60 new york | august 5–18, 2019
The Rise of
Scandal
In surance in
Holly woodOne monday in june,
a team of young data
researchers gathered in the
conference room of a Bos-
ton start-up called Spotted-
Risk to talk about celebrities who’d gotten
themselves into trouble. Operations analyst
Fr anki Slattery began the meeting by tick-
ing off a couple of updates: Cuba Gooding
Jr. had been arrested for allegedly groping
a woman at a bar; soccer star Cristiano Ron-
aldo’s civil rape lawsuit had been moved to
federal court.
Other “disgrace events,” as Slattery called
them, were harder to categorize. Rapper Lil
Xan had pulled a gun on someone at a
7-Eleven over a dispute about Tupac.
“They’ve started describing the situation as
‘assault with a deadly weapon,’ ” rather than
the standard gun possession, Slattery said.
Also, Lil Xan had used the N-word. “Pardon
my ignorance,” said Mira Carbonara, Spot-
ted’s VP of commercialization. “Little what-
ever-his-name-is? Is he African-Ameri-
can?” He is not, but the ethnicity of the
victim was unknown. They agreed to log it
as a “hidden risk” for future racism.
In other news, Kim Kardashian was
going to sponsor ride shares to ferry for-
mer prisoners to job interviews. It would
be logged as a “cause,” a positive attribute,Can you indemnify against
dick pics?By Boris Kachka
PHOTOGRAPHS:PATRICK
MCMULLAN
(ALL
EXCEPT
“SHAVES
HEAD”)
TheThe CULTURE PAGES CULTURE PAGES
ago. Under the studio system, the finan-
ciers were in control—their stars’ trans-
gressions easier to cover up, their contracts
easier to tear up. True outrages like the
Fatty Arbuckle case were relatively rare,
and when they happened, the machine
smoothed things over and rolled on. But
today’s stars are the machine, command-
ing millions in endorsement deals and the
lion’s share of indie-film budgets and car-
rying billions in market value on the backs
of their reputations.
Those reputations, meanwhile, are
increasingly fragile. Ubiquitous video and
social media, supercharged by #MeToo,
have led to a proliferation of high-profile
disasters—Miramax’s implosion, Kevin
Spacey’s erasure, Roseanne without Rose-
anne—leading producers and brands to
look for new ways to mitigate the risks of
reputational collapse. Studios have hired
risk managers, dug deep into stars’ back-
grounds in search of red flags, and added
“morals clauses” to contracts. They’ve also
been asking around about insurance.
If SpottedRisk’s product takes off, it will
join a small but growing industry of dis-
grace insurers. Like other new types of
insurance (terrorism, cyberattack, active
shooter), Spotted’s disgrace innovation
re flects what we fear most in the 21st cen-
tury. In this case, it’s the persistent, grow-
ing dread that a career-ruining fall from
grace is always just a click away.things were going so well for All the
Money in the World, a big Christmas Week
release from pop auteur Ridley Scott star-
ring Mark Wahlberg and Michelle Wil-
liams. Kevin Spacey was the ace in the hole
as J. Paul Getty, the mogul who refused to
pay ransom for his kidnapped grandson,
raising the question, When you can buy
anything you want, what is the price of a
human being?
In the case of Spacey, it was at least
$10 million. On October 29, 2017, Adam
Rapp alleged that the House of Cards star
had made a sexual advance on him when
Rapp was 14. Multiple accusers came for-
ward over the next few days, and Scott and
his financiers had to make an impossible
choice: replace Spacey with another actor
or risk box-office annihilation. The movie
might ultimately live or die on Oscar nomi-
nations, and an Academy newly radicalized
by the Harvey Weinstein allegations wasn’t
about to reward a Kevin Spacey project.
By November 8, the financiers had
decided to shoot the 87-year-old Christo-
pher Plummer in Spacey’s role. That
meant nearly two weeks of costly reshoots,
extra fees for the other stars, at least a few
hundred thousand for Plummer, and over-but was it also “politically outspoken,” a
risk? Carbonara decided to split the differ-
ence; it was both a risk and an asset. Also
on the agenda: The website All About the
Tea had published seedy texts sent by for-
mer baseball player Jim Edmonds to a
woman not his wife. “I wanted to add
‘sending explicit text while in a marriage/
relationship’ as a guideline to our current
infidelity classification,” said Slattery.
There was also the fact that “his penis and
etc. are in the photos. Would we want to
include the tag of ‘leaked nude photos’?”
Spotted usually applies that term to photos
leaked by the celebrities themselves, but
the team agreed that a dick pic is a dick pic.
Edmonds’s behavior would be logged in
Spotted’s database, which includes nearly
27,000 public figures, each correlated with
224 attributes and risk factors. And though
the discussion often sounded like a TMZ
staff meeting, these assembled gossips were
doing the work of actuaries. Later this sum-
mer, Spotted plans to sell “disgrace insur-
ance” to entertainment companies and
commercial brands, making the risk of
celebrity downfall as quantifiable and reim-
bursable as that of floods and car crashes.
Celebrity scandal is as old as the tab-
loids, but the type of protection Spotted
will offer was hardly used even a decadeJust
BieberADVANCED FORMTRANSMITTED
________ COPY ___ DD ___ AD ___ PD ___ EICAD1619CR_disgrace_insurance_lay [Print]_35557129.indd 60 8/1/19 4:03 PM60 newyork| august5–18, 2019
The Rise ofScandalIn suranceinHolly woodO
ne monday injune,
a team of young data
researchers gatheredinthe
conference roomofa Bos-
ton start-up calledSpotted-
Risk to talk about celebrities who’dgotten
themselves into trouble. Operationsanalyst
Fr anki Slattery began the meetingbytick-
ing off a couple of updates: CubaGooding
Jr. had been arrested for allegedlygroping
a woman at a bar; soccer star CristianoRon-
aldo’s civil rape lawsuit had beenmovedto
federal court.
Other “disgrace events,” as Slatterycalled
them, were harder to categorize. RapperLil
Xan had pulled a gun on someoneata
7-Eleven over a dispute aboutTupac.
“They’ve started describing the situationas
‘assault with a deadly weapon,’ ” ratherthan
the standard gun possession, Slatterysaid.
Also, Lil Xan had used the N-word.“Pardon
my ignorance,” said Mira Carbonara,Spot-
ted’s VP of commercialization. “Littlewhat-
ever-his-name-is? Is he African-Ameri-
can?” He is not, but the ethnicityofthe
victim was unknown. They agreedtologit
as a “hidden risk” for future racism.
In other news, Kim Kardashianwas
going to sponsor ride shares toferry for-
mer prisoners to job interviews.It would
be logged as a “cause,” a positiveattribute,
Can youindemnifyagainst
dickpics?ByBorisKachkaPHOTOGRAPHS:PATRICKMCMULLAN(ALLEXCEPT“SHAVESHEAD”)The CULTURE PAGES
ago. Under the studio system, the finan-
ciers were in control—their stars’ trans-
gressions easier to cover up, their contracts
easier to tear up. True outrages like the
Fatty Arbuckle case were relatively rare,
and when they happened, the machine
smoothed things over and rolled on. But
today’s stars are the machine, command-
ing millions in endorsement deals and the
lion’s share of indie-film budgets and car-
rying billions in market value on the backs
of their reputations.
Those reputations, meanwhile, are
increasingly fragile. Ubiquitous video and
social media, supercharged by #MeToo,
have led to a proliferation of high-profile
disasters—Miramax’s implosion, Kevin
Spacey’s erasure, Roseanne without Rose-
anne—leading producers and brands to
look for new ways to mitigate the risks of
reputational collapse. Studios have hired
risk managers, dug deep into stars’ back-
grounds in search of red flags, and added
“morals clauses” to contracts. They’ve also
been asking around about insurance.
If SpottedRisk’s product takes off, it will
join a small but growing industry of dis-
grace insurers. Like other new types of
insurance (terrorism, cyberattack, active
shooter), Spotted’s disgrace innovation
re flects what we fear most in the 21st cen-
tury. In this case, it’s the persistent, grow-
ing dread that a career-ruining fall from
grace is always just a click away.things were going so wellforAllthe
Money in the World, a big ChristmasWeek
release from pop auteur Ridley Scottstar-
ring Mark Wahlberg and MichelleWil-
liams. Kevin Spacey was the ace inthehole
as J. Paul Getty, the mogul whorefusedto
pay ransom for his kidnappedgrandson,
raising the question, When youcanbuy
anything you want, what is thepriceofa
human being?
In the case of Spacey, it wasat least
$10 million. On October 29, 2017,Adam
Rapp alleged that the House of Cardsstar
had made a sexual advance onhimwhen
Rapp was 14. Multiple accuserscamefor-
ward over the next few days, andScottand
his financiers had to make an impossible
choice: replace Spacey with anotheractor
or risk box-office annihilation. Themovie
might ultimately live or die on Oscarnomi-
nations, and an Academy newly radicalized
by the Harvey Weinstein allegations wasn’t
about to reward a Kevin Spacey project.
By November 8, the financiers had
decided to shoot the 87-year-old Christo-
pher Plummer in Spacey’s role. That
meant nearly two weeks of costly reshoots,
extra fees for the other stars, at least a few
hundred thousand for Plummer, and over-but was it also “politically outspoken,” a
risk? Carbonara decided to split the differ-
ence; it was both a risk and an asset. Also
on the agenda: The website All About the
Tea had published seedy texts sent by for-
mer baseball player Jim Edmonds to a
woman not his wife. “I wanted to add
‘sending explicit text while in a marriage/
relationship’ as a guideline to our current
infidelity classification,” said Slattery.
There was also the fact that “his penis and
etc. are in the photos. Would we want to
include the tag of ‘leaked nude photos’?”
Spotted usually applies that term to photos
leaked by the celebrities themselves, but
the team agreed that a dick pic is a dick pic.
Edmonds’s behavior would be logged in
Spotted’s database, which includes nearly
27,000 public figures, each correlated with
224 attributes and risk factors. And though
the discussion often sounded like a TMZ
staff meeting, these assembled gossips were
doing the work of actuaries. Later this sum-
mer, Spotted plans to sell “disgrace insur-
ance” to entertainment companies and
commercial brands, making the risk of
celebrity downfall as quantifiable and reim-
bursable as that of floods and car crashes.
Celebrity scandal is as old as the tab-
loids, but the type of protection Spotted
will offer was hardly used even a decade