Sony BMG settles NY radio probe for $10 million
NEW YORK (Reuters) – Sony BMG, the world’s largest music
company, will pay $10 million to settle a New York State probe
into the way the music company influenced which songs were
played on the radio, Attorney General Eliot Spitzer said on
Monday.
Spitzer has served the four top record companies –
Universal Music Group, EMI Group Plc, Warner Music Group Corp.
and Sony BMG — with subpoenas demanding information on
so-called payola, sources familiar with the matter have said.
The investigation centers on a long-standing practice of
paying independent promoters to help secure valuable airtime
for songs — also known as “payola.” Under the Sony BMG
settlement, the company agreed to stop making payments to radio
stations in exchange for airplay, Spitzer said.
“Our investigation shows that contrary to listener
expectations that songs are selected for airplay based on
artistic merit and popularity, air time is often determined by
undisclosed payments to radio stations and their employees,”
Spitzer said at a press briefing.
Spitzer also issued subpoenas to radio companies, such as
Clear Channel Communications Inc., Viacom Inc.’s Infinity
Broadcasting, and Cox Radio Inc. All three have banned the use
of independent promoters.
Asked for comment, an EMI spokeswoman referred to a
statement by the company in its annual report, which confirmed
Spitzer’s investigation into the promotion of records on New
York stations and said it was cooperating with the inquiry.
“EMI has a long-standing, strict written policy prohibiting
unlawful radio promotion practices,” the company said. “EMI is
not currently aware of any reason for believing that there will
be a material financial impact on the Group.”
Clear Channel said, “We are cooperating fully with Mr.
Spitzer’s office, and expect our practices will be found to be
completely compliant with the law.” Infinity declined to
comment other than to say its stations do not use independent
promoters. Cox Radio was not immediately available to comment.