Michael Jackson may be turning point for TMZ

This is a critical moment for TMZ, the celebrity website overseen by lawyer and former KCBS-TV Channel 2 reporter Harvey Levin.

The 4-year-old website last week broke its biggest story yet -- the death of Michael Jackson -- following up with scoops and rumors about the singer’s alleged drug habit, audio of the initial 911 call from his rented mansion, and news of what it suggested was a brewing fight over custody of his children.

The performance was the most impressive in a long line of TMZ triumphs. It has broken stories that have driven Hollywood news cycles for days, including Mel Gibson’s anti-Semitic rant in 2006, the angry and abusive voice mail Alec Baldwin left in 2007 for his 11-year-old daughter (the “30 Rock” star responded by calling Levin “a human tumor”), and earlier this year, the audiotape of Christian Bale’s profanity-laced tirade on the “Terminator Salvation” film set.

Its reputation for breaking big celebrity news has made TMZ.com an online sensation, with an estimated monthly readership of 4.1 million, according to Web measurement service Quantcast.com, although it has spiked much higher during busy news periods.

“TMZ has become a wire service for the entertainment business,” boasted Jim Paratore, a longtime Warner Bros. executive who partnered with Levin to launch the website in 2005 and the television show two years later.

But the Jackson drama puts the spotlight on TMZ at a delicate time. Its tactics have stoked growing outrage among publicists and government officials. Its tabloid sensibilities have made some other news organizations reluctant to cite its reporting -- including CNN, a sister company, which relied on the Los Angeles Times’ reporting rather than TMZ’s on the day of Jackson’s death. Some advertisers remain hesitant to pitch their products on the site and the TV series. And TMZ has proven much better at generating controversy than cash for its corporate parent, Time Warner.

Nonetheless, TMZ officials seemed pleased that the Jackson scoop had taken the site to a higher level of recognition. On Friday, Levin led off the episode by bragging that the site had broken the story. And in some quarters, the scoop was seen as a triumph of new media over old. The website LA Observed praised the swiftness of TMZ’s scoop and said that its accuracy displayed “the best of old-media values.” Ratings for the television show are growing, and the program does especially well among the coveted, hard-to-reach 18-to-34-year-old demographic.

TMZ is a joint creation of AOL and Telepictures, two divisions of Time Warner, whose magazine division publishes People, Time, Sports Illustrated, Entertainment Weekly and other old-media titles. With annual costs of less than $8 million, TMZ.com delivers dependable if modest profits, according to people familiar with its finances, who spoke on condition of anonymity because TMZ officials will not discuss the numbers publicly.

The TV show also produces a small profit, those sources said. Like nearly all news outlets, however, TMZ has been hit hard by the recession.

The site’s hard-charging reporting tactics and impressive record of accuracy have drawn stunned admiration from rivals but also angry denunciations from actors, public relations representatives and government agencies.

TMZ earlier this year posted what looked like an evidence photo of pop singer Rihanna’s battered face after a fight with boyfriend Chris Brown. Outraged Los Angeles Police Department officials promptly launched an investigation into the leak, which the judge at Brown’s trial last month said was possibly criminal.

“There are documents that come out that they get that frankly they never should,” said Courtney Hazlett, a columnist and celebrity correspondent for MSNBC.com. “The Rihanna photo is Exhibit 1A.”

Lurking behind much of the suspicion is a sense that TMZ is flouting not so much the law as journalistic ethics. Rivals have consistently accused Levin and company of paying for information. Most news-gathering organizations do not allow reporters and editors to pay sources for tips or quotes, although it has become a common practice for magazines and TV news shows to pay tens of thousands of dollars for exclusive access to celebrity weddings or baby pictures, often with interviews included as part of the arrangements.

“Why would somebody who works in the hospital give them the information? Out of the goodness of their heart?” said Rob Silverstein, executive producer of NBC Universal’s “Access Hollywood,” referring to the tip that led to the Jackson report. However, he conceded that he did not have “absolute proof” that TMZ was paying for information.

TMZ officials in the past have dismissed the skepticism. “People bring us stories because they want to see them get out,” Paratore said in a recent interview. But Saturday, Levin, who repeatedly refused to be interviewed for this report, was quoted in the New York Times as saying the site pays “tip fees” that lead to stories, but not for stories outright, without explaining the distinction.

Officials at Time Warner, whose mainstream news organizations decline to pay directly for information, say they let Levin run the show at TMZ and do not interfere.

What may make it even tougher for the website and the TV show to win over advertisers is TMZ’s overall association with sensationalism and sleaze. During slow news times, the website thrives on “where are they now?” star updates and peekaboo photos of starlets’ nudity. The TV show takes an even breezier approach toward celebrity ridicule; an episode this week led with an item making fun of Aretha Franklin’s weight.

Some major advertisers such as Procter & Gamble have resisted advertising on TMZ, citing a desire to “maintain their integrity,” said Tom Weeks, senior vice president at Starcom Entertainment, a division of advertising giant Starcom. But other companies have expressed no reservations about the show, he added.

Whether the show can last in the cutthroat world of TV syndication is an open question and one that may be crucial to deciding the long-term fate of the TMZ brand. But supporters of the show say signs are positive, noting that TMZ is the only TV celebrity news magazine that is expanding its audience.

“We’re very pleased with the ratings,” said Frank Cicha, senior vice president of programming for the Fox Station Group, which airs the show on 17 stations, including KTTV-Channel 11 in Los Angeles. “A lot of syndicated shows skew older. This one from the get-go was strong with the young demographics.

“It was abrasive to some viewers at first, but it was absolutely different,” Cicha added. “Viewers have grown to like it.” The Fox stations will air the show for at least two more years, he said.

Paratore draws a sharp distinction between TMZ television and rival entertainment news magazine shows such as CBS Paramount’s juggernaut “Entertainment Tonight” or NBC Universal’s “Access Hollywood.”

“They are all part of the agenda of the studios’ marketing efforts to promote their entertainment,” he said. “Their coverage is determined by the publicists. And we are not part of the publicists’ agenda. We’re not trying to get invited on the next junket or get a spot on the red carpet.”

The site’s biggest asset, as even its detractors admit, is Levin, known as much for his consummate showmanship as for his tireless work habits. In fact, Levin and his website are often spoken of as one and the same. Photographed courtside at Lakers games and the subject of lengthy magazine interviews, he has himself become a celebrity, although not one who is ridiculed on TMZ.

“Harvey is the ringmaster,” said Starcom’s Weeks.

Already, his success has rivals reaching for grand allusions to try to make sense of it.

“Harvey Levin is Oz,” said MSNBC’s Hazlett. “There’s something that’s happening behind the curtain there. It only stands to reason that untraditional things are happening.”

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Times staff writers Greg Braxton and Kate Aurthur contributed to this report.