RADIO IN TALKS TO SETTLE FCC PAYOLA PROBE Sue Zeidler and Jeremy Pelofsky – Reuters Four big radio station chains have been in talks with U.S. regulators to settle their investigation into secret payments made in exchange for airplay, sources familiar with the matter said on Friday.
Representatives from Clear Channel Communications Inc., CBS Corp., Citadel Broadcasting Corp. and Entercom Communications Corp. met this month with Federal Communications Commission officials, three sources said, declining to be identified further.
The discussions included possible payments by the companies to the U.S. government to settle the investigation, two of the sources close to the matter said. Some of the companies offered $1 million each and one offered slightly higher, but they are awaiting feedback from the FCC, one of the sources said.
Secret payments are known as payola, a contraction of "pay" and the old "Victrola" record player, and are illegal under a number of U.S. laws.
An FCC official confirmed settlement talks were taking place.
The FCC said in August it had begun an investigation into whether stations violated rules that require disclosure of payments for airing songs.
It followed an extensive investigation by New York Attorney General Eliot Spitzer, who urged the FCC to take action against radio stations that violate regulations on airplay.
Initially, the FCC settlement talks were on a fast track but now have slowed because the radio companies asked to see the evidence obtained from Spitzer before proceeding with settlement talks, one of the sources said, adding that the FCC initiated the talks.
"We can't comment on any pending investigations but the FCC does take seriously its responsibility to investigate when we have evidence of possible violations of FCC rules," said FCC spokesman David Fiske.
Representatives of Clear Channel, CBS, Citadel and Entercom declined to comment on the talks.
FCC Chairman Kevin Martin said earlier this month that the agency had been in contact with many of the companies but declined to provide details about the investigation.
Spitzer, who is running for New York governor, earlier this month sued Entercom for accepting secret payments and accused company executives of being closely involved in the practices.
In that case, Spitzer cited a July 2003 e-mail from a program director at WKSE-FM in Buffalo to Columbia Records asking: "Do you need help on Jessica (Simpson) this week? ... If you don't need help, I certainly don't need to play it."
Clear Channel last year 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.
"Every employee who touches programming got the written rules of the road and were extensively trained on what they can and can't do," said Andy Levin, Clear Channel's chief legal officer.
Spitzer has also issued subpoenas to Clear Channel, Cox Radio Inc. and CBS. Last year, Sony BMG agreed to pay $10 million and Warner Music Group Corp. agreed to pay $5 million to settle similar probes by Spitzer. |