CBS Settles With Spitzer For $2 Million

Eliot Spitzer

ALL ACCESS confirms that NEW YORK STATE Attorney General ELIOT SPITZER has reached a settlement with CBS RADIO INC. in his office's ongoing investigations into payola in the music business.

CBS RADIO has agreed to undertake companywide reforms, including the immediate cessation of receiving payments and other inducements from record labels in exchange for airplay. Other parts of the agreement include hiring a compliance officer to monitor promotion practices and the creation and deployment of an internal system to guard against any potential future violations.

CBS RADIO will also make a $2 million payment, which will be distributed through the ROCKEFELLER PHILANTHROPY ADVISORS to NEW YORK STATE not-for-profit entities to fund music education and appreciation programs.

An additional payment of $50,000 is being made to the OAG's office to cover cost of the investigation. 

CBS released the following statement: "CBS RADIO is pleased to end this two-year music investigation without litigation. THE COMPANY, however, wants to make clear that in entering into this settlement, CBS RADIO does not admit to any liability or violation of law. Prior to the Attorney General’s investigation, CBS RADIO had become aware of conduct that was inconsistent with the COMPANY’s internal policies by two employees in one of its markets. Appropriate disciplinary action was taken by CBS RADIO, with suspension without pay in one instance, and immediate termination in the other. We believe this outcome is better for our company and our shareholders than protracted litigation, and we appreciate the spirit of mutual cooperation that guided the resolution of this settlement."

This settlement with the third largest U.S. radio conglomerate follows on the heels of other settlements with the four big music companies -- SONY BMG, WARNER MUSIC GROUP, UNIVERSAL MUSIC GROUP and EMI GROUP. SPITZER's office is still talkling with six other broadcast companies about similar settlements.

FCC Commissioner JONATHAN ADELSTEIN responded to the settlement by saying, "I commend Attorney General ELIOT SPITZER for once again achieving a breakthrough with this settlement. CBS RADIO is leading the radio broadcasting industry by finally admitting wrongdoing and agreeing to change its practices. This should provide new fuel to drive the FCC payola investigation to completion. Since payola saps the vitality out of radio, this is a win not only for listeners everywhere, but also for the radio industry itself." 

To read SPITZER's comments and the official press release, just click here. 

To download and read the "Exhibits" and what CBS agreed to going forward, click here.

To download and read the CBS "Assurance Of Discontinuance," click here.

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