The Gossip Machine, Churning Out Cash

David Mcnew/Getty Images — Lindsay Lohan's arrival at the courthouse in Beverly Hills, Calif., last July was a feast for the celebrity media.

By JIM RUTENBERG
NYT

LOS ANGELES — In late July 2010, the Southampton, N.Y., police charged Michael Lohan, the father of the actress Lindsay Lohan, with physically harassing his fiancée. When the news hit on the gossip Web site TMZ, Mr. Lohan was at the Sunset Tower in Los Angeles, where he had been on the interview circuit discussing his daughter’s imprisonment stemming from drunken-driving charges.

Mr. Lohan was hardly morose about his own legal troubles. His hotel room and the hallway outside it buzzed with giddy deal-making as he and his entourage, which included two beefy, bejeweled bodyguards, conducted business with the door open. It could all be overheard by passers-by — or, by coincidence, a New York Times reporter staying in a room across the way.

An associate of Mr. Lohan’s ran through the plan: ignite a bidding war between TMZ and its rival Web site Radar for Mr. Lohan’s side of the story and for embarrassing recordings he claimed to have of his fiancée, Kate Major. “What you have to do is monetize this,” the associate said, adding, “What you want is to make them pay for that exclusivity.”

Sure enough, Radar went on to post four “exclusives” quoting Mr. Lohan denying the charges and threatening to release tapes of Ms. Major.

(Original here.)