A Pinellas county Florida suit by Terry 'Hulk Hogan' Bollea against Gawker Media and two private individuals, Heather and Bubba "the Love Sponge" Clem, is part of a storm of misfortune that is placing Nick Denton's continued control of Gawker Media in jeopardy. The lawsuit relates to Gawker's publication of a sex tape where Bollea fucks Heather Clem. The tape also features Bubba "the Love Sponge Clem" giving his blessing for the coital act between Bollea and his ex-wife Heather. The Hulkster is seeking $100 million in damages against Gawker Media for their role in the publication of this sex tape. Gawker posted the tape on October 4th 2012 and an injunction was issued in April 2013. As of the time of this reporting the original post features a link that they purport still hosts the video though it no longer does.

Gawker Media founder Nick Denton in a recent post laments the effect any judgement in Hogan's favor will have on have on his enterprise's "journalistic freedom" while also noting that most similar cases in fiat courts tend to reach settlement outside of a court room. Denton however offers:

I should make it clear: we would have settled too, in the interest of fighting another day, if Hogan’s demands were reasonable and the story flawed in any way. But now that the trial is on, we intend to fight it as far as we need to and we can.

This is a notably different line than the line Gawker would take during the fappening when a number of celebrities had their nude photos traded on the internet. During the fappening the party line across all Gawker Media properties was that this was a horrible violation of the various celebrities consent and their expectations of privacy. This is absolute rank hypocrisy when to this day Nick Denton defends the publication of a surreptitiously taken video of Hulk Hogan as somehow speaking truth to power. The only great material difference between Gawker's lines on the fappening and their publication of Bollea's tape is that while photos during the fappening were released in a decentralized manner, Gawker got to publish the Hulk Hogan sex tape first. While the Hulkster had consented to be a bull for the Clem's cuckolding he clearly did not want video of his indulgence in this activity published.

Other recent turmoil has occurred this past year though and had a not inconsequential impact on Gawker's revenue sources. A revolt in the video gaming community against perceived ethical lapses at Gawker Media property Kotaku along with further dissatisfaction triggered by the response of other Gawker Media writers has triggered "seven figure" advertising revenue losses and Nick Denton stepping down from the Gawker Media presidency in favor of a committee though he retains financial control of the enterprise. Further Gawker Media writers voted to unionize and though no contract has been agreed to nor primary demands highlighted, there is speculation that the move is in reaction to the bloody nose Gawker Media received over the gamer outrage which previously injured their advertising revenue and a desire on the part of writers for greater job security assurances. Gawker Media's planned editorial budget for 2015 is $15 million.

It seems unlikely that Gawker Media's conflict with the Hulkster is actually the single straw that is breaking Nick Denton's hold over Gawker Media though he is using it as a pretext for potentially offloading equity on to investors. In this he would be using the pretext of paying any kind of award issued to Bollea as well as continuing legal fees from appeals as an expense the enterprise would not otherwise be able to bear. This would be not all that unlike the way Denton used the GamerGate outrage as a pretext to relieve himself of many of the managerial responsibilities he had held for so long as Gawker Media's Chief executive and sole investor. This latest development merely reads as Nick Denton being tired of financially backstopping Gawker Media on his own.

Nothing is more natural than early investors bearing incredible risk only to parcel out their equity to more conservative investors later as their venture reaches maturity. A serious question here is whether Gawker Media represents a mature enterprise with stable profit potential into the future or a ticking time bomb with further liabilities due to its submission to fiat courts and its impending labor contract negotiations which could tarnish Gawker Media's image in its core leftist audience or commit the enterprise to adhere to unsustainable guarantees of writer income and employment stability.