to the Aug. 16 auction date looked something like this:

  • "No, thank you”: 10
  • “Sure, curious to take a look”: 10
  • “Is there a data room?” (a.k.a. serious interest): Five
  • “If I saw Nick Denton walking across the street and I were driving a fast car ...”: Five

Let’s break these down a bit. The 10 “No, thank you”s can be explained in two ways: Either the potential acquirers truly didn’t see a fit for a highly profitably $45 million media platform or, more likely, they were distracted by the legal issues surrounding Gawker.

The 10 who were “Curious to take a look” were from legit media companies, digital and traditional, who had an understanding of the value Gawker founder and CEO Denton had created, but also a bit of anxiety around the potential ramifications of associating with a “tainted” brand. Not all "tire-kickers," but most were never legit potential buyers.

The five who immediately asked for access to the data room (Ziff Davis and Univision included) understood what they were doing, and knew that the bankruptcy process offered an opportunity to get a top digital asset at a significant discount.

I'll leave out commentary on the five Gawker-haters, other than to say that one of them is a good friend who has his reasons for not wanting to sit next to Nick at a closing dinner, although he’s an evolved person, and gets why the deal played out as well as it did. The others ... not worth the space here to explain, other than to say they truly don’t "get it." I've come to know Nick as an honest and decent but badly misunderstood person.

In the end, the two parties who looked past the clutter and studied the actual business from all angles came into the auction process armed to win. Vivek Shah and Jimmy Yaffe, CEO and chief strategy officer of Ziff Davis, wanted the advantage of being the stalking-horse bidder, did their work early and made an aggressive move to be in first position when proceedings began. Univision, long interested in adding the Gawker brands to its digital media portfolio, played it differently, laying low, doing its work quietly and watching the pre-auction process play out as July turned to August.

While the news media covered the potential bidders who wanted their names in the press — whether or not they had the resources, management scale or confidence to actually compete on auction day — ZD and Univision maintained focus and stuck to their respective strategies.

We now know how it all played out. There can be only one actual winner in a bankruptcy auction, and after a long day where both sides fought fairly with high integrity, intensity and spirit, Univision came out on top. ZD also won, however, proving that they are a player in the digital media industry to be reckoned with going forward. They handled themselves with poise and confidence, and I’m quite sure we’ll be reading about their next big move sometime very soon.

Nick Denton and the journalists employed by Gawker (whose interests he put ahead of his own every single moment of this process) also won on Aug. 16. Nick is now free to move forward with his life, to focus on resolving the personal lawsuit, take a long well-deserved vacation and hopefully use the clean slate to start again. I, for one, will be there to help him. He deserves it — and I believe many more people agree than you might think.

The Gawker employees also win big, as Isaac Lee and Univision offer a great opportunity for them to continue their pursuit of genuine journalistic excellence. After all, that was always the singular goal for Nick and the team from Day 1. They backed that up over and over again for more than a decade, many times turning down M&A and financing overtures from many parties, including a large subset of the 30 parties I referenced above. Mistakes were made and lessons were learned, but isn’t that the case for most new companies building through the dawn of an industrial revolution?

And lastly, for Peter, Terry, their legal team and those who were offended, annoyed and insulted by Gawker over the years, I guess you can say they won, too. Gawker.com will no longer exist.

Not sure it was an entirely fair fight, as they fought with money while Nick and his team fought solely with heart and purpose. Either way, I hope the remaining suits will be dropped so we can call this a true win-win and move on.


A digital media pioneer and seasoned investment banker, Mark Patricof is the managing director at Houlihan Lokey. An expert on all types of entertainment industry transactions, he has advised a wide range of leading traditional and digital media and entertainment companies. Patricof currently serves as co-head of Houlihan Lokey’s Technology, Media & Telecommunications Group. Previously, he was co-founder and managing partner of Mesa Securities, a licensed broker-dealer investment bank focused on media and entertainment that was acquired by Houlihan Lokey in June of 2015. He has also held executive positions at the Rockwell Group, and co-founded <kpe>, a provider of digital solutions for media and entertainment companies. Patricof began his career with a six-year stint at Creative Artists Agency in Los Angeles.

This article originally appeared on Recode.net.

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