Two things:
1) TMZ breaks a lot of things before anybody else these days, in the athlete/entertainer realm. On a lesser note, for example, they had MMA star Rampage Jackson's car chase and related events ahead of the curve. They DEFINITELY broke the story of the young Angel pitcher being killed in the car crash earlier this spring.
2) From my experience -- the reason I know about this is I somehow got on some kind of breaking TMZ e-mail alert list because of some sports story a while back -- they might be out on a limb with some gossip deal. But when it comes to something serious, if they've broken it, it has been right. They haven't, to be blunt, gotten a death wrong.
They're a gossip site, but they're extremely well connected, and you have to give the devil its due.