New York on Gawker Media: Nick Denton Is Rich

We’ve scanned New York’s long profile of Gawker Media and CEO Nick Denton. It’s a nice piece, chiefly of interest to the people who work at and read Gawker. Of relevance to others: Insight into the business.

Conventional wisdom about Gawker Media is that Denton hires young writers, works them like dogs, pays them like serfs, and makes a handsome profit. New York tweaks some of those assumptions:

• Gawker writers may get paid a living wage (for writers): Writer Emily Gould says she makes $55,000 a year.

• Denton may be moving his writers from pay-per-post compensation to pay-per-traffic compensation. This is believable — and for working hacks, a depressing glimpse at the future.

• Denton isn’t just wealthy – he’s Croesus. Here’s where the story falls apart for us: New York makes its own “back-of-the-envelope guess” and concludes that Gawker may make $10 to $12 million in profit.  But we think the company’s annual revenue probably tops out around $12 million or so.  Given that Gawker has around 100 or so people working at 14 blogs, it’s hard to imagine that’s it’s not shelling out half of that in payroll alone. That doesn’t make Denton a pauper — we think it’d be reasonable for him to get 10x revenue and sell Gawker Media for $100 million. But it still wouldn’t put him in New York owner Bruce Wasserstein‘s league.

Related: Gawker’s Denton To NY Mag: Bilious? Me?