Under the agreement, SONY BMG MUSIC ENTERTAINMENT, one of the world's leading record companies and owner of a number of major record labels, has agreed to stop making payments and providing expensive gifts to radio stations and their employees in return for "airplay" for the company's songs.
Such payoffs violate state and federal law.
On the heels of this revelation, the Federal Communications Commission has decided to open a probe into payola and/or payola-like practices between the radio and music businesses.
F.C.C. Chairman, Kevin J. Martin issued this statement:
I am very concerned about the activities that led the New York Attorney General to investigate Sony BMG Music Entertainment and ultimately resulted in a settlement agreement with that company.The FCC has longstanding rules prohibiting payola. These rules serve the important purpose of ensuring that the listening public knows when someone is seeking to influence them. Broadcasters must comply with these rules. The Commission will not tolerate non-compliance. While payola may not be a widespread practice in the broadcasting industry, to the extent it is going on, it must stop.
I have directed the Enforcement Bureau to review the settlement agreement reached by Sony BMG and the New York Attorney General and investigate any incidents in which the agreement discloses evidence of payola rule violations. If the Bureau determines violations of the payola rules have occurred, the Commission will take swift action. In addition, if the Bureau is presented with evidence of payola rule violations outside of the Sony BMG Music Entertainment settlement, it is to thoroughly investigate those complaints as well.
In addition, F.C.C. Commissioner Jonathan Adelstein added:
I believe this payola scandal may represent the most widespread and flagrant violation of any FCC rules in the history of American broadcasting. Mr. Spitzer’s office has collected a mountain of evidence on the potentially illegal promotion practices of not only Sony BMG, but also other major record companies, independent promoters and several of the largest radio station groups.The airwaves belong to the public, not the highest bidder. The vitality of radio is sapped when music is selected based on bribes rather than merit. Radio listeners are deprived of hearing the freshest music, local artists and creative genius because the labels are predetermining what they get to hear -- and paying to get it played. We owe it to the American public, music lovers and creative artists – the ones who are hurt the most – to end this deception.
