March 8, 2006
Spitzer sues Entercom in radio payola probe
NEW YORK (Reuters) - In his first lawsuit to stop a radio
practice known as payola, New York Attorney General Eliot
Spitzer on Wednesday said he sued Entercom Communications
Corp., accusing the radio broadcaster of accepting payoffs in
exchange for airplay.
Spitzer accused Entercom, one of the biggest U.S. radio
broadcasters, of trading air time for gifts, promotional items
and personal trips, and soliciting and accepting payments from
record labels to play the music of such artists as Avril
Lavigne, Liz Phair and Jessica Simpson.
He accused Entercom executives of being "closely involved"
in illegal practices. "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," Spitzer said in a statement.
Entercom referred calls to an outside spokesman, who did
not immediately return a call seeking comment. Spitzer, a 2006
Democratic gubernatorial candidate in New York, also did not
immediately return a call for comment. He filed the lawsuit
with New York State Supreme Court in Manhattan.
Last year, Sony BMG agreed to pay $10 million and Warner
Music Group Corp. agreed to pay $5 million to settle similar
probes by Spitzer.
The attorney general has also issued subpoenas to such
radio broadcasters as Clear Channel Communications Inc., Cox
Radio Inc. and CBS Corp.'s CBS Radio, once known as Infinity
Entercom, based in Bala Cynwyd, Pennsylvania, operates in
many large U.S. metropolitan areas, including Boston, Denver
and Seattle. It owns and operates stations in Buffalo and
Rochester, New York.
Entercom shares fell 11 cents to $28.65 in morning trading
on the New York Stock Exchange.