Investigation exposes how TMZ gets the celebrity scoops

Entertainment news website TMZ has broken some of the biggest celebrity scandals, including actor Mel Gibson's anti-Semitic comments during his drunk-driving arrest, Michael Jackson's death and a phone recording capturing racial comments by former Clippers owner Donald Sterling.

The website also posted video of Baltimore Ravens' running back Ray Rice hitting his fiancé, and another in the same year of Beyonce's sister, Solange, attacking Jay-Z in an elevator.

But now, the celebrity gossip powerhouse is in the hot seat, thanks to an investigation by The New Yorker magazine.

In the article, "The Digital Dirt: How TMZ gets the videos and photos that celebrities want to hide," writer Nicholas Schmidle investigates how TMZ gets the celebrity scoops. Schmidle spoke to over a hundred employees off the record for the investigation and also had leaked TMZ emails that showed how tips flow in and operate.

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Schmidle compared the website to an intelligent agency.

"I mean they have people in the airports, they have people at the valets and restaurants. Everyone is picking up the phone at the site of a celebrity in LA... and calling TMZ all the time so they are just constantly collecting information," Schmidle told "CBS This Morning" Monday.

Schmidle said TMZ has "changed the rules of the game" in celebrity news.

"No longer are celebrities able to say, 'That story is not true, that's second hand' and dismiss it," Schmidle said. But its practices also go against those of traditional news organizations.

TMZ pays many of its tipsters - sources not employees. According to The New Yorker, TMZ paid over $100,000 for the surveillance videos of Ray Rice hitting and knocking his fiancé unconscious in a hotel elevator in 2014. The video of Solange kicking Jay-Z allegedly cost $5,000.

"If you go to the CBS website or the New York Times or the New Yorker even, and you go to the top of the website, it's not clear if someone picks up the phone how to get a tip in...," Schmidle said. "Whereas with TMZ, you get a video, and you go to the TMZ website, and right at the top it says this is the phone number, that's the email and that's where you call. And so the reputation is built up, people call and people know they're going to get paid."

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While it receives over a hundred tips every day, not all are published - among them, a 2011 video of then 15-year-old Justin Bieber improvising his song, "One Less Lonely Girl" with racial slurs.

"According to people who are familiar or close to the conversation, (founder) Harvey Levin decided on his own that he did not want to ruin Justin Bieber's life and the video did not go up," Schmidle said.

But that was in exchange for "numerous flattering Bieber-related exclusives" that ensued over the course of coming months, including a photograph of Bieber backstage during a commercial shoot, pictures of him getting a haircut, a video of him singing with his then-girlfriend Selena Gomez and more.

In a 2010 lecture, Levin said "I can't give you a rigid principle on where the line of privacy is..." and went on to discuss his struggles with privacy.

"After more than a year of working on this story on and off, I don't know where those lines are. I couldn't tell," Schmidle said.

"CBS This Morning" reached out to TMZ, but have not yet received a comment.