First Suit Filed in Radio Payola Probe
SUSAN STAMBERG, host:
This is WEEKEND EDITION from NPR News. I'm Susan Stamberg.
But first, New York Attorney General Eliot Spitzer has filed the first lawsuit in his ongoing investigation into payola in the radio and music industries. The suit charges that Entercom Communications Corporation illegally took cash and other gifts from record labels and independent promoters in exchange for playing specific songs. Entercom is the nation's fifth largest broadcaster. It has 105 stations across the country.
From member station WHYY in Philadelphia, Joel Rose reports.
JOEL ROSE reporting:
The suit alleges, among other things, that the program director of radio station WKSE in Buffalo, New York, requested and got $1250 from Sony-BMG in exchange for adding this song, by Jessica Simpson, to the station's play list.
Ms. JESSICA SIMPSON (Singing With You): The real me is a southern girl with her Levi's on and an open heart. Wish I could save the world like I was Supergirl. The real me used to laugh all night. Lyin in the grass just talkin' bout love. But lately I've been jaded. Life got so complicated.
ROSE: This is the latest step in a year-long investigation into what New York Attorney General Eliot Spitzer has characterized as the pervasive practice of payola. Last year, Spitzer arrived at settlements with two of the major record labels. Sony-BMG and Warner Music Group agreed to pay ten million and five million dollars respectively, and promised to stop paying for airtime without disclosing the transaction to listeners.
In the case of Sony-BMG the Attorney General published internal emails and memos that revealed questionable promotion practices. But in its complaint against Entercom, Spitzer's office included even more damning documents.
Cliff Doerksen is a film critic at Timeout Chicago, the author of a book on radio, and an authority on the history of payola.
Mr. CLIFF DOERKSEN (Film Critic, Timeout Chicago): It's kind of bizarre to see it so bureaucratized and with these little forms. They have these little schedules and all this paperwork attached to it.
ROSE: One of those is titled 2004 Record Company Report. It was prepared by WKSE's program director David Universal. According to the report, for the week of January 13th, the station received $800 for adding Hillary Duff to its playlist, a thousand for adding Jay-Z, and $15 hundred for adding Kimberley Locke.
New York Assistant Deputy Attorney General Terrell Brown Clemons says this was Universal's report to his boss.
Ms. TERRELL BROWN CLEMONS (Assistant Deputy Attorney General, New York): What he indicates is exactly what songs, the name of the label, and then what he got for the ads. Sometimes it's money. If you look at January 27th, he added a Kathy Rose(ph) song, the label is V2 and he got $1250 for Entercom.
ROSE: In announcing the lawsuit, Clemons' boss, Eliot Spitzer, blasted the Federal Communications Commission for not responding to the payola he's exposed. Commissioner Jonathan Adelstein says the FCC is in the midst of its own investigation. And he thanked the New York Attorney General for providing such specific documentation.
Mr. JONATHAN ADELSTEIN (Commissioner, Federal Communications Commission): The problem with payola is that neither the person who bribes, nor the person who is bribed, are likely to come forward and admit it. So we didn't have a real smoking gun. We had a lot of smoke. But now, thanks to Eliot Spitzer, I think there's going to be major consequences for those that engaged in potentially unlawful practices.
ROSE: Entercom could face fines, or the loss of some of its station licenses; although Adelstein says that's not likely for what's considered a first offense. Officials with the Pennsylvania based company declined to be interviewed for this story. Although Entercom did release a statement saying it has, quote, "firm policies prohibiting payola." But in an email from a senior Entercom manager to the company's chief financial officer that was included in the complaint, Entercom executives put a specific dollar figure on the amount each station should get from record labels and independent promoters. In effect, an annual payola quota.
New York Deputy Assistant Attorney General Terrell Brown Clemons says the company the company was also looking for novel ways to capitalize on its stations.
Ms. CLEMONS: Entercom actually devised certain programs in order to extract more money from the labels. And one of the programs that they devised was this CD preview, where you would pay to have your song played in the overnight a certain number of times.
ROSE: CD preview programs were advertised as paid for by record labels, so in that sense they were not illegal. But the idea behind them was to help record labels manipulate the charts by making a song appear more popular than it really was, because it got all those extra overnight plays. Writer Cliff Doerksen says he's surprised at how clinically Entercom executives and staffers appear to discuss these practices, in the internal emails that accompanied the New York State lawsuits.
Mr. DOERKSEN: Somehow it seems less wholesome to me than the old practice of like slipping a couple hundred dollars bills inside the record jacket when you hand the single over to the DJ. I don't know, maybe that's romantic of me; but it seems like a better way to do it.
ROSE: At least in those days, reasons Doerksen, smaller independent labels could afford to play the game too.
For NPR News, I'm Joel Rose.