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CHR Embroiled in Payola Scandal

D

dampier

Elliot Spitzer does the FCC's job...

The widening payola scandal is going to result in some massive fines and perhaps even some indictments against on air talent, station and record company personnel, and a delightful revisiting of some tax returns by the IRS.

You can't get more egregious than actually sending out rate cards to DJs telling them how much cash they'll get in return for record spins. No matter why CHR playlists often bite, and people run screaming for their iPods...

http://www.oag.state.ny.us/press/2005/jul/payola2.pdf
 
Most of that document isn't qualified as "PAYOLA."

Doing a Celine flyaway because you add her record, that's the way we have to do business, and I don't think that the PUBLIC, which is who Eliot works for, would disagree. Jocks taking PERSONAL gifts (adidas shoes) that is PAYOLA only if the Adidas shoes were PURCHASED and then given, and then only if it had anything to do with airplay directly.

IN all actuality Eliot should have gone after an industry that has alot more at stake, drugs. The drug companies are giving kick backs to physicians who are writing scripts for their particular drugs. That's a little more dangerous than manipulation of playlists by providing radio stations with a few promotions to bring to their listeners.

Eliot, do the public a favor and pick on someone who is putting lives at stake. Or are you getting kick backs from them too??
 
> Most of that document isn't qualified as "PAYOLA."

Oh PLEASE... Helen Keller can see payola all over that document. Rate cards with payment for play? Not payola? Free laptops? Not payola? Threatening to yank payments for dumping their artists on the overnight? Not payola?

> Doing a Celine flyaway because you add her record, that's
> the way we have to do business, and I don't think that the
> PUBLIC, which is who Eliot works for, would disagree.

That is nonsense. You don't have to fly to NY first class, with limo service, and top notch hotel accoms just to get a chance to sit in the guest section at a Celine concert. If you get free tickets, that's fine, but pay your own way, especially when there is documentation all over the place that getting such perks is dependent on you adding an artist to rotation or giving it spin support. The public is not going to be as forgiving as you suspect, especially when the documents show DJs getting first class treatment while actual listener prize winners get "cheap" transportation and bargain basement accomodations.

> Jocks taking PERSONAL gifts (adidas shoes) that is PAYOLA only if
> the Adidas shoes were PURCHASED and then given, and then
> only if it had anything to do with airplay directly.

You glossed over the freebie laptop, the personal CD player, the TVs, and cash payments that Sony staffers got approval to purchase, with company cards, to send to DJs in return for spin support. Nobody has a problem with free shoes or bars of soap, or candy, or stickers, or pens. Spitzer has a problem with items that are valued well above that.

> IN all actuality Eliot should have gone after an industry
> that has alot more at stake, drugs. The drug companies are
> giving kick backs to physicians who are writing scripts for
> their particular drugs. That's a little more dangerous than
> manipulation of playlists by providing radio stations with a
> few promotions to bring to their listeners.

If there is dirt to be found there, he'll go after them too. He seems to be doing to job the current administration's regulatory bodies can't or won't.

> Eliot, do the public a favor and pick on someone who is
> putting lives at stake. Or are you getting kick backs from
> them too??

There are some lousy artists whose excessive bought and paid for airplay has probably caused several suicides from despairing listeners, so the lives saved may be countless.

Seriously, you could make the same argument about virtually any white collar crime - Enron ripoffs don't kill people, pump and dump schemes don't draw blood, insurance scams just lighten your wallet a little. It doesn't matter. When any industry is caught so egregiously violating the law (and Sony's $10 million quickie settlement is testament to just how seriously they took it), heads should roll. When the rest of the dust is settled (Universal, BMG, etc.), it will be very interesting to see just how much commercial radio in this country is about as upstanding as a Saturday night streetwalker.
 
Payola vs. Added Value

Here's a novel thought...

Since the FCC's cracking down on "payola," when will some government agency crack down on "added value?"

Record companies giving goodies to stations for contests/station employees as a 'thank you' for playing a record...


Radio/TV stations giving bonus airtime/promotional time for client (who INSISTS on added value now) as a 'thank you' for doing business with them.


I see too many similarities.
 
> Oh PLEASE... Helen Keller can see payola all over that
> document. Rate cards with payment for play? Not payola?
> Free laptops? Not payola? Threatening to yank payments for
> dumping their artists on the overnight? Not payola?
No I agree there is quite a bit of "PAYOLA"esque activities going on, but being comitted by a couple of people. ALOT of what you see in those documents is VAILD PROMOTIONAL SUPPORT, not Payola.

> That is nonsense. You don't have to fly to NY first class,
> with limo service, and top notch hotel accoms just to get a
> chance to sit in the guest section at a Celine concert. If
> you get free tickets, that's fine, but pay your own way,
> especially when there is documentation all over the place
> that getting such perks is dependent on you adding an artist
> to rotation or giving it spin support. The public is not
> going to be as forgiving as you suspect, especially when the
> documents show DJs getting first class treatment while
> actual listener prize winners get "cheap" transportation and
> bargain basement accomodations.
REALLY?!? You apparently are missing my definition of a "FLYAWAY," which is meant as a promotinal giveaway to a listener. In particular, the Celine flyaway I don't remember seeing anything about a programmer going on the trip. I do see plenty about doing flyaways for listeners, in exchange for an add. VALID PROMOTIONAL SUPPORT.

> You glossed over the freebie laptop, the personal CD player,
> the TVs, and cash payments that Sony staffers got approval
> to purchase, with company cards, to send to DJs in return
> for spin support. Nobody has a problem with free shoes or
> bars of soap, or candy, or stickers, or pens. Spitzer has a
> problem with items that are valued well above that.
No I pointed out a particular GREY situation, a plasma TV, laptop, etc. are payola, but I think a $150 walkman is digging a bit. That is merely a thanks for your help.

> There are some lousy artists whose excessive bought and paid
> for airplay has probably caused several suicides from
> despairing listeners, so the lives saved may be countless.
Spare me the political commentary, be factual, not a smart ass.

> Seriously, you could make the same argument about virtually
> any white collar crime - Enron ripoffs don't kill people,
> pump and dump schemes don't draw blood, insurance scams just
> lighten your wallet a little. It doesn't matter. When any
> industry is caught so egregiously violating the law (and
> Sony's $10 million quickie settlement is testament to just
> how seriously they took it), heads should roll. When the
> rest of the dust is settled (Universal, BMG, etc.), it will
> be very interesting to see just how much commercial radio in
> this country is about as upstanding as a Saturday night
> streetwalker.
It's funny you use the big word "egregiously" to make it sound worse than it is. Like I said above, about 80% of the documents presented are A) OLD AND OUTSIDE OF THE STATUTE OF LIMITATIONS FOR THIS LAW VIOLATION B) VALID PROMOTIONAL SUPPORT INVOLVING THE LISTENERS NOT THE PROGRAMMERS BEING THE RECIEVER OF SAID GIFTS and finally C) ALOT LESS OF A THREAT THAN MANY PRACTICES OTHER INDUSTRIES ARE USING AND ABUSING.

Yes, there is violation of laws included in the documents, but they involve REALLY just three people, Diana Laird (KHTS/San Diego PD), Donnie Michaels (now WHYI/Miami APD) and Dave Universal (former WKSE/Buffalo PD). The rest of it was VALID and not by definition "PAYOLA." The "RATES" you're speaking of is merely budget discussion for record companies assisting stations with giveaways, but most of what they are discussing was from the days of indie promoters. Those guys gave money towards specific promotional items and events, again NOT PAYOLA. Besides INDIES charged more for specific stations, because of the difficulty that they had with some stations (more conservative Top 40s) in getting some records added. That's how they made money, not the stations the indies. They were merely salesmen, sent in to CLOSE the deal. It's like a radio rep taking a client to lunch to close a spot buy, and then throwing them "ADDED VALUE" to sweeten the deal. I have a client now that is buying time on my station for a concert, and I'm giving him an additional $30K in promos for his show since it is ours, is that play or plug-ola?? NO!!! Law is written in a technical form, in order to see where it was broken in these documents, you must READ BETWEEN THE LINES, it's not always black and white, there is alot of grey and green.
 
> REALLY?!? You apparently are missing my definition of a
> "FLYAWAY," which is meant as a promotinal giveaway to a
> listener. In particular, the Celine flyaway I don't remember
> seeing anything about a programmer going on the trip. I do
> see plenty about doing flyaways for listeners, in exchange
> for an add. VALID PROMOTIONAL SUPPORT.

Spitzer's office discovered that those trips and prizes often intended for listeners actually went to program directors, under the guise of being a listener prize. When actual listeners went, they might as well have bought them Amtrak tickets for all they spent on them.

> No I pointed out a particular GREY situation, a plasma TV,
> laptop, etc. are payola, but I think a $150 walkman is
> digging a bit. That is merely a thanks for your help.

$150 is payola. $15 is not. It doesn't pass the sniff test, and Sony and Spitzer agreed, admitting the Sony Walkman was part of the reason Sony had to pay $10 million to settle.

> It's funny you use the big word "egregiously" to make it
> sound worse than it is. Like I said above, about 80% of the
> documents presented are A) OLD AND OUTSIDE OF THE STATUTE OF
> LIMITATIONS FOR THIS LAW VIOLATION B) VALID PROMOTIONAL
> SUPPORT INVOLVING THE LISTENERS NOT THE PROGRAMMERS BEING
> THE RECIEVER OF SAID GIFTS and finally C) ALOT LESS OF A
> THREAT THAN MANY PRACTICES OTHER INDUSTRIES ARE USING AND
> ABUSING.

Spitzer and Sony disagree. In fact, criminal referrals are now being made by the criminal enforcement division against the NY players in all this, so apparently they're not outside any statute of limitations. People are very likely going to face criminal indictments very soon, and there is much, much more to follow. Remember, this is -only- NY state and one record company. At least a dozen other state Attorney Generals are now also beginning to investigate this, and every one will extract their piece. This will be a $100,000,000 scandal when it's all over.

> Yes, there is violation of laws included in the documents,
> but they involve REALLY just three people, Diana Laird
> (KHTS/San Diego PD), Donnie Michaels (now WHYI/Miami APD)
> and Dave Universal (former WKSE/Buffalo PD). The rest of it
> was VALID and not by definition "PAYOLA." The "RATES" you're
> speaking of is merely budget discussion for record companies
> assisting stations with giveaways, but most of what they are
> discussing was from the days of indie promoters.

This was for cash money and checks made out directly to the program directors involved, as late as early last winter. That's why the IRS has been given information on the people involved to reopen their tax returns and see if they claimed that money on their taxes (guess what the odds of that are).

> I have a client now that is buying time on
> my station for a concert, and I'm giving him an additional
> $30K in promos for his show since it is ours, is that play
> or plug-ola??

That sounds like paid air time to me, not payola. If that client paid you $30k to add Artist X to your rotation with a minimum number of spins, that would be payola and I'd recommend getting a lawyer as quickly as possible.

> NO!!! Law is written in a technical form, in
> order to see where it was broken in these documents, you
> must READ BETWEEN THE LINES, it's not always black and
> white, there is alot of grey and green.

Not apparently to Sony, which rushed to settle as quickly as possible for $10 million dollars. Evidently their lawyers saw something you didn't.
 
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