US radio stations settle with FCC in payola scandal

April 2007

Record labels

Following from New York Attorney General Eliot Spitzer’s successful pursuit of the for major record labels in the US on payola charges, four major US broadcasters (Entercom, Clear Channel, CBS and Citadel) have been fined $12.5M by the Federal Communications Commission, bringing to an end the most recent probe into payola in the US media. The stations have also agreed to up their airplay commitment (of around 4,000 hours) to local and independent acts. While the broadcasters have admitted no wrongdoing, the deal is still subject to final FCC approval. A new set of regulations will also be put in place that will mean closer scrutiny of broadcasters’ dealing with record labels, a limit – as well as greater transparency – on the ‘gifts’ they can receive from labels, as well as the introduction of a “payola hotline” for radio employees to report abuses of the system (Five Eight magazine). The deal appears to close an embarrassing chapter for the music and radio industries. Mr. Spitzer’s inquiry disclosed how payloa payments had become widespread as label executives pressed to obtain exposure for stars. In some cases, label executives offered payoffs directly; in others, they hired middlemen known as independent record promoters, to funnel gifts or other enticements to radio station personnel in return for airplay for tracks.

No Comments

Comments are closed.