Valnet Sues TheWrap for Libel Over Investigative Article About ‘Sweatshop’ Conditions at Entertainment Sites

Valnet, the digital media company that owns Screen Rant, Collider, CBR and MovieWeb, has sued TheWrap for $64.5 million in damages over an investigative article about the owner’s past ties to porn sites and “sweatshop” working conditions for its writers.

The Canadian company claims that the March 20 article “Valnet Blues: How Online Porn Pioneer Hassan Youssef Built a Digital Media ‘Sweatshop’” libeled the company and its CEO Hassan Youssef and engaged in unfair competition by harming a rival business, citing itself as a competitor to TheWrap.

The article, by senior reporter and named defendant Umberto Gonzalez, cites 15 current and former contributors who said Valnet routinely exploits writers, replaces them with cheap contractors and blacklists any who complain. One freelancer, Daniel Quintiliano, has filed a lawsuit claiming oppressive work conditions, and is seeking to establish a class action. Quintiliano’s lawsuit alleges that Valnet fails to pay minimum wage, overtime, provide meal or rest breaks and reimburse business expenses.

The article cites among former contributors a Collider writer who said the site maintains “a content mill, borderline like almost sweatshop-level” where hundreds of writers are “constantly being pushed to write more, to do it quicker,” while editors face “pretty high level of quotas” despite being understaffed. 

The article also cited and published a list of more than 400 “2025 Blacklisted Freelancers,” as the document is titled, blacklisting writers who have criticized Valnet or for conduct such as “creating drama.”

Robert Chapman, counsel for TheWrap, issued this statement, noting that Valnet has also sued the company in Canada:

“Valnet Inc. and Hassan Youseff have now filed two inconsistent, contradictory and meritless lawsuits,” he stated. “In one lawsuit, they claim they were harmed because TheWrap told the truth about them. In the other lawsuit, based upon the identical article, they claim they were harmed because TheWrap did NOT tell the truth about them. In one lawsuit they sued the reporter, Umberto Gonzalez, claiming he caused harm, and in the other lawsuit Mr. Gonzalez is not named as a defendant at all. Fortunately, there are judges and juries who will sort out these blatant inconsistencies and reject these claims.”

The lawsuit, filed April 25 in a Delaware federal court, says the article damaged the reputations of Valnet and Youssef, also a plaintiff, with inaccuracies and malicious intent that caused actual and anticipated financial losses.

The article has also caused Youssef “tremendous emotional distress, affecting (among other things) his mood, temperament and his ability to sleep,” the lawsuit said, additionally claiming that TheWrap “exploited Valnet’s copyrighted photographs — without permission or justification — and included them as part of its smear job against Plaintiffs.” (The image used for the original investigative report can be viewed above.)

The lawsuit seeks at least $30 million for Valnet and $1.5 million for Youssef for libel; and another $30 million for Valnet for unfair business practices, claiming TheWrap intended to harm Valnet for its own business gain. The suit suggests another $3 million in punitive damages and seeks an injunction assuring the article no longer be published and a corrective statement is issued.

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