Grudge shuts a news site

A new book reveals how a billionaire took aim at the website Gawker

Hulk Hogan (center) with attorneys David Houston (left) and Charles Harder (right). Credit: Gawker Media.

Originally published in California Publisher, Spring 2018.

by Jason M. Shepard

A new book has revealed the fascinating and troubling backstory of a billionaire’s conspiracy to shut down a news organization.

The story should send a chill down the spine of every journalist.

In “Conspiracy: Peter Thiel, Hulk Hogan, Gawker, and the Anatomy of Intrigue,” journalist Ryan Holiday shows how a Silicon Valley billionaire secretly funded Hulk Hogan’s lawsuit against Gawker Media for posting a 90-second clip from a sex tape.

Depending on your perspective, the hero or villain in this story is not Hogan, but Peter Thiel, the billionaire investor who sought revenge over a Gawker Media story years earlier that outed him as gay.

In March 2016, a Florida jury issued a $140 million judgment against Gawker. When I previously wrote about the case, Gawker was appealing the jury judgment and I speculated on its precedent-setting power (“Too soon to judge impact of Hulk Hogan’s payout,” Spring 2016 California Publisher).

At its peak, Gawker Media’s websites, which included Gawker, Deadspin, Kotaku, Gizmodo, Defamer, Fleshbot, Valleywag and Jezebel, brought in more 500,000 page views a month and $40 million in annual revenue.

Now, Gawker’s empire is no more, having been liquidated in bankruptcy through a settlement that also bankrupted Gawker’s owner, Nick Denton. Univision bought many of the assets.

“The Gawker verdict represents that someone with financial backing can effectively eliminate a news organization. It has a chilling effect,” Katie Townsend, litigation director at the Reporters Committee for Freedom of the Press, told the Hollywood Reporter.

For decades, the press has operated with the belief that the First Amendment provides near-absolute protections for publishing truthful information about public figures and public affairs. The Gawker case weakens that principle.

Holiday’s book reads like an international spy thriller through the eyes of Machiavelli. The narrative is driven by Thiel’s hunger to overthrow a media company he likened to Al Qaeda.

It wasn’t until after the Hogan jury verdict that the world learned Thiel had secretly funded the lawsuit. Holiday’s book, which is based on interviews with the key players, makes it clear that the legal conspiracy against Gawker began years earlier.

In 2007, the website Valleywag, part of Gawker Media, posted a story about Thiel titled “Peter Thiel is Totally Gay, People.” Thiel had founded PayPal and sold it to eBay for $1.5 billion in 2002 and became one of the largest investors in Facebook.

It wasn’t just the story that irked him, Thiel said, but a comment Gawker owner Nick Denton posted about Thiel’s obsession over keeping his sexuality a secret, despite being open socially.

Thiel would become fixated on “the Gawker problem,” Holiday’s book makes clear. How can a website publish anything it wants?

Eventually, Thiel met a young, ambitious Australian Oxford University-educated lawyer who proposed to sue Gawker Media in a bid to shut it down. The idea was to set up a team to identify lawsuits to file against the company. Their plan set a timeline of three to five years and a price tag of $10 million.

The intermediary, referred to as “Mr. A” in Holiday’s book but identified as Aron D’Souza by BuzzFeed News, settled on a Los Angeles-based attorney named Charles Harder to lead the effort.

“I have been charged to take down a major media outlet by a group of wealthy individuals who will fund causes of action. Would you be interested?” D’Souza asked Harder, according to Holiday’s book.

The answer was yes, and the plan unfolded like clockwork.

Once Gawker published the Hogan sex tape and Hogan decided to sue, Harder reached out to Hogan’s team.

The Gawker team didn’t realize the extent of the conspiracy until the trial was over. The devastating verdict was compounded by Florida law that requires the posting of the judgment pending appeal. Without $140 million on hand, Gawker’s hands were tied. Settlement talks began, and terms were accepted in November 2016.

Gawker was no more.

Thiel’s role in the case wasn’t made public after Thiel gave a speech in support of Donald Trump at the Republican National Convention in the summer of 2016. In an op-ed in the New York Times, Thiel said he funded the Hogan lawsuit to deter publishers from violating people’s privacy. “A story that violates privacy and serves no public interest should never be published,” Thiel wrote.

The case catapulted Harder to the top echelon of media-suing lawyers. Before, Harder had worked in Beverly Hills representing celebrities in right-of-publicity cases. Now, Harder contributes to President Donald Trump’s legal team. He has represented Trump in several media cases, including over stories about Trump’s hair and Melania Trump’s modeling past. Harder also threatened to sue to stop publication of journalist Michael Wolff’s book “Fire and Fury.”

Harder also supports Trump’s troubling views on U.S. libel laws, saying he disagrees with the Supreme Court’s press-protective framework in New York Times v. Sullivan, the landmark libel decision that requires public figures to prove “actual malice” in order to win libel lawsuits.

“I think the actual malice standard is too stringent,” Harder told the Hollywood Reporter.

Harder’s law-firm partner, Douglas Mirell, recently severed ties with him, telling the Hollywood Reporter in February that Harder’s caseload “seemed irreconcilable with my core commitment to the defense of the First Amendment.”

Harder had a different view.

“I’m anything but the enemy of a free press. I believe very strongly in a free press. But I don’t believe in a reckless press. The First Amendment isn’t unlimited.”

In Holiday’s book, Thiel is the protagonist. “He felt the world would be better if freed of a certain menace and he set out to change it, he conspired to change it, well within the letter and the spirit of the law,” Holiday wrote.

“What are you really mad about? That a man, when attacked by a media outlet, pursued legal means of recourse in the justice system?”

Jason M. Shepard, Ph.D., is chair of the Department of Communications at California State University, Fullerton. His primary research expertise is in media law, and he teaches courses in journalism, and media law, history and ethics. Contact him at jshepard@fullerton.edu or on Twitter at @jasonmshepard.

Jason M. Shepard, Ph.D.

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