Why Nick Denton is confident Gawker will win its $100 million lawsuit over Hulk Hogan's sex tape

154169459Gerardo Mora / GettyImagesHulk Hogan and his attorneys who discuss the lawsuit at a press conference.

Gawker Media CEO Nick Denton is gearing up for a big fight that could cost his company $US100 million. A court filing provides some insight into how Gawker will fight it, and why Denton believes the company has only a one-in-ten chance of losing.

It started when Gawker posted an article with a video excerpt of a sex tape starring Hogan and Heather Clem, his friend’s ex-wife in 2012. A disgruntled employee of Hogan’s friend, Bubba the Love Sponge, is rumoured to have leaked the tape.

The professional wrestler is suing Gawker for invasion of privacy. The trial starts next month.

A possible loss for Denton’s company could mean that he would need to seek outside funding for the sake of Gawker’s survival, as they don’t keep $US100 million in the bank. Since its founding in 2003, the company has mostly refused VC funding, and insiders own 90% of its shares. 

“We never raised money because we fund growth from cash flow,” Denton once wrote in an email. “And the journalistic pursuit of the truth is not compatible with outside investment.”

But Denton is confident Gawker won’t have to pay a penny. As he told the Daily Beast, “The way I look at it, it’s a five in ten chance that we come through this stronger, and four in ten it’s a wash. Only one in ten bad.”

According to a court filing obtained by Business Insider, here’s how Denton plans to fight the charges: 

1. The story was newsworthy. 

Former editor-in-chief A.J. Daulerio testified that the video is a subject of ongoing public controversy. The video was taken at the time when both Clem and Hogan were married, but Hogan had previously denied the infidelity. In 2011 on the Howard Stern Show, Hogan replied “no” and cited “man law, brother” when asked if  Clem’s divorce with Bubba had been due to cheating. 

Nick DentonBloombergNick Denton

2. Hogan is a public figure. 

Hogan published an autobiography called “My Life Outside The Ring” so that he could “open up about everything in his life.” He and his entire family was in a reality tv show called “Hogan Knows Best,” where he gave producers a set of keys so they could creep into the house and film his sleeping family. He wrote, “I didn’t care if my butt was hanging out or if I had drool on my pillow.” 

3. Hogan hasn’t exactly been tight-lipped when it comes to his love life.

Hogan has engaged in continuous sexual banter on shows like “Bubba the Love Sponge Show.” He’s disclosed explicit details about his and his wife Linda’s sexual activities on Bubba’s radio program, providing the savoury specifics on how he and Linda were playing “stick shift” in the car the day before. 

4. The media had already discussed his sex life long before the tape. 

As early as seven months before the release, the VH1 Access website released an article called “Report: A Hulk Hogan Sex Tape Is Out There”. The Huffington Post, E-OnlineThe Daily CallerTWNPnews.com and many others also published similar articles. 

You can read the full court filing below.

Hulk Hogan Gawker Court Filing

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