US Senator introduces bill against US ‘payola’ as Warners settle with Spitzer

December 2005

Radio, record labels

Senator Russ Fiengold (Democrat, Wisconsin) has introduced legislation that seeks to close the loopholes on payola-like practices and stop alleged “muscling” practices by broadcast-venue owner companies from forcing performers to play for reduced fees or for free. Senator Feingold has crafted his Radio and Concert Disclosure and Competition Act of 2005 after studying the New York Attorney General Eliot Spitzer’s $10 million settlement in July with Sony BMG Music Entertainment, and realizing there is a need to help artists and also regulate such practices on the radio side to prevent abuse of a dominant position by large conglomerates who control venues as well as radio stations and other media. In The US, Warner Music Group has become the second major label company to settle with New York attorney general Eliot Spitzer’s office in its ongoing payola investigation. WMG is paying out $5 million – which will be donated to nonprofit organisations – and a further $50,000 to cover the cost of the enquiry. Spitzer accused the label of dishing out iPods, $800 gift cards and cash bribes of up to $20,000 to DJs and radio stations. In July, Sony BMG was the first record company to reach settlement, paying out $10 million in settlement. WMG has agreed to abandon the practice of providing radio stations and their employees with financial incentives and promotional items in exchange for airplay of its recordings ( 22 November 2005).

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