Gawker Media’s hunger for investor cash unexpectedly led to an investment by a flamboyant strongman this week. No, not Hulk Hogan.
Hogan’s the reason Gawker needs the money, and it came from none other than Victor Vekselberg, the richest man in Russia whose hobbies include collecting $100 million Faberge egges, cornering the global aluminum market, and sending mercenary squads to capture Siberian oil fields.
International Business Times bemusedly notes that Vekselberg is the sort of character who would usually find himself on the wrong end of coverage from a site like Gawker, which in fact referred to him as an “ultra-rich Soviet oligarch” in 2008.
When Esquire managed an interview with the secretive billionaire in 2013, they upped the ante by calling him “the Russian oligarch, the oligarchs’ oligarch,” boasting an $18 billion fortune, “cordial” relations with Vladimir Putin, and a cloak of media invisibility that would be envied by most men in his position.
During the Esquire interview, he wore an expensive classic watch designed to look like a cheap knockoff, and said he didn’t keep his priceless Faberge eggs in his own house because “it would just look terrible if I put some imperial eggs on my buffet.” He comes off like the Russian version of the Dos Equis guy.
Part of the reason for Vekselberg’s low profile is his keen awareness that high-profile Russian oligarchs have a habit of assuming room temperature in interesting ways. The new breed of Russian aristocrats made their billions by picking up the pieces of the broken command economy in post-Soviet Russia. It’s a career track that makes enemies, including officials on the hunt for special guest stars in theatrical corruption trials.
Vekselberg knows how to play rough. He found himself facing charges in an American court in 2014 for “using armed soldiers and corrupted Russian court proceedings to gain control of a Siberian oilfield,” as the Moscow Times put it. The subject of the suit was a Russian oil company called Yugraneft with a majority Canadian stakeholder, Norex Petroluem. The company controlled an oilfield valued at hundreds of millions of dollars. In 2001, Yugraneft experienced the sort of “hostile takeover” that involves men with AK-47 rifles, while Russian court rulings diluted Norex’s share values, making the other kind of takeover possible.
After a year of legal wrangling, the suit was dismissed on jurisdictional grounds, since while Vekselberg had a home in New York, the alleged skulduggery took place entirely in Russia. Norex Petroleum was told not to “complain about the Russian legal system to an American court.”
Vekselberg got a piece of Gawker (pending shareholder approval) through his investment company, Columbus Nova. The investment was needed for “growth initiatives,” and also because Terry Gene Bollea, a.k.a. Hulk Hogan, threatens to crush the whole operation in court.
“That case centers on a video that Gawker obtained that showed Mr. Bollea having sex with a woman who was then the wife of a friend,” explains the New York Times. “The site posted a short edited version of that video, but it was forced to take it down by Mr. Bollea, who is now suing Gawker Media and Mr. Denton for violating his privacy. He has asked a Florida state court for $100 million in damages. The trial is scheduled to begin in March.”
Gawker founder Nick Denton told Inc.com he was confident he would win the case, but “the question is how many rounds we need to go through to establish that.”
Inc. observed those rounds were “getting expensive,” obliging Denton to seek outside capital for the first time since founding the company, then rattled off a list of additional woes including the partial unionization of staff, a round of layoffs, blowback against Gawker’s “critical and, at times, personally insulting media coverage,” and an expose from a former employee who claimed the company mistreated female employees.
(For an example of the “personally insulting” style, Denton said in the interview that one reason for running the Hulk Hogan sex tape that may yet destroy his company was to debunk Hogan’s claims of sexual prowess.)
IBT notes that Columbus Nova managing director Jason Epstein will end up with a seat on Gawker’s board if the deal goes through. He is quoted by the New York Times promising, “I will have no input on the editorial, or the editorial mix. Any changes will be driven one way or another by Nick and the team.”