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New York (pte046/26.07.2005/15:50) - Following a year-long investigation into Sony BMG's http://www.bmg.com aggressive and underhanded tactics to garner airplay for its artists, the company has agreed to pay $10m (8.2m euros) to settle allegations that it used 'payola' tactics to bribe radio stations.
Payola, a term used to describe the inducements that record companies use to have their artists' music played, became illegal in 1960 following a scandal in the 1950s. Tactics include showering radio programmers with gifts, expensive holidays or electronic goods, and even paying the stations' expenses.
New York state attorney general Eliot Spitzer uncovered the BMG scandal. The hard-nosed lawyer has made his name as a battler of corruption on Wall Street, in the drug industry and among insurers.
"Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, airtime is often determined by undisclosed payoffs to radio stations and their employees," Spitzer said. "This agreement is a model for breaking the pervasive influence of bribes in the industry."
One of the many examples that Spitzer dug up for the investigation was that Sony BMG paid $4,000 to send executives of the station WKSE on a trip to Miami when the company wanted airplay for Franz Ferdinand in Buffalo, New York. Another was an email from a record company employee who begged a Clear Channel programmer by saying: "What do I have to do to get Audioslave on WKSS this week? Whatever you can dream up, I can make it happen."
Other record companies, such as EMI and Warner Music, are also being investigated, the two firms having already handed over documents to Spitzer.
Sony BMG, the second-largest music company worldwide, issued a statement admitting to "improper conduct" and acknowledged, "that various employees pursued some radio promotion practices on behalf of the company that were wrong and improper, and apologises for such conduct".
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