Gawker In a “Bad Place” According to Own Financial Expert, Plus a Hogan Trial Update
What’s up guys? I had a slow Friday, but after the insane Thursday we had, I think that was OK. I’m going to post a good amount today, though. It’s the 4th of July here in the United States, as well, and I might write something about that later in the day. Before I get o that, there’s a lot to talk about, starting with Gawker and our old friend Hulk Hogan. The trial date has been pushed back to a yet-to-be-determined time, but there was some bad news from Gawker’s financial expert. Rough times are coming for the company due to bulging expenses. That’s not all…
They’ve also had to reach out for a $15 million “rescue package” from Silicon Valley Bank. This is one of the only times owner Nick Denton has sought outside funding according to the original New York Post report. But back to the financial expert and what he had to say about Gawker’s outlook. Revenue was up, true. The rate of expense growth was even higher (30%+), though:
“The company was growing below the [rate of growth] of other companies in the market, so it was a relatively slow-growing, not very profitable company, which is kind of a bad place to be,” said Horan at one point in a deposition in response to a question on Gawker’s finances.
“It’s OK to be growing 50 percent a year and not making any money. It’s OK to be making 40 percent profit margin and growing real slowly. But it is kind of tough to be slow-growing and not very profitable,” Horan continued.
The expert witness, hired by Denton and Gawker, may have been trying to temper the expectations of Hogan (real name: Terry Gene Bollea), who has a long history of lawsuits against well-heeled opponents. But it also spotlights the thin profits that may be about to suffer another jolt.
If you look further down the piece, you can see that their traffic might be suffering as well, no matter what they may say in their public pronouncements:
But in another key barometer, traffic seems to have plateaued for the company. ComScore, one of the leading trackers of Internet traffic, showed that through May, traffic was 53 million.
While it’s up a bit from the April figure, it is down from its 12-month peak of 63 million hits in August.
What happened last August? Oh yea, that’s right: GamerGate. This is just one site’s metric, but I still like what I’m seeing there. The rest of the article is Denton whining about how the jury shouldn’t be able to hear about how his company is incorporated in the Cayman Islands, or his offices in Hungary. Typical douchebaggery. But there was one other news story I saw in relation to the Hulk Hogan lawsuit. Gawker is accusing the F.B.I. of altering evidence and participating in a cover-up:
Gawker lawyer Seth Berlin said he recently viewed the three tapes and compared them to transcripts of the tapes created while they were supposedly in FBI possession. When Berlin watched the tape later, a portion didn’t match up to the transcripts, he told the judge.
“There is something that is particularly of sensitive and of interest to us in the case and that is the portion that has been overdubbed,” he said, “So we have two CDs with two different video and for a portion of it the audio is the same.”
“I want to understand how it is that between that moment when the FBI took possession of those DVDs and when I saw those tapes…on Tuesday, that audio got changed,” Berlin said, adding that “it smells like bad fish.” When Berlin said he wasn’t trying to “impugn anybody at the FBI or in the U.S. Attorney’s Office,” the judge shot back “you are.”
Berlin then implied that Hogan may have worked with the FBI in some way.
“In my judgment Mr. Bollea has used the arms of the federal grand jury to try and suppress [evidence],” Berlin said. “I didn’t know that the FBI was in the business of doing that…”
The judge replied, “Well, I would be very surprised if that’s what’s going on here. I realize why it’s in your best interests to say something like that, but I would be very surprised to say that’s going on.”
Hogan’s lawyer, Charles Harder, told BuzzFeed News, “Gawker accused Mr. Bollea today of being ‘in cahoots’ with the FBI. Nothing could be further from the truth. The accusation is 100% false and outrageous. Gawker clearly is desperate and making up lies to try to cover up its own illegal activity.”
I don’t think that the smartest road for you guys to go down, since the Feds are known to have a long memory, but go right ahead. I certainly won’t be the one to dissuade you. We’ll keep watching this case and all the developments surrounding it. I’m going to go edit some pieces and look through some more morning news, like what’s going on with Reddit. So stay tuned for a thorough recap of all that.