Not pleasant to have a 'billionaire on your tail'

Silicon Valley billionaire Peter Thiel (above) spent about $13.6 million to help wrestling star Hulk Hogan sue website Gawker into submission. British expatriate Nick Denton founded the now defunct Gawker in the United States - a gossip site that bla
British expatriate Nick Denton founded the now defunct Gawker in the United States - a gossip site that blazed a gossipy trail through the New York media scene with a zippy blend of snark and salaciousness that skewered the rich, pompous and entitled, enraging and entertaining in equal measures.PHOTO: REUTERS
Silicon Valley billionaire Peter Thiel (above) spent about $13.6 million to help wrestling star Hulk Hogan sue website Gawker into submission. British expatriate Nick Denton founded the now defunct Gawker in the United States - a gossip site that bla
Silicon Valley billionaire Peter Thiel (above) spent about $13.6 million to help wrestling star Hulk Hogan sue website Gawker into submission.PHOTO: AGENCE FRANCE-PRESSE

It enraged, it entertained - then trailblazing gossip site Gawker was wrestled into bankruptcy. Over lobster bisque, its founder Nick Denton tells Matthew Garrahan about the fallout from outing a 'tech lord' and the backlash against too much truth.

Nick Denton was on the verge of tears. Gawker Media Group, the company he founded 14 years ago, was about to be sold in a bankruptcy auction, and staff had gathered last month at its cavernous Manhattan headquarters to drink beer, eat pizza and bid farewell to its independence. Mr Denton said a few words but briefly choked up when the company's in-house lawyer Heather Dietrick thanked him for believing "that people should be allowed to speak freely and openly and say what they think".

Since 2004, the reporters and editors on Gawker's websites said what they thought - and then some. As traditional media firms went into decline, undone by the power, reach and immediacy of the Internet, its eponymous flagship site blazed a gossipy trail through the New York media scene with a zippy blend of snark and salaciousness that skewered the rich, pompous and entitled, enraging and entertaining in equal measures.

Presiding over it all was Mr Denton, a British expatriate who once covered banking for The Financial Times. He hired young people to write for young people and encouraged them to think of Gawker "as an island", separate from the rest of the media. Gawker was the first to reveal that Mr Rob Ford, the late mayor of Toronto, was a crack cocaine user, a scoop that caused a scandal in Canada.

The revelations by Deadspin, Gawker's sports site, that college sports star Manti Te'o had been "catfished" - duped into having a long- running online relationship with a woman who didn't exist - was also widely followed by other news outlets. Gizmodo, Gawker's tech site, also earned the wrath of Apple (and a visit from the police) when it paid a source US$5,000 for a prototype iPhone 4 discovered in a Silicon Valley bar, apparently left there accidentally by an Apple engineer.

The scandals, stories and scoops turned Gawker into the embodiment of the prize and the peril of the digital media age.

And then, this year, it all came to an end. The catalyst was Gawker's 2012 publication of a sex tape featuring Hulk Hogan, a wrestling star with a platinum blonde handlebar moustache. Silicon Valley billionaire Peter Thiel, whom Gawker outed as gay in 2007, spent about US$10 million (S$13.6 million) to help Hogan sue Gawker into submission. The jury awarded him damages of US$140 million; unable to pay, Gawker filed for bankruptcy.

Mr Denton and Mr Thiel will not be burying the hatchet soon. And yet they have much in common. They are of similar age: Mr Denton just turned 50, while Mr Thiel will be 49 in October. They are both gay, tech-obsessed European emigres (Mr Thiel is from Germany; Mr Denton from Britain) and they are both libertarians.

Days after the farewell party, media company Univision snapped up Gawker's network of websites for US$135 million - minus the Gawker.com site, which was shut down.

Media pundits wrote moving obituaries for Gawker's brand of snark- infused digital journalism, while lamenting a billionaire's power to muzzle a news operation. Mr Denton filed for personal bankruptcy.

Today, when I meet him at Sant Ambroeus, an Italian restaurant near his apartment in New York's SoHo, he immediately suggests that we move to a table outside. A waiter arrives and reels off a list of specials: it is stiflingly hot and Mr Denton and I both like the sound of the chilled lobster bisque. He chooses the salmon tartare to follow; I opt for the veal milanese. We each order a glass of Vermentino.

I ask how he is adjusting to life as a bankrupt. "I go on the subway into the office," he says, in a mid-Atlantic accent that betrays his years in the United States. "I look around at people and probably 80 per cent of them are worrying about what would happen to them if they didn't get their next pay cheque. Or they are worrying about how they are going to meet their rent in this incredibly expensive city." He puts on his sunglasses. "It helps put things into perspective."

Our lobster bisques are promptly delivered. I mention that he seems happier than when I saw him at Gawker's wake. "I can't afford to be that affected." Gawker's fate was "predestined", he says, "the end product of having made a decision early on to give writers freedom and encouragement to say what was on their minds".

That seems like a stretch when you think it was a sex tape featuring a wrestler with a tan the same colour as our soup that triggered Gawker's downfall. But Mr Denton continues, insisting that the site never shied away from covering anyone - no matter who they were. The alternative would have been "to be a media company like all the others".

COMMON BACKGROUND

He believes if it hadn't been the Hogan story, it would have been something else. "Thiel was smart to pick that story as the one to back."

So, no regrets? He says he wishes Gawker had not outed a publishing executive as gay last year (the story was swiftly removed from the site following an outcry). "But then if you second-guess all these stories, and certainly if you second-guess them at the time, then you end up writing nothing."

In a New York Times op-ed piece last month, Mr Thiel laid out his reasons for backing the Hogan case. "I will support him until his final victory," he wrote of the wrestler, adding that he would "gladly support someone else in the same position".

The appeal is likely to take at least a year to get to court, which means Mr Denton and Mr Thiel will not be burying the hatchet soon. And yet they have much in common. They are of similar age: Mr Denton just turned 50, while Mr Thiel will be 49 in October. They are both gay, tech-obsessed European emigres (Mr Thiel is from Germany; Mr Denton from Britain) and they are both libertarians.

There the similarities end, Mr Denton says. "Thiel's idea of freedom is that you can create a society that is insulated from mainstream society... and imagine your own world in which none of the old rules apply."

He is alluding to Mr Thiel's interest in seasteading - the largely theoretical creation of autonomous societies beyond the reach of meddling national governments. "My idea of free society always had more of an anarcho-syndicalist bent," he says. "If I was in Barcelona during the Spanish Civil War (an anarcho-syndicalist) is probably what I would have been."

Still, he says he understands the desire to operate beyond the restrictions of normal society, saying such thinking is common in start-up culture. He points to Uber, the ride- sharing app, to underline the point.

When its founders set out to launch a product that would up-end the personal transportation industry, they had to protect their vision from external doubters or naysayers. "You need to be insulated from the critics if you're going to persuade people to join you, believe in you, invest in you."

Great companies are often based on a single idea, he continues. "And if someone questions that idea, it can undermine the support within the organisation for that idea."

This, he says, explains Mr Thiel's animosity towards Gawker. Valleywag, a Denton-owned tech site that was eventually folded into Gawker.com, used to cover Silicon Valley with a critical eye and was a constant thorn in the side of its community of companies and investors - including Mr Thiel.

But hang on, I say. Mr Thiel wrote in his NYT op-ed piece that his beef with you stemmed from your site outing him as gay and...

"He's said different things at different times," Mr Denton says, interrupting me.

Mr Thiel wrote that he had begun coming out to people he knew and had planned to continue "on my own terms" when Gawker "violated my privacy and cashed in on it". He also wrote it was "ridiculous to claim journalism requires indiscriminate access to people's sex lives".

Does Mr Denton disagree? He deflects the question. "The only time he's actually talked at length about Valleywag was when he said it was bad for the Valley. He said it was a terrorist organisation. What started him off were business stories - stories about his funds, stories about tensions between him and Michael Moritz (a rival Silicon Valley investor). It was convenient for him to focus on the outing."

(Mr Thiel clearly has a different view, so after lunch I contact him. His spokesman says he has nothing to add beyond what he wrote in the NYT piece.)

We have finished our soup and our main courses arrive. Mr Denton's salmon is appetiser-sized, whereas my veal milanese is enormous, spilling over a much larger plate. As we tuck in, I ask how his father reacted to his current predicament. He does not respond: the great proponent of "radical transparency" at his company, who once told his staff to "live what we preach", is momentarily lost for words. "He did draw a connection between family secrets and my desire to have all things transparent," he says eventually. He won't be drawn on what those secrets are.

Mr Denton was raised in Hampstead and studied philosophy, politics and economics at Oxford before landing a job at Economist Books. He later covered banking for the FT and then the Internet in its early days, convincing the newspaper to send him to Silicon Valley in 1997. When he first arrived in San Francisco, he went to the South Park district. "Wired magazine had dubbed it the epicentre of the Internet," he says. "I didn't even drop off my suitcase. I was so excited."

He was there for only a year. He announced his FT departure in his final piece for the paper, about LinkExchange, which arranged the bartering of advertising space between publishers. The piece ended with a flourish: "The Silicon Valley stories may be airbrushed," he wrote. "But, like so many others, I want to believe them."

He started two companies: Moreover Technologies and First Tuesday, both of which he sold, earning him millions of dollars. "I knew you needed money to make things," he said. Some of his profits were invested in Gawker.

I return to his family and wonder what they make of his career choices. His father is an economist whose "big cause was federal Europe". Not a great year for him, then. What does his father think of Gawker? "He advised me to sell about one year in."

This was about 2004. Big media companies were sniffing around Gawker at the time: Mr Denton says Mr Rupert Murdoch's News Corp approached him. "I was so committed to making an independent media company that I didn't even look at it. It's the only digital media company that ever got this big without putting in outside money."

STAYING INDEPENDENT

Gawker's peers, such as Business Insider, Vice Media and BuzzFeed, were either acquired or took substantial investment from older, more established media firms. Gawker might have been better- equipped to fend off the Hogan suit if it was part of a larger media company, but Mr Denton does not regret preserving Gawker's independence. "We made our bet and the bet was on readers rather than investors. If you entertain and inform readers of your own conversation with them, then everything else will follow. That was the strategy. It worked pretty well for a long time."

Hogan and Mr Thiel are not the only enemies he has made. Many of them are in Silicon Valley. He is being sued by the Daily Mail's parent company and by Mr Shiva Ayyadurai, who claims to have invented e-mail (a Gawker story said the true inventor was Mr Ray Tomlinson), among several others.

Mr Denton calls Mr Thiel and his peers "the tech lords", which he says is an appropriate description "for the feudalistic society we're moving towards". There's a kind of "fragility" about them, he says. "If you're worth tens of billions of dollars, how... insecure can you be? You can buy anything you want... except, sometimes, the respect you've always felt you lacked; the respect for your pure brilliance."

Only Mr Jeff Bezos of Amazon sounded a critical note amid the prevailing Silicon Valley view that Gawker was deserving of its fate. "I think he was the only one that really broke ranks. He said if you want to do anything in this world, you have to develop a skin thick enough to handle a bit of criticism."

I have polished off my veal but Mr Denton is taking his time eating his small plate of salmon tartare. When he finishes, we order coffee. It occurs to me that while we have been talking he has given no indication that the events of the past couple of months have unnerved or disturbed him. "Everyone keeps expecting me to get angry," he says. "I find it hard to get angry."

He mentions William Irvine's analysis of stoicism in the book, A Guide To The Good Life: The Ancient Art Of Stoic Joy. "It had some impact." Mr Denton's life partner, Derrence, "is something of a philosopher too", he adds.

Is he concerned that Mr Thiel will never let go? "I'm not going to guess his thinking. People are scared of him, and they should be." He invited Mr Thiel to a public debate on the Internet and the media, once the billionaire's involvement in the Hogan suit was revealed, but never heard back from him. "I didn't seriously expect him to respond."

I wonder what he will do next.

The money paid by Univision is being held in escrow pending an appeal of the Florida verdict, so unless he overturns it in court, Mr Denton won't receive a penny from the sale of the company he founded. "I assume I will be the professional litigant for a while."

Is he finished with media? "Since at least 2012, I've been rather more interested in Internet comments, forums, discussions, collaborative journalism," he says.

He may pursue something in that space, he adds. "I might do some writing." He thinks for a moment. "I'd like to write about the information wars. The Internet as truth machine. Too much truth and the backlash against that."

He has plenty of first-hand experience to draw on, after all.

"It's not particularly pleasant to have a highly motivated billionaire on your tail," Mr Denton says. "But there are many worse things in life."

FINANCIAL TIMES

•Matthew Garrahan is the FT's global media editor.

A version of this article appeared in the print edition of The Sunday Times on September 11, 2016, with the headline 'Not pleasant to have a 'billionaire on your tail''. Print Edition | Subscribe