Universal Music Group Settles Payola Probe With Spitzer

Eliot Spitzer

As first tipped on ALL ACCESS, according to a press release "NEW YORK State Attorney General ELIOT SPITZER today announced a settlement with UMG Recording Inc., to end its pervasive 'pay-for-play' practices." The settlement is for $12 million which will be distributed through the ROCKEFELLER PHILANTHROPY ADVISORS, to NEW YORK STATE not-for-profit entities to fund music education and appreciation programs.

SPITZER's agreement with UMG covers ISLAND DEF JAM, INTERSCOPE, UNIVERSAL MOTOWN RECORDINGS GROUP, UNI-SOUTH, UNIVERSAL NASHVILLE and VERVE, and according the press release the labels have "agreed to stop making payments and providing expensive gifts to radio stations and their employees in return for 'airplay' of particular artists' songs."

SPITZER commented, "Consumers have a right not to be misled about the way in which the music they hear on the radio is selected. Pay-for-play makes a mockery of claims that only the 'best' or 'most popular' music is broadcast." 

SONY BMG, and WARNER MUSIC GROUP already have settlements in place with SPITZER's office for $10 million and $5 million respectively, and SPITZER has a lawsuit going against ENTERCOM. The investigation is continuing with a settlement pending with EMI/CAPITOL/VIRGIN.

In a statement, UMG said, "We have been working cooperatively with the Attorney General's office in resolving these promotion issues and are pleased to have completed the process with this agreement. The reforms that we have agreed to with the Attorney General are consistent with the policies that we voluntarily implemented over a year ago."

For more on this story and to read the complete press release, click here.

To read the full agreement, click here.

To read the edited emails used in this settlement, click here.

« see more Net News