A.J. Daulerio was surprised that $12,000 could fit into a single envelope. "I thought I'd need a hockey bag," he recalls, sort of kidding. It was early October, and Daulerio, the editor of the sports Web site Deadspin, had requisitioned the brick of 120 crisp hundreds to pay an anonymous source. In return, the source would hand over the voice mails from Brett Favre and photos he'd allegedly snapped of his penis and sent to Jenn Sterger, a Jets sideline reporter, during his one season with the team.

Now it's the first week of November, and Daulerio is telling me how he landed his most controversial scoop as we fly over a quilt of farmland on the way from New York to Indiana. In a few hours, he's expected in Indianapolis to participate in a panel discussion titled "Where's the Line? Sports ­Media in the Digital Age." More than any other sports journalist in years, Daulerio has been redefining where that line is, and then crashing over it. His tactics—reporting rumors, paying for news, and making Deadspin's money on stories that are really about sex, not sports—are questionable. His success is not. When he became editor of the site in July 2008, it had 700,000 readers per month. Today it has 2.3 million.

Going public with the Favre photos was originally Sterger's idea, Daulerio tells me. He was chatting with the former Maxim model one day early last year about contributing to Deadspin, "and she said something like, 'Do you want dong shots? Because I get them all the time.' I was like, 'Yeah, sure.' And she was like, 'Well, I'll get you dong shots. It's unbelievable, the stuff I get. You won't believe who is the worst at it.' And then she went into the Brett Favre story." (Through a spokesperson, Sterger declined to comment.)

At the time, she was in talks with Versus, the sports network, to co-host a new talk show, and Daulerio says she got skittish that the scandal would torpedo her budding TV career. Six months passed, during which Daulerio says he confirmed the ­Favre story with multiple sources. He also heard that Sterger had forwarded the photos and voice mails, in which Favre flirts aggressively with her, to a number of friends. So in early August, with Sterger still declining to cooperate, he posted an item ('Brett Favre Once Sent Me Cock Shots': Not a Love Story"), hoping it would entice someone to send him the files. "I was throwing up the bat signal," he says.

It worked. About two weeks later, he says, he was contacted by a man who claimed to have the goods. Daulerio told his boss, Gawker Media founder-overlord Nick Denton, that he desperately wanted the scoop and was willing to pay for it. "I said, 'I'd mortgage the site for this. This is like Monica Lewinsky's dress for Drudge,' " Daulerio recalls.

Denton agreed to fly the source to New York, and on the afternoon of October 7, Daulerio met him at his hotel. He didn't bring the twelve grand. "What if I get whacked on the head?" he says. "It's always a possibility."

He looked at the photos and listened to the voice mails. Once Daulerio was satisfied that the voice was Favre's and the penis was, well, a penis, he and the source hopped in a cab and headed downtown to Gawker's SoHo offices. Daulerio ran upstairs, got the envelope, and brought it down to the street, where the source was waiting. After counting the money, the source handed Daulerio a paper-clip-sized USB drive with the files.

Before posting the photos and voice mails, Daulerio argued with Gawker's lawyer and chief operating officer, Gaby Darbyshire, over legal exposure. "She's like, 'You're willing to go to jail for this? It's just a dong shot,' " Daulerio recalls. "And I'm like, 'It's fucking Brett Favre's cock shot.' So yeah. If Brett Favre sued or [the pictures] were subpoenaed—I don't think they'd send me to jail for that, but given the choice, sure." In the end, Daulerio agreed to sign documents assuming responsibility for protecting the source's identity.

Immediately after posting, Daulerio says he sent the URL to "an intermediary" who confirmed—Daulerio won't say how—that it was, in fact, Favre's member in the pictures. No one has sued him (yet), and Deadspin had its first mainstream-media moment.

"I did like nine television shows in two days," Daulerio recalls. "The Today show called me on a Sunday at two thirty. It was brunch time with my girlfriend and a friend, and I was half in the bag. A couple of hours and two bong hits later, I'm doing an interview on the porch. Everyone is jamming Adderall to clean the place as quickly as possible. I was trying to find pants." The story has generated 5 million page views to date—and plenty of debate about the TMZ-ization of sports journalism. "It isn't a question of whether or not he should have done the story. It's a story," says Frank Deford, who's been writing for Sports Illustrated since 1962. "But aren't there better stories to do? Do we really want to know about Brett Favre trying to get laid? Wouldn't you rather spend your time delving into the evils of college athletics, or drugs and sports?"