Quantcast
"Consumers have a right not to be misled about the way in which the music they hear on the radio is selected... Pay-for-play makes a mockery of claims that only the ‘best’ or ‘most popular’ music is broadcast."
—-Eliot Spitzer

AND THEN THERE WAS ONE

Universal Music Group's $12 million Judgment Leaves Only EMI to Settle With Spitzer
Universal Music Group has settled its suit with N.Y. State Attorney General Eliot Spitzer, agreeing to end its "pervasive pay-for-play practices" and fork over $12 million as part of the settlement.

The label group has also agreed to stop making payments and providing gifts to radio stations and their employees in return for "airplay" of particular artists’ songs. To read the AG's press release, click here.

UMG now joins Sony BMG ($10 million) and Warner Music ($5 million) in settling with Spitzer, leaving only EMI unresolved. Spitzer has also targeted the four major radio chains, filing a suit against Entercom Communications (see hitsdailydouble.com, April 1, 2006), as he urges the FCC to be more aggressive in their own payola investigation.

"Consumers have a right not to be misled about the way in which the music they hear on the radio is selected," said Spitzer. "Pay-for-play makes a mockery of claims that only the ‘best’ or ‘most popular’ music is broadcast."

A UMG statement read: "We have been working cooperatively with the Attorney General’s office in resolving these promotion issues and are pleased to have completed the process with this agreement. The reforms that we have agreed to with the Attorney General are consistent with the policies that we voluntarily implemented over a year ago."

Spitzer’s investigation cited a number of instances where the label offered "inducements to radio stations and their employees to obtain airplay" by artists including Nick Lachey, Ashlee Simpson, Brian McKnight, Big Tymers, and Lindsay Lohan.

During the investigation, a promotion executive at Interscope acknowledged that he was trained to "never say no to radio" and to "keep the lines of communication open, to have access."

Universal’s pay-for-play strategy included:

*Outright bribes to radio station programmers, including electronics, vacations, airfare, hotel accommodations and tickets to sporting events and concerts;
*Payments to radio stations to cover operational expenses and contest giveaways;
*Retention of middlemen, known as independent promoters (or "indies"), as conduits for illegal payments to radio stations;
*Payments for "spin programs" and "time buys," airplay under the guise of advertising.

The Attorney General’s office obtained emails showing that Universal executives were not only aware of the payoffs but regularly trained and pressured subordinates to buy airplay.

The settlement featured an excerpt from a July, 2003 e-mail from a senior Motown Records Group executive to a promotion employee regarding airplay of Lumidee’s song "Dream":

"This is embarrassing and a total lack of accountability. We have gotten ripped off beyond belief... That’s almost $300,000 and they are looking for some heads... bad bad bad. I don’t want one invoice processed for indies, stations, etc., until their end of the deal is held up. If I find out that the deals were cut with lack of airplay and overnight spins starting with the nationals, as they say heads are gonna roll, including mine."

Another instance was cited of a PD at WBEE Rochester getting Uni-South to give the station a $2,500 laptop computer in exchange for him adding two songs, one by Joe Nichols and the other by McHayes. The station then provided a false letter stating that the computer had been sent as part of a promotion.

The press release cited individual promoters, including Jeff McClusky, Bishop, Bait & Tackle and Michele Clark, hired by UMG because "they had exclusive arrangements with particular radio stations."

The release also cites the use of "time buys," radio advertisements for particular artists or recordings which each broadcast only a segment of a particular song, but were registered as complete plays for chart purposes.

The settlement entails UMG's agreement to corporate-wide reforms, including: "immediate cessation of payments and other inducements to radio stations for airplay; discontinuance of independent promoters as a pass-through for securing airplay; hiring of a compliance officer to monitor promotion practices; and implementation of an internal system to detect future abuses."

The company will also make a $12 million payment, which will be distributed through the Rockefeller Philanthropy Advisors, to New York State not-for-profit entities to fund music education and appreciation programs.

SPRINGTIME
FOR HITS LIST
Meet this week's ensemble cast. (3/18a)
NEAR TRUTHS: STREAMING AND STREAMLINING
Knight's new day (3/18a)
TOP 50: ARI BASKS
IN THE sunshine
The biggest bow of the year (3/15a)
THE COUNT: ROLLING LOUD KEEPS ITS EYES ON THE PRIZE
The latest from the live sector (3/14a)
DEEPER WELL MARKS KACEY MUSGRAVES’ “SATURN RETURN”
Gleason on Musgraves (3/18a)
THE NEW UMG
Gosh, we hope there are more press releases.
TIKTOK BANNED!
Unless the Senate manages to make this whole thing go away, that is.
THE NEW HUGE COUNTRY ACT
No, not that one.
TRUMP'S CAMPAIGN PLAYLIST
Now 100% unlicensed!
 Email

 First Name

 Last Name

 Company

 Country
CAPTCHA code
Captcha: (type the characters above)