Incorrect, that's his sub-excuse. The actual reason is because of Valleywag reporting on e.g. his embarrassing failure of a hedge fund.

Please don't post drive-by insinuations to HN. If you know something, back it up. But please don't lower the quality of discourse here by making things up.

Failure of a hedge fund during the worldwide financial crash, out of which he started two new investment entities (Thiel Capital and Mithril) which are alive and well.

I can't understand why people are so upset about a third party paying legal expenses... what do you think the ACLU, EFF, and tons of other organizations and private citizens (either in individual or collective form) do? A jury (impartial to Thiel and unaware of his involvement) found Gawker and Nick Denton personally guilty. Denton himself is worth over $100 million (Gawker itself was valued according to reports to the court at $80 million, so he has plenty of assets outside Gawker), so this isn't a story of a big financier ganging up on a "little guy" that people are trying to make it out to be.

Source?