[Dixielandjazz] ANOTHER PAYOLA SETTLEMENT IN NEW YORK STATE

[Steve barbone]

New York State has gotten the big bucks in fines from Warner, Sony and now
Universal for paying radio stations to play songs. Now they have a suit
against a major broadcaster, Entercom. And ongoing investigations of record
company EMI and broadcasters Clear Channel and CBS.

Now if they'd only sue ASCAP and BMI for intimidation under the RICO
statutes, we might all get a break from the greed in the music business.

Cheers,
Steve Barbone

Universal Music Settles Big Payola Case

NY TIMES - By JEFF LEEDS - May 12, 2006

The Universal Music Group, the world's biggest music company, has agreed to
pay $12 million to settle accusations that executives paid radio programmers
to play songs, according to a settlement announced yesterday. It is the
largest settlement yet in an investigation by the New York attorney general
that has shaken the music business.

The office of the attorney general, Eliot Spitzer, said in documents
released yesterday that Universal, a unit of Vivendi, had used a broad array
of illegal "pay for play" tactics to secure airplay for its music, including
bribing programmers with laptop computers, tickets to sporting events and
luxury hotel stays.

Mr. Spitzer's office has been examining whether the four corporations that
dominate the music industry have violated federal or New York state laws
that prohibit payments of cash or anything of value to radio programmers for
airplay unless the transaction is disclosed to listeners.

Last year, the authorities settled with Warner Music Group for $5 million
and Sony BMG Music Entertainment for $10 million in similar arrangements. In
March, Mr. Spitzer sued one of the nation's biggest radio broadcasters,
Entercom Communications, accusing it of trading airplay for money, after
settlement discussions faltered.

In an interview, Mr. Spitzer said the "uniformity" of record executives'
conduct, reflected in e-mail messages and other documents uncovered in
earlier settlements, "speaks to the understanding in the industry that radio
play is the best way to motivate sales, and folks would do what needed to be
done to get the airtime."

Mr. Spitzer's office is still investigating the smallest of the four record
corporations, the EMI Group, as well as several radio companies, including
Clear Channel Communications and CBS Radio (formerly Infinity
Broadcasting.). The Federal Communications Commission has also requested
documents from the radio companies as part of a separate inquiry.

Universal said in a statement that it had been working "cooperatively" with
Mr. Spitzer's office and was "pleased to have completed the process with
this agreement." Universal said the reforms it agreed to are "consistent
with" policies it instituted more than a year ago.

As part of the accord, the company agreed to discontinue certain practices ‹
including providing cash for radio contests, and using middlemen known as
independent promoters to funnel money to stations.

Settlement documents released yesterday offer examples of how executives at
the company's various labels ‹ Interscope Records, Island Def Jam Music
Group, Universal/Motown Records and Universal South ‹ offered enticements or
used other tactics to gain airplay for their artists' songs. In some cases,
the documents say, Universal tried to disguise payoffs to programmers as
gifts to radio contest winners.

The documents say Universal twice paid for hotel accommodations in Miami for
Donnie Michaels, then the program director of WFLY-FM in Albany, in exchange
for his addition of songs by Brian McKnight and Nick Lachey to his station's
playlist. In April 2004, Universal provided Mr. Michaels ‹ by then a
programmer at WHYI-FM in Miami ‹ with a New York hotel room and New York
Yankees tickets. The company booked the room under a false name and used a
false Social Security number to conceal the transaction, the document
states. 

In testimony for the attorney general's office, Universal executives
admitted providing hotel rooms, tickets to sports events and concerts to
radio programmers for their personal use. Universal also paid for radio
stations' operating expenses ‹ like a bill for Web site maintenance ‹ to
obtain airplay for acts like the rap duo Big Tymers, Lindsay Lohan and the
late hip-hop performer Aaliyah, according to the settlement papers.

At the same time Universal wooed programmers with gifts to add songs, the
documents say, it also tried to deceive certain stations' personnel into
believing a new song was deserving of more airplay.

Executives at the company sometimes tried to inflate the performance of a
song on the charts monitored by radio programmers by openly buying airtime
on certain stations. And the company hired outside consultants to manipulate
call-in request lines.

In one e-mail message released by Mr. Spitzer's office, a Universal
executive asked an outside company to place "curiosity calls," inquiring
about a new Ludacris single, to dozens of stations. "Calls should be 75
percent female, 25 percent male 18-24 years old," the e-mail said.

Even with yesterday's settlement, Universal still faces accusations of
misconduct in the promotion department at its New York-based Universal
Records label. 

In a lawsuit filed in Los Angeles Superior Court last year, two independent
promoters accused Universal of instructing them to submit false bills so
that overdue payments to the promoters could be processed. As a result, the
lawsuit claims, expenses were charged to certain Universal acts, like the
rapper Nelly and the singer Paulina Rubio, when the promoters had been
pushing songs for Lil' Romeo and Big Tymers.

The lawsuit also contends that Universal executives pressed certain radio
stations to sever their relationships with the promoters ‹ including
National Music Marketing ‹ and instead work with others, including the
husband of an executive who was then Universal's top radio promotion
official. Universal has denied the accusations.