Sony BMG Apologizes For Payola Involving J. Lo, Avril, Good Charlotte, Others
07.25.2005 3:06 PM EDT

The payola has got to stop — that's the word from New York State Attorney General Eliot Spitzer, who on Monday announced a settlement with Sony BMG Music Entertainment, which has agreed to cease its "pay for play" policy.

The label group, home to such acts as Jessica Simpson and Franz Ferdinand, was the subject of a yearlong investigation that revealed it was paying and providing expensive gifts — otherwise known as "payola" — to radio stations and their employees in return for airplay, in a violation of state and federal law. The payola took the form of outright bribes as well as fictitious contest giveaways for listeners, which actually went to station employees.

For instance, the program director for Buffalo, New York's WKSE-FM received several flights (to New York, Miami and Ft. Lauderdale, Florida, with guests) in exchange for adding Jennifer Lopez's "I'm Real" (in July 2001), Good Charlotte's "Hold On" (in November 2003) and Franz Ferdinand's "Take Me Out" (in August 2004) to his station's play list.

A label employee complained about the deal in an intercepted e-mail to a higher-up: "Two weeks ago, it cost us over $4,000 to get Franz on WKSE. That is what the four trips to Miami and hotel cost. ... At the end of the day, [the program director] added [Good Charlotte] and Gretchen Wilson ... for $750. So almost $5,000 in two weeks for overnight airplay."

In other instances, program directors were offered and/or received electronic goods such as flat-screen TVs, entertainment systems, laptop computers, PlayStation 2 consoles and games, and portable CD players, as well as flights, hotel stays and car service. Radio stations that participated in the payola schemes include WQHT-FM in New York (Hot 97); WWPR-FM in New York (Power 105); KHTS-FM in San Diego (Channel 933); WRHT-FM in Greenville, North Carolina; WFLY-FM in Albany, New York (Fly 92.3), WWHT-FM in Syracuse, New York (Hot 107.9); and WSSP-FM in Milwaukee (The Beat), among others. In response to one such offer, a program director e-mailed the label, saying, "I'm a whore this week, what can I say?"

"Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, airtime is often determined by undisclosed payoffs to radio stations and their employees," Spitzer said. "This [BMG settlement] is a model for breaking the pervasive influence of bribes in the industry."

Much of the illegal solicitation came in the form of "spin programs" — airplay under the guise of advertising — for artists such as Jessica Simpson ("Take My Breath Away"), Good Charlotte ("I Just Wanna Live"), Avril Lavigne ("Don't Tell Me") and Maroon 5 ("Sunday Morning"). This meant listeners were sometimes unaware that the spin was purchased, and the songs achieved an inflated chart position because monitoring services couldn't differentiate between the purchased spins and regular spins.

Also, the label group orchestrated fake call-in campaigns, hiring people to request songs so that the station might add a track because it thought listener demand warranted it. In one e-mail exchange about the practice, a label employee instructed the call-in campaign leader to make the callers sound more excited: "My guys on the inside say that it's the same couple of girls calling in every week and they're not inspired enough to be put on the air. They've got to be excited. They need to be going out or getting drunk or getting in the hot tub or going clubbing ... you get the idea."

Sony BMG acknowledged that fraudulent practices and payola took place and called it "wrong and improper."

"Despite federal and state laws prohibiting unacknowledged payment by record labels to radio stations for airing of music, such direct and indirect forms of what has been described generically as 'payola' for spins has continued to be an unfortunately prevalent aspect of radio promotion," the label group said in a statement. "Sony BMG acknowledges that various employees pursed some radio promotion practices on behalf of the company that were wrong and improper and apologizes for such conduct. Sony BMG looks forward to defining a new, higher standard in radio promotion."

Toward that end, the label group agreed to companywide reforms to detect and prevent future abuses and is making a $10 million donation to local charities to fund programs aimed at music education and appreciation. Meanwhile, Spitzer's office said it is still investigating payola practices at other companies.

— Jennifer Vineyard


--xx--

WTF?


How about Federal Charges of FRAUD and Unfair Business Practices and oh I don't know, firing some people?

They "apologize" and are making at 10 million "donation" (which they will write off on their taxes....)? for committing fraud and bribery?

Unbelievable.

Is BMG still not properly racking and paying royalties to artists for CD (units) moved through their "record clubs" (get 11 for a penny stuff)?


c-

That part bugged me, too, but atleast some can reap the benefits of such a donation.

Further proof that Kiss 98.5 sucks ass unless you're a skanky X addict.

Assuming that the place their sending the money isn't owned by them, or whatever.
Smells fishy still...


c-

How about this is the New York State Attorney General Eliot Spitzer. He has nothing to do with federal charges. Although Eliot Spitzer likes to get his hands dirty...

Shouldn't charges be pressed, then?

This is downright despicable and sleazy, to say the least. However, I'm fully on board with saying that it should be illegal, yet.

It is illegal.

Is there any wonder as to why radio completely sucks?

I was saying that I'm not sure if I agree with that law.

To clarify a bit more, here's what I think:

Simply paying a radio station in exchange for more airplay: shouldn't be illegal, despite how massively unethical it would be.

Having the radio station advertising that is treating all songs fairly when in fact it's fixing the dice: should be open for lawsuits galore.

I'll re-read the article later, but I'm not sure which category this would fit under.

From Pitchforkmedia:

Sony Busted for Payola!

Rob Kleckner reports:
Just in from Pitchfork's Crimewatch: New York Attorney General Eliot Spitzer has forced Sony BMG Music Entertainment to stop paying radio stations for airplay. In case you didn't know, this practice known as payola, is illegal. "Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, air time is often determined by undisclosed payoffs to radio stations and their employees," Spitzer said.

According to a press release from Spitzer's office, the payola occurred in several forms, including the following: "Outright bribes to radio programmers, including expensive vacation packages, electronics, and other valuable items; contest giveaways for stations' listening audiences; and payments for 'spin programs', airplay under the guise of advertising."

An email found during the investigation, from one executive at Epic to another, read: "At the end of the day, [David] Universal added Good Charlotte and Gretchen Wilson and hit Alex up for another grand and they settled for $750."

Another, from an Epic employee to a Clear Channel programmer looked like this: "WHAT DO I HAVE TO DO TO GET AUDIOSLAVE ON WKSS THIS WEEK?!!? Whatever you can dream up, I can make it happen."

You can't make this shit up, folks. To pay for their crimes, Sony has agreed to donate $10 million to non-profit charities and music education programs. Don Henley, of Eagles fame, commended Spitzer for "successfully addressing the pay-for-play problem. There is no question that payola hurts recording artists. The Recording Artists' Coalition is grateful to him and his staff for exposing the magnitude of the payola problem and for getting a major label to agree to change the way it does business."

In a statement, the label said: "Despite federal and state laws prohibiting unacknowledged payment by record labels to radio stations for airing of music, such direct and indirect forms of what has been described generically as 'payola' for spins has continued to be an unfortunately prevalent aspect of radio promotion. Sony BMG acknowledges that various employees pursed some radio promotion practices on behalf of the company that were wrong and improper and apologizes for such conduct. Sony BMG looks forward to defining a new, higher standard in radio promotion."

What does this mean for you, the music listener? Hopefully it's a sign we'll be hearing a lot less Good Charlotte on the radio. Fans of good music everywhere thank you, Mr. Spitzer. He can likely count on the New York hipster vote when he runs for Governor in 2006.

* Eliot Spitzer 2006: http://www.spitzer2006.com/

anyone know if there is a complete list of radio stations identified in this investigation? and if so, where it is? i'm wondering if any local stations were involved....

There were laws put in place after rampant payola in the 50s and 60s - so it is most definitely currently against the law. It more or less prevents record companies from owning the airwaves.

So what exact part of it is illegal, and what are the grounds for it being illegal? Is it because it uses pulblic airwaves? Why is it legal for advertizers to buy airtime, but not artists to buy song time? I think it is despicable also, but I don't see why it should be illegal.

asdf

I knew there was an explanation for Avril and Good Charlottes success.

The "fraud" and "bribary" parts, yeah?
Such things as the "undisclosed payoffs to radio stations and their employees,"....and perhaps even how these are accounted for on their books being "accounting fraud" in addition to the admitted consumer fraud (such as the "orchestrated fake call-in campaigns", for example).

c-

The article's list is incomplete; I would imagine their would be a complete list if someone were being either sued or criminally procecuted....

So if the payoffs are indeed unaccounted for, then of course there is a problem. Also hiring people to call in doesn't sound like consumer fraud. Look at any infomercial/ Viagra/ Street team and you find people hyping products that they have never tried. None of it sounds like bribary either. There is not a big bussiness around that does not take care of the people who make them money through comps. The only issue I see as a problem is the accounting one.