Four Radio Companies Agree To Payola Settlement
March 5, 2007 at 10:23 AM (PT)
CLEAR CHANNEL, CBS RADIO, ENTERCOM and CITADEL have tentatively agreed to pay the government $12.5 million as part of a consent decree with the FCC, the ASSOCIATED PRESS reports. The four radio firms will not be admitting any wrongdoing under the three-year settlement.
The companies will also provide 8,400 half-hour segments of free airtime for independent record labels and local artists; labels that will get the free airtime cannot be owned or controlled by SONY BMG, WARNER MUSIC GROUP, UNIVERSAL MUSIC GROUP or EMI GROUP.
As part of the separate agreement with the AMERICAN ASSOCIATION OF INDEPENDENT MUSIC, a set of "rules of engagement" will guide how label reps and radio programmers interact. Broadcasters will more closely monitor their dealings with labels, including setting limits on gifts, promising to keep track of all items of value supplied by those companies, hiring independent compliance officers to make sure the rules are followed, and establishing a "payola hot line" for employees to report when rules are broken.
"It's absolutely the most historic agreement that the independent community has had with radio," THIRSTY EAR RECORDINGS Pres. PETER GORDON told AP; GORDON has been leading the negotiations for A2IM. "Without a doubt, nothing else comes close."
FCC Commissioner JONATHAN ADELSTEIN told AP, "I love music and I want radio to sound fresh, dynamic and real. But payola gets in the way of authenticity because money drives the music, not its quality. Taking payola out of the system will lead to more interesting programming."