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Sony BMG Settles New York State Lawsuit for $10 Million

Posted on: Tuesday, 26 July 2005, 12:01 CDT

Jul. 26--Music giant Sony BMG has agreed to pay $10 million and halt "wrong and improper" radio promotion practices that the state attorney general's office said included bribes of electronics, vacations and sports and concert tickets in exchange for airplay of its artists' songs.

The settlement, announced yesterday by New York Attorney General Eliot Spitzer, is the first agreement reached in his office's yearlong investigation into the pay-for-play practices of recording companies and radio stations.

"Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, airtime is often determined by undisclosed payoffs to radio stations and their employees," Spitzer said in a statement.

In a Manhattan news conference yesterday, Spitzer called for a Federal Communications Commission investigation into the practice. At least one FCC commissioner, Democra Jonathan Adelstein, agreed, saying yesterday that it's unfair if a song gets airplay "because someone was paid off, not because it's good music." He said he has asked Spitzer to share his evidence with the agency.

Documents released by Spitzer's office show employees of Manhattan-based Sony BMG's record labels -- which include Epic, Columbia, Arista and Jive -- arranging for Celine Dion concert tickets, digital cameras, plane tickets and hotel rooms for radio station workers. In one e-mail, a record company employee, upset that stations were playing Dion's song "I Drove All Night" only during overnight hours when audiences are smallest, threatened to cancel giveaway trips to see Dion perform in Las Vegas for any station that didn't fix the problem.

Another employee, promoting the group Audioslave, wrote in an e-mail to a Clear Channel programmer: "WHAT DO I HAVE TO DO TO GET AUDIOSLAVE ON WKSS THIS WEEK?!!? Whatever you can dream up, I can make it happen!!!"

In a statement, Sony BMG -- which was formed through the merger of Sony Corp. and Germany's Bertelsmann AG -- said that, despite being illegal, payola "has continued to be an unfortunately prevalent aspect of radio promotion. Sony BMG acknowledges that various employees pursued some radio promotion practices on behalf of the company that were wrong and improper, and apologizes for such conduct."

Spitzer said his investigation of other companies continues. Since the start of the probe, the other three major record labels -- Warner Music, EMI Group and Universal Music Group -- also acknowledged receiving subpoenas, as have radio companies Clear Channel Communications, Infinity Broadcasting, Entercom Communications Corp. and Cox Radio.

Spitzer said the $10 million payment from Sony BMG would fund not-for-profit music education and appreciation programs.

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Source: Newsday, Melville, N.Y.

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