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Entercom to Pay $4.25 Million in Payola Probe

December 28, 2006 11:59 AM

Payola1_060511_nr Entercom, one of the country's largest radio broadcasting companies, has agreed to make a $4.25 million charitable contribution to settle payola allegations by outgoing New York Attorney General and incoming New York Gov. Eliot Spitzer. 

As has been reported since February 2006 in a Brian Ross Primetime investigation and on "The Blotter," payola is the age-old practice of paying to have records played on the airwaves, but this time around the investigation targeted not individual disc jockeys but record companies and radio conglomerates.

According to a statement released by Spitzer's office, Entercom has agreed to begin "halting the practice of accepting payments and other inducements from record labels in exchange for airplay" and "banning all payments from independent promoters employed as a pass-through for funds from record labels."  Entercom has also committed itself to "hiring a compliance office to monitor promotion practices" and "implementing an internal system to detect any future abuses."

The lawsuit filed by the Attorney General's Office also alleged Entercom has developed programs, known as "CD Preview" and "CD Challenge," which allowed "record labels to pay to play their songs in the overnight hours for the purpose of manipulating the music charts."

Entercom maintained its choice to settle was not an admission of culpability.  "In the interests of the company, our employees and our shareholders, we have chosen to resolve this matter immediately and without extensive and costly litigation," an Entercom spokesperson told ABC News. "The Court did not find any liability, nor are we admitting liability with this settlement. Rather, we are taking the opportunity to put the investigation behind us and move forward."

Click Here for Full Blotter Coverage.

The ongoing payola investigation by the New York Attorney General's Office has resulted in settlement agreements with four major record companies and now two radio conglomerates, Entercom and CBS Radio. Terry Brown Clemons, an Assistant Deputy Attorney General,  says, "Six other radio broadcasting companies remain under investigation for alleged payola practices, including ABC."

Read Entercom's Settlement.

December 28, 2006 | Permalink | User Comments (4)

User Comments

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$4.25 million? THATS IT? The music industry had killed all forms of music, force-feeding us gangsta-rap, K-Fed, and Justin Timberlake. $4.25 million is a drop in the bucket. Unbelievable, that the VALUE of music has declined so much, that they get off with a slap on the wrist.

Posted by: JelloB | Dec 28, 2006 12:06:11 PM

$4.25M is a drop in the bucket. Payola has been going on for decades and will most likely continue unless something SERIOUS is done to the guilty companies. Take away their broadcast rights for a few months and see how that is. Besides nailing the broadcasting companies, why aren't they hitting the record companies? They are just as guilty. In either case, a slap on the wrist is nothing more than an annoyance.

Posted by: Tony | Dec 28, 2006 4:03:43 PM

There's really not much Spitzer could do to target the record companies. His jurisdiction is entirely within New York, thus he was able to get radio stations in his home state. Rather than accuse him of settling with a small penalty, I encourage the feds, who can make much more serious charges and punishments, will follow Spitzer's lead. I think only the feds could do that because the only other state in which investigation would make an impact, California, would find investigating payola not in its interest.

That said, I wholeheartedly agree that the music industry and RIAA are complete sleeze bags who have simply manipulated law into profiting off of other peoples' art, effectively becoming a coercive monopoly. Any organization who can file thousands of lawsuits against so-called "John Does", determine the identities of the defendants, drop the cases, pursue the defendants one by one, and still have money to pay such enormous legal bills, is not engaging in fair market practices. Though I personally believe true gangsta rap has significant artistic value, the so-called mainstream is simply about selling records. I refuse to listen to any radio station other than classic rock. In fact, where I live, three popular radio stations are owned by Entercom.

Posted by: Andrew Elgert | Dec 28, 2006 7:23:55 PM

This is justice?
Hail to Spitzer, certainly. I love the guy for finally making a move against rampant BS, but there's no "justice" here (or anywhere in America, really, but that's another story.) This slap on the corporate wrist is a slap in the face to those of us who can no longer even stomach radio. I haven't listened to the radio (or watched TV) in YEARS because of what it's become.
Companies guilty of lawbreaking should have to announce it in every commercial, on every billboard, on every product & form. Too long are too many getting away with too much that gets annouced in too small print on too far back a page. Put this crap in the limelight, instead of constantly burying it in a half-paragraph on back pages! Scream it in every news advertisement; THIS COMPANY IS NOT TO BE TRUSTED!
Take away the legal status of corporations as "people" under the law TODAY! This single thing screws over more civilians than anything else in the world today.
People DO have the right to revoke a corporate license, but it seems that most people don't know it (more buried, back page news, I guess.) Not to mention that laws are anything but, where money & fame are concerned.
Cynicism? No--reality. We're all aware of widespread corruption throughout our "great" nation, but nothing REALLY ever gets done about it.
This is justice?

Posted by: Lana | Jan 1, 2007 7:31:29 PM

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