Broadcasters Pay $12.5 Million To Settle Possible Payola Issues
April 13, 2007 at 10:27 AM (PT)
The FEDERAL COMMUNICATIONS COMMISSION has released Orders adopting Consent Decrees with CBS RADIO, CITADEL BROADCASTING CORPORATION, CLEAR CHANNEL COMMUNICATIONS, Inc. and ENTERCOM COMMUNICATIONS CORP. where the broadcasters agree to pay a combined $12.5 million to close investigations into each broadcaster’s possible violations of the Commission’s sponsorship identification rules for the practice commonly referred to as "payola."
Specifically, the Consent Decrees resolve allegations that the broadcasters may have accepted cash or other valuable consideration from record labels in exchange for airplay of artists from those labels, without disclosing those arrangements.
The Commission has provided clear guidance to licensees and sent a strong message that the practice of payola must stop for good.
In addition to the $12.5 million in voluntary contributions, the broadcasters agree to implement certain business reforms and compliance measures.
Key provisions of the Consent Decrees include:
*Prohibition on company stations and employees exchanging airplay for cash or other items of value except under specified conditions
*Limits on gifts, concert tickets, and other valuable items from record labels to company stations or employees
*Appointment of Compliance Officers and market-level Compliance Contacts responsible for monitoring and reporting company performance under the Consent Decrees
*Regular training of programming personnel on payola restrictions.
FCC Chairman KEVIN MARTIN said, "The Commission has longstanding rules prohibiting payola. These rules serve the important purpose of ensuring that the listening public knows when someone is seeking to influence them or the types of music that they hear on the radio. As I have said before, the Commission will not tolerate non-compliance with its rules.
"In order to resolve the Commission’s investigation into whether these license holders were violating applicable sponsorship identification laws, the four companies have agreed to implement various business reforms to ensure that their respective stations and employees do not violate the sponsorship identification laws in the future. They have also agreed to make significant contributions to the U.S. Treasury totaling $12.5 million.
"Through this strong enforcement action that we take today, the Commission has provided clear guidance to licensees and sent a strong message that the practice of payola must stop for good."