Spitzer Spanks Sony/BMG on Payola
New York state Attorney General Eliot Spitzer announced a deal with Sony/BMG Music Entertainment worked in the middle of a nasty little payola for a cool $10 million. Sony BMG, one of the biggest record labels on the planet reached the settlement because of their “pay-for-play” practice with radio stations.
According to the statement released by Spitzer’s office, Sony BMG paid outright bribes to radio programmers, including vacation packages, electronics and other valuable items; contest giveaways for listening audiences, payments to radio stations for operating expenses, retention of independent promoters to funnel illegal money to radio stations; payments for “spin programs” during airplay that posed as advertising.
According to the release, the company knew well of these payoffs and orchestrated the whole thing. According to various messages among. This practices seems pretty widespread through all types of music and all over the state of New York. One can only assume this practice goes on in other states. In one email, a discussion of a bribe going to a radio programmer in Buffalo at Sony BMG label Epic Records:
“Two weeks ago, it cost us over 4000.00 to get Franz [Ferdinand] on WKSE. That is what the four trips to Miami and hotel cost . . . At the end of the day, [David] Universal added GC [Good Charlotte] and Gretchen Wilson and hit Alex up for another grand and they settled for $750.00. So almost $5000.00 in two weeks for overnight airplay. He told me that Tommy really wanted him to do it so he cut the deal.”
Another delightful message regarding airplay of the Celine Dion song “I Drove All Night” and a concert she was performing in Las Vegas.
“OK, HERE IT IS IN BLACK AND WHITE AND IT’S SERIOUS: IF A RADIO STATION GOT A FLYAWAY TO A CELINE [DION] SHOW IN LAS VEGAS FOR THE ADD, AND THEY’RE PLAYING THE SONG ALL IN OVERNIGHTS, THEY ARE NOT GETTING THE FLYAWAY. PLEASE FIX THE OVERNIGHT ROTATIONS IMMEDIATELY.”
Sony BMG isn’t walking away completely unscathed, although $10 million seems kind of paltry to a multinational. The money will go to charities, distributed by the Rockefeller Philanthropy Advisors to New York State not-for-profit entities, mainly in the form of music education.
Sony BMG did admit to wrongdoing and to “abide by a higher standard”. They signed an assurance and agreed to stop the practice of making payoffs in return for airplay and will disclose all items of value to provided to radio stations.
You know, it seems like the music business is really getting lousy as they insist on having their cake and eating it too. They pay radio stations to play the artists they want showcased, be it Celine Dion, Gretchen Wilson or whoever. The radio stations are all owned by 4 or 5 companies nationwide and they only play what’s popular nationwide. The music business continues to be a detriment to the local and regional artists across the country between the radio companies and the record companies. This makes it exceedingly difficult to have much sympathy when the companies whine about losing profits because of Internet file swapping.
John Stith is a staff writer for WebProNews covering technology and business.