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Peter Thiel is an extremely succesful Silicon Valley billionaire, hedge fund manager, and co-founder of PayPal. That’s what the public knew about him back in 2007. But then Gawker wrote an article titled “Peter Thiel Is Totally Gay, People.” As you might have guessed from the catchy title, the author outed Thiel, who until that moment had been a closeted homosexual.The article is still live today and has been viewed 117K+ times.
Although author Owen Thomas didn’t include any evidence, direct quotes, sources, or even a little sentence about how it was speculation, the article caused Peter Thiel to come out of the closet.
So why are we talking about this article almost ten years later? Because today the New York Times published an article revealing that Peter Thiel is allegedly the investor who backed Hulk Hogan’s lawsuit against Gawker Media and their founder Nick Denton.
Today’s NY Times article comes just one day after Nick Denton told the NY Times that he believed someone in Silicon Valley had footed the bill for the lawsuit.
“My own personal hunch is that it’s linked to Silicon Valley, but that’s nothing really more than a hunch. If you’re a billionaire and you don’t like the coverage of you, and you don’t particularly want to embroil yourself any further in a public scandal, it’s a pretty smart, rational thing to fund other legal cases.”
The story is becoming more and more juicy. But before we can look ahead, let’s take a look at the connections between Peter Thiel, Gawker, and Hulk Hogan.
Peter Thiel
Peter Thiel is a German-American entrepreneur worth a ton of money right now. He graduated from Stanford in 1989 and then graduated from Stanford Laws School in 1992. He now lives in San Francisco.
PayPal
Peter’s first brilliant business move was co-founding PayPal with Max Levchin. At the time, PayPal was a somewhat succesful online payment service. But it was only once they merged with X.com, an online financial services and email payment company owned by Elon Musk, that it really started taking off.
PayPal was so successful that it went public in 2002 and then sold to eBay for $1.2 billion. Thiel’s stake in the company was worth over $3 million.
Facebook
He was also the first outside investor in Facebook, buying in as an angel investor for $500K at 10% of the company. But if you’ve seen The Social Network, you actually kind of already knew that.
Facebook is now valued as $190 billion, so while we can’t really do that math, we know that if he wanted to fund a lawsuit he probably could.
Gawker Media
Gawker Media is a network of websites that cover a variety of topics and subjects. Although it now has over eight different larger sites, it owns many more smaller sites that fit within the larger sites’ umbrellas.
Their tag line is “Today’s gossip is tomorrow’s news.” And to a point, they’re not too far off. Gawker has broken tons of stories that many other websites and news outlets wouldn’t have touched. Famously, they were responsible for the shuttering of many of Reddit’s more notorious (and illegal) subreddits that published illegally obtained photos of underage women, upskirts, and more.
They’ve done a lot more, but the point is that along the way they’ve also made a ton of enemies. But that was what made Gawker so awesome–they didn’t give a you know what. Their brash approach and unfiltered content meant that they would publish today and worry about the consequences tomorrow.
For Gawker, Silicon Valley has always been a treasure trove of content for them. Its concentration of riches, technology, power, and the sometimes foolish people who had all three meant that there was always some juicy story to write.
From Nick Denton,
“We write stories about powerful people in New York, but there are plenty of outlets writing stories about powerful people in New York. We write stories about powerful people in LA, but there are plenty of outlets writing stories about powerful people in LA. What’s unique about Gawker is that we’re an internet publication and the tech industry is of particular interest to us. There are powerful people in Silicon Valley and the power of Silicon Valley is a relatively new phenomenon.”
“Peter Thiel Is Totally Gay, People”
One of those Gawker articles was written by Owen Thomas, now employed by SFGate, and is titled “Peter Thiel Is Totally Gay, People.” As we mentioned above, the story is still live. Here’s the intro:
By now, you’ve likely heard how Peter Thiel parlayed a $500,000 investment in Facebook to a stake now worth $750 million. There’s been a crush of coverage on his $220 million Founders Fund, which may well change the way entrepreneurs get paid in the Valley. We know about his mansion (he rents it — clever!), his butler, his early-morning jogs. But what no one ever says out loud: Thiel is gay.
The story outs Peter Thiel as being gay, even though his private life was something that Peter had tried very hard to keep private. Yes, Peter came out afterwards as gay, but it probably wasn’t something that he wanted to do. Although Gawker always hid behind expensive lawyers, their reliance on what was legal and what wasn’t eventually came back to bite them in the butt.
In 2009, Peter would be quoted as saying that Gawker was “the Silicon Valley equivalent of Al Qaeda” with the “psychology of a terrorist.”
Hulk Hogan vs. Gawker Media
Without a doubt, the Bollea vs Gawker lawsuit is the biggest story for online publishers like ourselves. Even though we’re not uploading and hosting illegally obtained sex tapes like Gawker, the outcome of cases like this are very important moving forward in what is and isn’t illegal.
So for those of you who don’t know the full story, we’ll lay it out for you nice and quick.
Hulk Hogan’s Sex Tape
Heather Clem is the ex-wife of Bubba The Love Sponge, a radio personality, but you
Terry Bollea (aka Hulk Hogan) had a friend, Bubba the Love Sponge, who was married to model Heather Clem. Bubba and Heather had an open relationship, which sometimes meant that Heather would sleep with some of Bubba’s more famous friends. During one of those times, Heather and Terry had sex in 2006.
It’s unknown whether or not Hulk Hogan knew their tryst was being filmed (Bubba says Hulk knew, Hulk testified under oath that he didn’t), but the important thing is that there was a tape. That tape was then shopped to various publications for sale. Gawker.com then published an excerpt of the tape for everyone to see in 2012.
A circuit court ordered Gawker to remove the video, but the website refused because they believed that order was “risible and contemptuous of centuries of First Amendment jurisprudence.” Eventually they did pull the video, but kept the story and linked to another website that still had the video.
Bollea vs Gawker
Cut to 2016, when Terry Gene Bollea sued Gawker Media for invasion of privacy, infringement of personality rights, and intentional infliction of emotional distress. After a very-public trial, the jury decided to deliver a verdict in favor of Hulk, awarding him $115 million in damages.
And it’s here that things begin to get interesting.
By all accounts, Hulk’s finances weren’t all that great. So the fact that he was able to put together enough cash to take this case to court meant that he could have had a third-party financier. Gawker estimates that they’ve spent almost $10 million on the case, so Hulk himself must have had to dig deep.
So if Hulk was so poor, why would his lawyers look to remove Gawker’s insurance from the lawsuit? It stand to reason that Gawker’s insurance would have deeper pockets than Gawker. From the NY Times article today:
Mr. Hogan’s legal team… abruptly dropped one of the claims — for “negligent infliction of emotional distress” — from its case. That claim had a particularly special meaning: It was the one claim that required Gawker’s insurance company to pay for its defense as well as potential payouts in the case of a settlement. (That provision of Gawker’s insurance policy became public after the insurance company, Nautilus, sued Gawker to try to limit payment for defense.)
Several legal experts said that it was particularly unusual for a plaintiff using a lawyer being paid on a contingency basis not only to turn down settlement offers (several sizable settlements were proffered by Gawker) but also to pursue a strategy that prevented an insurance company from being able to contribute to a settlement.
Strange, indeed.
Peter Thiel vs. Gawker
So today we learned from Forbes, and then the New York Times, that “According to people familiar with the situation who agreed to speak on condition of anonymity, Thiel, a cofounder and partner at Founders Fund, has played a lead role in bankrolling the cases Terry Bollea, a.k.a. Hogan, brought against New York-based Gawker.”
It’s unknown how the two men met, or even how much money Thiel stands to gain from winning the lawsuit, but “third-party litigation” is both legal and a growing trend in the American court system.
**This story is developing. Refresh page for updates.**