Spitzer Names Entercom In Payola Lawsuit
March 8, 2006 at 3:54 PM (PT)
NEW YORK State Attorney General ELIOT SPITZER has announced a lawsuit against ENTERCOM COMMUNICATIONS, alleging that the company illegally traded "air time" for payments.
In the press release, SPITZER said, "By accepting secret payments in exchange for air time, ENTERCOM compromised its radio programming and violated state and federal laws. What makes this case especially egregious is the extent to which senior management viewed control of the airways as an opportunity to garner illegal payments from record labels."
Almost a year after payola was exposed in significant detail, the FCC has yet to respond in any meaningful way.
In a related development, the Attorney General again called upon the FEDERAL COMMUNICATIONS COMMISSION to act on payola. "Almost a year after payola was exposed in significant detail, the FCC has yet to respond in any meaningful way. The agency’s inaction is especially disappointing given the pervasive nature of this problem and its corrosive impact on the entertainment industry."
In response to SPITZER's lawsuit, FCC Commissioner JONATHAN ADELSTEIN stated, "The NEW YORK Attorney General investigation is piling evidence on top of evidence of the widespread abuse of the public trust. Given the voluminous documents pointing to major, systematic violations of FCC rules, the penalties should be commensurate with the crime. We can't let any violators get away with a slap on the wrist."
The lawsuit filed today in State Supreme Court in MANHATTAN, alleges that ENTERCOM:
* Traded air time for gifts and other payments;
* Traded air time for promotional items and personal trips;
* Solicited and accepted payments from record labels for air time;
* Instituted corporate programs, supported and directed by senior management, that sold air time to record labels in order to manipulate the music charts.
The lawsuit cites evidence that ENTERCOM executives were closely involved in these illegal practices. In various documents and e-mails cited in the complaint, ENTERCOM executives discussed strategies for supplementing radio station budgets with payments from independent promoters and record companies.
Click here to view SPITZER's complete press release, and click here to view the 67 page evidence exhibit.
In response to SPITZER's lawsuit, ENTERCOM issued the following statement:
"ENTERCOM is a company that believes in playing by the rules and does so. We have firm policies prohibiting payola and requiring compliance with the federal sponsor identification rules and we enforce them. We have cooperated fully with the Attorney General's office in this investigation. Now that the Attorney General has filed this civil action we are confident that the issues will be fully and fairly resolved by the court."
Universal Maintains Innocence
When SPITZER's investigation began last year, former ENTERCOM Top 40 WKSE/BUFFALO PD DAVE UNIVERSAL, now programming at crosstown Top 40 CKEY, was let go in JANUARY 2005 following an internal investigation. He told ALL ACCESS, "Even as I spend the week at Spring Training with my son, the pain and suffering I've had to endure as a result of my firing is a daily struggle. I maintain, since day one, that I was wrongfully terminated without cause. I was only doing my job the way I was instructed to do it. All that being said, I still don't feel that ENTERCOM had me doing anything illegal."