FOUR READY TO FESS UP TO PAYOLA? Ken Tucker – Billboard Four major broadcasters are talking to the FCC about financial settlements in regards to that agency’s investigation into alleged payola violations, according to various media reports.
Clear Channel, CBS Radio, Citadel and Entercom have recently been in talks with the commission, which said in August 2005 that it had begun an investigation into whether stations violated rules that require disclosure of payments for airing songs, according to unnamed sources cited by Reuters.
An FCC official confirmed to Reuters that settlement talks were taking place, but declined to comment further.
Representatives of Clear Channel, CBS, Citadel and Entercom declined to comment on the talks.
As previously reported, New York state attorney general Eliot Spitzer recently sued Entercom for alleged payola violations. Entercom responded to the early March filing by saying it was confident a court will "fully and fairly" resolve the claims of payola leveled against the radio group by Spitzer’s office.
The discussions include possible payments by the companies to settle the investigation, with proposed payments reportedly in the area of $1 million. But negotiations have bogged down over how large a fine the companies should pay and what constitutes improper on-air promotion, according to a story in the Los Angeles Times.
Commissioner Jonathan Adelstein is reportedly pushing for penalties that could exceed $10 million per company.
The settlement talks were on a fast track but now have slowed, the Reuters report says. The companies involved have reportedly asked to see the evidence that Spitzer turned over to the FCC last year. But federal officials, citing a confidentiality agreement with Spitzer's office, have refused to provide anything beyond summaries of wrongdoing.
Another disagreement centers on the FCC's contention that the practice of giving radio stations CDs, concert tickets and other goods in exchange for mentioning upcoming concerts and album releases, violates federal regulations unless the deals are disclosed on the air, according to the Times story.
Federal regulations generally require broadcasters to tell listeners when promotions have been paid for so that they do not confuse advertisements with unpaid editorial content.
Last year, Clear Channel said it had fired two programmers following an internal probe into payola. It also admitted to discovering evidence of inappropriate conduct in other instances and disciplined those responsible.
While never named by the company, it is widely believed that R&B/hip-hop WWPR (Power 105.1) New York PD Michael Saunders and mainstream top 40 KHTS (Channel 933) San Diego PD Diana Laird were the two employees fired by the company.
The FCC initiated the most recent talks, according to Reuters. |