The Economics of Plugged Leaks

Mr. Balazs insists on privacy, discouraging cellphone pictures by guests. Employees surrender their phones during working hours and submit to “the most draconian sort of confidentiality agreements,” he said.

A recent breach at Mr. Balazs’s Standard, High Line in New York — the leak of a video of Jay Z and Solange Knowles fighting in an elevator — heightened the need for such measures. Mr. Balazs said that the employee who leaked the video was fired within 24 hours, and that he and Jay Z are considering legal action.

In this age of (slightly) renewed concern for labor issues, one wonders if TMZ’s compensation for video footage now takes into account that the leaker will surely be fired, and possibly even sued; it must be payment for services rendered, a severance package, and provide for potential legal fees, all in one (presumably very) lump sum. If it doesn’t, will anyone picket TMZ in support of its exploited leakers?