Monday, April 16, 2007

Broadcasters to Pay $12.5 Million for "Possible" Payola Violations


Washington, D.C. – The Federal Communications Commission (FCC) today released Ordersadopting Consent Decrees with CBS Radio, Citadel Broadcasting Corporation, Clear Channel Communications, Inc. and Entercom Communications Corp. (collectively, “the broadcasters”).

Under the Consent Decrees, the broadcasters agree to pay a combined $12.5 million to close investigations into each broadcaster’s possible violations of the Commission’s sponsorship identification rules for the practice commonly referred to as “payola.” Specifically, the Consent Decrees resolve allegations that the broadcasters may have accepted cash or other valuable consideration from record labels in exchange for airplay of artists from those labels, without disclosing those arrangements.

In addition to the $12.5 million in voluntary contributions, the broadcasters agree to implement certain business reforms and compliance measures. Key provisions of the Consent Decrees include:

* Prohibition on company stations and employees exchanging airplay for cash or other items of value except under specified conditions

* Limits on gifts, concert tickets, and other valuable items from record labels to company stations or employees

* Appointment of Compliance Officers and market-level Compliance Contacts responsible for monitoring and reporting company performance under the Consent Decrees

* Regular training of programming personnel on payola restrictions These and other measures by the broadcasters should ensure their future compliance with the sponsorship identification rules.

Action by the Commission on March 21, 2007, by Order (FCC 07-29), Order (FCC 07-28), Order (FCC 07-27), and on March 23, 2007, by Order (FCC 07-42). Chairman Martin and Commissioners Copps, Adelstein, Tate, and McDowell, with Chairman Martin, Commissioners Copps, Adelstein, Tate, and McDowell issuing separate statements.

Enforcement Bureau media contact: Janice Wise at (202) 418-7450

The consent decree by the four companies can be read below. The statements by the FCC Commissioners are very damning and worth a read. For example, Commissioner Copps had this to say:

While we celebrate these efforts, we cannot forget what led us down this road. How we got here—how we allowed music on free, over-the-air radio to be hijacked by a band of pay-for-play promoters—is a tale worth telling. If I were to give this tale a title, I would call it “The Way the Music Died.” It didn’t happen in a day or a month or a year. But two culprits combined to all but slay local and independent music on the radio dial.

CBS RADIO, INC. Adopted a Consent Decree in this proceeding. Action by: the Commission. Adopted: 03/21/2007 by ORDER. (FCC No. 07-27). EB FCC-07-27A1.doc FCC-07-27A2.doc FCC-07-27A3.doc FCC-07-27A4.doc FCC-07-27A5.doc FCC-07-27A6.doc FCC-07-27A1.pdf FCC-07-27A2.pdf FCC-07-27A3.pdf FCC-07-27A4.pdf FCC-07-27A5.pdf FCC-07-27A6.pdf FCC-07-27A1.txt FCC-07-27A2.txt FCC-07-27A3.txt FCC-07-27A4.txt FCC-07-27A5.txt FCC-07-27A6.txt

CITADEL BROADCASTING CORP. Adopted a Consent Decree in this proceeding. Action by: the Commission. Adopted: 03/21/2007 by ORDER. (FCC No. 07-28). EB FCC-07-28A1.doc FCC-07-28A2.doc FCC-07-28A3.doc FCC-07-28A4.doc FCC-07-28A5.doc FCC-07-28A6.doc FCC-07-28A1.pdf FCC-07-28A2.pdf FCC-07-28A3.pdf FCC-07-28A4.pdf FCC-07-28A5.pdf FCC-07-28A6.pdf FCC-07-28A1.txt FCC-07-28A2.txt FCC-07-28A3.txt FCC-07-28A4.txt FCC-07-28A5.txt FCC-07-28A6.txt

ENTERCOM COMMUNICATIONS, CORP. Adopted a Consent Decree in this proceeding. Action by: the Commission. Adopted: 03/23/2007 by ORDER. (FCC No. 07-42). EB FCC-07-42A1.doc FCC-07-42A2.doc FCC-07-42A3.doc FCC-07-42A4.doc FCC-07-42A5.doc FCC-07-42A6.doc FCC-07-42A1.pdf FCC-07-42A2.pdf FCC-07-42A3.pdf FCC-07-42A4.pdf FCC-07-42A5.pdf FCC-07-42A6.pdf FCC-07-42A1.txt FCC-07-42A2.txt FCC-07-42A3.txt FCC-07-42A4.txt FCC-07-42A5.txt FCC-07-42A6.txt

CLEAR CHANNEL COMMUNICATIONS, INC. Adopted a Consent Decree in this proceeding. Action by: the Commission. Adopted: 03/21/2007 by ORDER. (FCC No. 07-29). EB FCC-07-29A1.doc FCC-07-29A2.doc FCC-07-29A3.doc FCC-07-29A4.doc FCC-07-29A5.doc FCC-07-29A6.doc FCC-07-29A1.pdf FCC-07-29A2.pdf FCC-07-29A3.pdf FCC-07-29A4.pdf FCC-07-29A5.pdf FCC-07-29A6.pdf FCC-07-29A1.txt FCC-07-29A2.txt FCC-07-29A3.txt FCC-07-29A4.txt FCC-07-29A5.txt FCC-07-29A6.txt

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