What Lies Ahead for Gawker Now that a Tech Billionaire Is Bankrolling Lawsuits Against It?

Cash-strapped company reportedly looking to sell

If you thought the Gawker saga would slow down as we creep closer to Memorial Day weekend, you thought wrong.

Following a dizzying 24 hours that ended with Silicon Valley billionaire Peter Thiel admitting outright that he's been bankrolling multiple lawsuits against the media company, the discussion now turns to Gawker CEO Nick Denton and his ability to withstand all of these costly lawsuits. Though Gawker was dealt another loss on Wednesday when a Florida judge upheld the jury's decision to award Hulk Hogan some $140 million over Gawker's publishing of a sex tape in 2012, the company plans to appeal.

Despite Gawker's insistence that it will get the verdict overturned—the judge in the case is the most overturned judge in Pinellas County over the past four years—the company is still incurring a hefty legal price tag for a process that could take months. And for Thiel, who is going after Gawker over some not-so-nice stories written about him, bleeding the company dry could be just as important as Hogan's right to privacy.

"Gawker could be in a very perilous financial situation," Ryan Skinner, a senior analyst at Forrester, told Adweek. "They need to explore different ways of trying to secure the business going forward."

And that's exactly what Gawker has been doing. A pair of reports from the New York Post and Wall Street Journal set off alarms when the outlets revealed that Denton has been quietly soliciting bids for a potential sale of the company, in the event that he either has to pay the $140 million or the mountain of legal fees becomes too much. During the Hogan trial, it emerged that Gawker's annual revenue was a little less than $50 million last year.

"Everyone take a breath," said Gawker in a statement. "We've had bankers engaged for quite some time given the need for contingency planning around Facebook board member Peter Thiel's revenge campaign—that's how the Columbus Nova investment was arranged. We recently engaged Mark Patricof to advise us and that seems to have stirred up some excitement, when the fact is that nothing is new."

Denton owns a 68 percent stake in Gawker after bringing in the technology firm as the company's first outside investor. And Skinner notes that raising outside capital is certainly nothing new for any media company. "Any entrepreneur, especially a new media entrepreneur is always entertaining different types of options," he said. "There could be someone on the other side who would say 'Lets make an investment in media freedom, protection from the wraths of plutocrats.'"

But this is no ordinary situation, when you have someone like Thiel with endless pockets of resources who has publically made it known he wants to bring Gawker to its knees.

"It's always so hard to defend a place like Gawker, because they're so easy to not want to defend," said Syracuse's Robert Thompson, a TV and media historian and the director for the Bleier Center for Television & Popular Culture. "But as far as the First Amendment issue here, some of the most important First Amendment cases are about things that a lot of people don't like."

So while Gawker right now may just be looking for a cash infusion to make sure it can financially fight back against Thiel and Hogan, it's fair to wonder for just how long the cash will last.

"If this ends up being a long-term onslaught they're going to have to find some way to [raise capital]," said Thompson. "[Thiel] can really be a nuisance."

Over the past year Denton had taken steps to make Gawker "20 percent nicer" in an effort to court advertisers and turn Gawker in a larger media player, but Thiel's vendetta could end up making potential outside investors wary—a deal with Univision reportedly fell through because of the Hogan case—of putting money into a company that may have to deal with an endless array of legal fees.

"When you've got lawsuits pending and these kinds of issues, there are so many other digital properties that are waiting to fill the vacuum that Gawker would leave," said Thompson.