Fine paid in case of payola

 

Sony BMG to stop bribing stations

By ERIN MCCLAM
Associated Press
7/26/2005

 

NEW YORK - Recording industry titan Sony BMG Music Entertainment agreed Monday to pay $10 million and to stop bribing radio stations to feature its artists in what a state official called a more sophisticated generation of the payola scandals of decades ago.

The agreement springs from an investigation by New York State Attorney General Eliot Spitzer, who called the practice "pervasive" in the industry and suggested other music industry giants could face similar penalties.

Pay-for-play "is driving the industry, and it is wrong," Spitzer told reporters.

Sony BMG, whose various labels include hundreds of artists from Aretha Franklin and Tony Bennett to Beyonce Knowles and the Dixie Chicks, said in a statement some of its employees had engaged in "wrong and improper" practices.

The company said it looked forward to "defining a new, higher standard in radio promotion" but did not say whether it had fired or disciplined any of those employees. A spokeswoman did not immediately return a call for further comment.

The former program manager at Buffalo radio station WKSE-FM "Kiss" 98.5, Dave Universal, was cited in the investigation and in documents released Monday by Spitzer's office.

An e-mail sent by a promotion executive at Sony BMG's Epic Records states that the company bribed Universal with nearly $5,000 in gifts to get him to play the songs of Epic artists.

"Two weeks ago, it cost us over 4000.00 to get Franz (Ferdinand) on WKSE. That is what the four trips to Miami and hotel cost. . . . At the end of the day, (David) Universal added GC (Good Charlotte) and Gretchen Wilson and hit Alex up for another grand and they settled for $750.00. So almost $5000.00 in two weeks for overnight airplay," the e-mail, sent from one Epic executive to another and obtained by investigators, states.

Universal, who had earned a national reputation for his ability to identify hit records, was fired by Entercom Communications Corp., which owns WKSE, on Jan. 3. The company said he violated its conflict-of-interest policy.

In a statement released Monday, Entercom said that its policies bar any payola arrangements and the company is cooperating with the attorney general's investigation.

Universal's lawyer, Michael P. Stuermer, did not return a message seeking comment on the accusation against his client.

In an interview with The Buffalo News shortly after losing his job, Universal said his actions with the labels were common within the industry and did not influence his decision on what records to play.

"You have to build up a relationship," Universal said, and having a label take him to a New York Yankees game or on a trip to Miami was considered part of the job.

A 1960 federal law and related state laws bar record companies from offering undisclosed financial incentives in exchange for airplay. The practice was called "payola," a contraction of "pay" and "Victrola," the old windup record player.

Associated Press writer Michael Gormley in Albany and News Staff Reporter Stephen T. Watson contributed to this report.