WARNER SETTLES WITH SPITZER

Ken Tucker – Billboard

Warner Music Group has become the second major label to settle with New York attorney general Eliot Spitzer’s office in its ongoing payola investigations.

Warner has agreed to abandon the practice of providing radio stations and their employees with financial incentives and promotional items in exchange for airplay of its recordings. The company has also agreed to provide $5 million for distribution to New York State not-for-profits that fund programs aimed at music education and appreciation.

"Warner is the second major player in the music industry to come forward and acknowledge that these practices are wrong," Spitzer said in a statement. "Unfortunately, other companies continue to engage in them. I applaud Warner’s decision to halt this conduct, cooperate fully with my office, and adopt new business practices."

According to Spitzer's office, the payola took several forms:

• Direct bribes to radio programmers, including airfare, electronics, tickets to premier sporting events and concerts;

 

• Payments to radio stations to cover operational expenses;

 

• Radio contest giveaways for stations' listening audiences, including flyaways, concert tickets, iPods, gift certificates and gift cards;

 

• Hiring independent promoters to act as conduits for illegal payments to radio stations;

 

• Purchasing "spin programs" to artificially increase the airplay of particular recordings.

Warner, building on guidelines it issued earlier this year in response to Spitzer's investigation, has agreed to stop making payoffs in return for airplay and to make full disclosure of all items of value provided to radio stations.

Last summer, Spitzer entered into a similar settlement with Sony BMG.

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