Government to Examine Payola, Promises Swift Action

Federal regulators are taking a closer look at the payola scandal that led to a $10 million settlement by Sony BMG Music Entertainment with the state of New York. FCC Chairman Kevin Martin announced late Monday that his agency will review the settlement for any disclosures of payola rule violations. He promised swift action against anyone violating rules against "pay-for-play" in the music industry.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Federal regulators are taking a closer look at the payola scandal that led to a $10 million settlement by Sony BMG Music Entertainment with the state of New York. Federal Communications Commission Chairman Kevin Martin announced late Monday that his agency will review the settlement for any disclosures of payola rule violations. He promised swift action against anyone violating rules against “pay-for-play” in the music industry. The FCC “will not tolerate non-compliance,” Martin said in a statement. “While payola may not be a widespread practice in the broadcasting industry, to the extent it is going on, it must stop.” The agency, which regulates the public airwaves, could fine violators up to $32,500 per incident. Last month, Sony BMG agreed to pay $10 million and stop bribing radio stations to feature its artists. The agreement is part of a wider investigation by New York state Attorney General Eliot Spitzer, who has called payola “pervasive” in the industry. A 1960 federal law and related state laws bar record companies from offering undisclosed financial incentives in exchange for airplay. “Payola” is a contraction of “pay” and “Victrola,” the old wind-up record player. FCC commissioner Jonathan Adelstein, who had called for an agency investigation, applauded the move. “I believe this payola scandal may represent the most widespread and flagrant violation of any FCC rules in the history of American broadcasting,” said Adelstein. “Mr. Spitzer’s office has collected a mountain of evidence on the potentially illegal promotion practices of not only Sony BMG, but also other major record companies, independent promoters and several of the largest radio station groups.” Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Trending Stories

 

Featured Product

Global Briefing

A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors.

Learn More

More from ALM

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Privacy Policy

About Us / Contact Us / Site Map / Advertise With Us/ Customer Service / Terms of Service/ FAQ / Privacy Policy

Publications

Law Topics

Rankings

More

Law.com

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.