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(You
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1.
Feature Story / Eleventh
Week / March 9, 2006 /
Hong
Kong
Triad
/
"Jockey Club"
RadioPlayMusic
•
•
Eliot O. Spitzer Alleges
Payola in Lawsuit. The New York attorney general
says radio company Entercom sold airplay to record
labels, "and it seems the FCC doesn't give a damm,"
say people close the investigation.
•
•
FCC insiders said Spitzer's
investigators, frustrated by the agency's inaction,
had stopped sharing documents with them.
•
•
Spitzer told ABC News last
month, "I would like to see the FCC more directly
involved in addressing what is very clearly a
payola scandal that has run rife through the
industry. They have failed to do so and we have
reached out to
them."
•
•
Spitzer reiterated that
critique on Wednesday, March 5th, telling a
reporter with the Associated Press, "The FCC must
come to life on this issue. Maybe their ears are
clogged, I don't know."
•
•
But since then, the FCC has
been largely quiet on the issue. The agency
launched a payola investigation of an Entercom
station in Niagara Falls, N.Y., more than a year
ago but has not announced any results.
•
•
The nation's fourth-largest
radio company, Entercom Communications Corp.,
traded airtime for gifts and payments in a payola
scam that included formalized programs to sell
airplay to record labels, according to a suit filed
Wednesday by New York Atty. Gen. Eliot Spitzer.
•
•
The suit's most serious
allegations focus on Entercom's "CD Preview" and
"CD Challenge" programs, in which radio executives
allegedly solicited payments to improve a song's
position on national airtime
charts.
•
•
In one e-mail released by
Spitzer, Entercom's vice president of programming,
Pat Paxton, wrote to a colleague: "A quick lesson
on how CD Preview works: Record companies buy the
program to better their chart position…. It
generates millions of dollars for Entercom that is
found money."
•
•
Spitzer's suit comes as
Entercom and at least two other radio companies
have communicated with the Federal Communications
Commission about settling an investigation into
payola practices, sources familiar with the talks
said.
•
•
Representatives of Clear
Channel Communications Inc., the nation's largest
radio station owner, Citadel Broadcasting Corp. and
Entercom have been in contact with representatives
of the FCC's enforcement division to discuss
pay-for-play investigations, said those sources,
who did not want to be named for fear of derailing
a potential settlement. The sources said some FCC
officials had hinted at a willingness to quickly
resolve the agency's
inquiry.
•
•
But that haste has some
observers worried that a speedy resolution could
lessen the effect of Spitzer's
investigations.
•
•
"We need to shine more
sunlight on the corruption in how radio stations
choose songs," said Don Rose, president of the
American Assn. of Independent Music. "An agreement
behind closed doors between the FCC and the big
radio companies is exactly the opposite of
that."
•
•
Representatives from the
FCC's enforcement division, Clear Channel and
Citadel declined to comment.
•
•
An Entercom statement said
the company was cooperating with the New York
attorney general's office and had policies
prohibiting
payola.
•
•
The differing approaches of
Spitzer's office and the FCC reflect a disagreement
over how radio pay-for-play should be handled.
Spitzer's investigations have resulted in publicly
disclosed settlements and suits. The FCC, by
comparison, has opted for a behind-closed-doors
approach and has yet to announce any major
findings, sanctions or
settlements.
•
•
In February, Spitzer
subpoenaed nine of the nation's largest radio
companies, including Entercom, Clear Channel and
Citadel, to investigate claims that major record
labels had paid radio executives in exchange for
playing certain
songs.
•
•
Part
02 /
Wednesday's suit, filed in
New York Supreme Court, alleges that Entercom, the
Bala Cynwyd, Pa., company that owns and operates
105 radio stations nationwide, traded airtime for
gifts, promotional items and personal trips, as
well as solicited and accepted payments from record
labels to play songs by such artists as Avril
Lavigne, Liz Phair and Jessica
Simpson.
•
•
"Entercom has instituted
corporate programs, supported and directed by its
most senior management, that have amounted to
little more than the direct sale of airplay on
Entercom stations for the purpose of manipulating
the music charts," the lawsuit alleges.
3.
Editor's Note
/
In a statement, Spitzer said
that "senior management viewed control of the
airways as an opportunity to garner illegal
payments from record
labels."
•
•
Under federal and New York
law, it is illegal for a radio station to accept
anything of value in exchange for airplay unless
listeners are informed of the
trade.
•
•
Spitzer also made public 66
pages of e-mails and other documents that allegedly
detail Entercom's payola programs. Among them are
internal Entercom forms that Spitzer said indicated
how goods were traded for airplay. On one form, an
employee scrawled that "750 + 1 Sony Playstation"
was received, noting that the cash and gift were
related to Jennifer Lopez.
•
•
In another document, an
Entercom program director sent an e-mail to an
executive at Epic Records, discussing airplay of
the band
B2K.
•
•
"I'll give you B2K early --
and a Guaranteed spot in rotation next week for
1500," the e-mail reads. The Epic executive
responded with an offer of $2,500 for airplay of
B2K and "Kelly" -- presumably the pop star Kelly
Clarkson, an artist who records on the RCA
label.
•
•
In July, Spitzer settled a
payola investigation with Sony BMG Music
Entertainment, the parent company of Epic and RCA.
The company paid a $10-million fine and promised to
discontinue certain
practices.
•
•
In the wake of that
settlement, the attorney general shared the
documents he had collected with investigators at
the FCC, which soon announced that it was
scrutinizing payola scams at hundreds of radio
stations. One FCC commissioner, Jonathan Adelstein,
called it potentially "the most widespread and
flagrant violation of any FCC rules in the history
of American broadcasting."
Josie
Cory
Publisher/Editor
TVI Magazine
•
• TVI
Magazine, tviNews.net, YES90, Your Easy Search,
Associated Press, Reuters, BBC, LA Times, NY Times,
VRA's D-Diaries, Industry Press Releases, They Said
It and SmartSearch were used in compiling and
ascertaining this Yes90 news
report.
•
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Eliot Spitzer on Payola and the FCC. "The FCC must
come to life on this issue. Maybe their ears are
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Feature
Story / • 106FCCSpitzerPayolaClaim.htm
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