Elliot Spitzer Settles With Warner Brothers, slams former Buffalo PD

[johndavis]

As if the Sony stuff didn't hammer Dave Universal, here's an excerpt from Spitzer's documents on Warner.

Warner Music has provided radio station programmers with items of value in exchange for airplay. For example, Warner Music has paid to send David Universal, a former program director at WKSE in Buffalo, on a personal trip to Miami in order to have its music played. Warner Music has also provided Mr. Universal with a laptop computer, tickets to sporting events, concerts, and a host of other promotional items for his personal use.

According to Warner Music employees, Mr. Universal always required something in exchange for adding a song. An Atlantic Promotion Manager stated, "We all did business with Dave. We all had to do business with Dave if we were going to get our records on. And it was a game that you either played or you didn't have a shot at getting your records on the air."

<a target="_blank" href=http://www.oag.state.ny.us/press/2005/nov/Warner%20Music%20Group%20Corp.pdf>http://www.oag.state.ny.us/press/2005/nov/Warner%20Music%20Group%20Corp.pdf</a>

Also, this gem:

...A Warner Music local promotion manager testified that "...a lot of the Clear Channel stations that I deal with who have been without any real promotional budgets now for years are often some of the most active... WKKF in Albany, WWHT in Syracuse and WKGS in Rochester [a Citicaster station]... WPXY, an Infinity station in [Rochester, NY]"

<P ID="signature">______________
...co-moderator of the Satellite Radio, Phoenix, and San Diego boards...</P><P ID="edit"><FONT class="small">Edited by johndavis on 11/22/05 05:58 PM.</FONT></P>

 

[Mark_Giardina]

Reaction from Rochester Radio Listeners to the Spitzer Lawsuit

http://wroctv.com/video.asp?id=20738&q=hi&s=ns


For the second time this year, State Attorney General Eliot Spitzer announced a settlement with a major record company. Warner Music Group, the third largest in the country, has agreed to pay $5 million to settle the investigation. Earlier this year, Sony agreed to pay $10 million. Both companies admitted giving bribes, known as "payola," to radio stations in exchange for getting their songs on the air, a practice that is illegal under state and federal law.

The settlement has some local listeners questioning why some songs get seemingly endless rotation and others don't get on the air at all.

"Rochester seems to play the same songs continually over and over and over again," said Kelly Bauman.

"The same ten songs over and over again," said Jeff Suida.

"It's boring. I change the channel," said Stephanie Roosa.

"Anybody who has the illusion what you hear on Top 40 radio is based purely on popularity anymore is deluding themselves," said Scott Fybush, of Northeast Radio Watch.

One of the documents Spitzer used as evidence is an e-mail that mentions Rochester's WZNE, 94.1 The Zone. The e-mail describes how The Zone and other stations were pressured to play a band called The Used. Some stations were offered bribes, but the e-mail doesn't say if The Zone was offered or accepted any bribes.

As for WPXY, documents say the station received home stereo systems and tickets for a Lil' Kim concert. "Among the stations that have requested promotional support, a few stand out...WKGS...WPXY."

"It affects what you hear on the air. The whole idea of a Top 40 radio station is it's supposed to play the songs that are most popular. That popularity is supposed to be judged by what people are actually buying, not what record companies are paying to influence the list," said Fybush.

<P ID="signature">______________
"I won't be wronged, I won't be insulted and I won't be laid a hand on.
I don't do these things to other people and I expect the same from them".</P>

 

[Bob1370]

Re: Reaction from Rochester Radio Listeners to the Spitzer Lawsuit

> Excerpts from a Channel 8 News report:
> Both
> companies admitted giving bribes, known as "payola," to
> radio stations in exchange for getting their songs on the
> air, a practice that is illegal under state and federal law.
> The settlement has some local listeners questioning why some
> songs get seemingly endless rotation and others don't get on
> the air at all.
> "Anybody who has the illusion what you hear on Top 40 radio
> is based purely on popularity anymore is deluding
> themselves," said Scott Fybush, of Northeast Radio Watch.
> "It affects what you hear on the air. The whole idea of a
> Top 40 radio station is it's supposed to play the songs that
> are most popular. That popularity is supposed to be judged
> by what people are actually buying, not what record
> companies are paying to influence the list," said Fybush.

40 years ago, radio station managers followed the lead of WABC (New York) program director Rick Sklar, who installed rigid controls at his station (and at the entire ABC O&O chain) to make sure no record company could even get at the air personalities and music staff, much less give them goodies to influence airplay. He'd been an underling at WINS in the 50s and saw first-hand how payola had distorted the way that station did business...and didn't want to allow it to be repeated. And he was scrupulously honest himself, knowing that the integrity of his playlist was crucial to his station's popularity and credibility. PDs all over America followed his lead back then.

More recently, air personalities and music librarians have been left alone (everyone knows they have no control over what's played) but people in the PD's chair, or even higher up the management food chain, have been the ones with their hands out for favors, or demanding favors in behalf of the companies that employ them. If Mr, Spitzer's work is influential, he may be the guy who finally restores some balance to the system and makes the CHR format truly honest radio again.

 

[Element9]

Re: Reaction from Rochester Radio Listeners to the Spitzer Lawsuit

>
> More recently, air personalities and music librarians have
> been left alone (everyone knows they have no control over
> what's played) but people in the PD's chair, or even higher
> up the management food chain,

And here, you have struck the motherlode. The fish rots from the head down.

> have been the ones with their
> hands out for favors, or demanding favors in behalf of the
> companies that employ them.




> If Mr, Spitzer's work is
> influential, he may be the guy who finally restores some
> balance to the system and makes the CHR format truly honest
> radio again.
>

We can only hope, although there will be many who see Spizter's actions as feathering his political nest. Sadly.

Mr. U's counsel, might be greatly concerned about the IRS. Entercom's counsel may be concerned more about the FCC.

What are those licenses worth?

 

[mroz]

"One likes to believe in the freedom of music.
But glittering prizes and endless compromises
shatter the illusion of integrity."
- Rush, "Spirit of Radio"

Enough said.

 

[Joseph_Gallant]

Re: Reaction from Rochester Radio Listeners to the Spitzer Lawsuit

Scott Fybush (in a TV news report quoted in this thread) has some very interesting and excellent comments about Top-40/CHR radio.

What's the solution??

Just using the Billboard "Hot 100" chart to determine what are the hits and play the records listed in that chart??

Have playlist decisions for every station in a company broadcasting a certain format (i.e. Top-40) being determined by one person at Corporate (which would probably lead to one playlist for every station in the format)??

More listener input??

It should also be noted that Eliot Spitzer is running for Governor of New York state. I wouldn't be surprised if he makes his payola investigation a major part of his campaign.

I can see the TV commercial now:

Someone turns on a radio, and we hear music, and then a voice-over narrator: "Noticed that the music on your radio has gotten better?? You can credit Eliot Spitzer. He cracked-down on the seedy promoters who were offering bribes and payola to dee-jay's that got inferior music played on the radio. Eliot Spitzer cleaned up the radio dial; now he wants to clean-up Albany. Spitzer for Governor".

 

[promorobot]

Re: the opposing viewpoint

I may be the only person on this board who thinks this way, but I will stand by it: This whole endeavor is a collasal waste of time and tax money! Influence is being peddled in areas that directly affect people's lives, like what drugs a doctor prescribes, what parts get put in an airplane, or what laws are passed. Yet we can all rest easier knowing Top 40 radio is "clean and honest!"

Maybe Mr. Spitzer will start cleaning up payola in the rest of society now that he's cleaned up the record and radio biz.

PTR

 

[dampier]

Re: the opposing viewpoint

> I may be the only person on this board who thinks this way,
> but I will stand by it: This whole endeavor is a collasal
> waste of time and tax money! Influence is being peddled in
> areas that directly affect people's lives, like what drugs a
> doctor prescribes, what parts get put in an airplane, or
> what laws are passed. Yet we can all rest easier knowing
> Top 40 radio is "clean and honest!"

This is akin to the mafia telling the police to go arrest the murderers and the rapist because they are the "real criminals." No matter where laws are being broken, I applaud Spitzer at least doing something about it. Ultimately, the arrogance of commercial radio in this country will be the death of them. I was chatting with a group of college kids from RIT the other day and we were talking about personal electronics. The entire group had not listened to one minute of local radio, either here or at home, since they were in middle school. In fact, their only exposure to radio at all was in area stores or while getting their hair cut.

"Radio sucks/blows" is becoming nearly the universal attitude among younger folks today. They don't leave home without their iPods, and wouldn't even think of turning on any commercial radio station for any reason. One has XM and listens to that when the iPod batteries are dead.

The Clear Channels and others of this country have nobody to blame but themselves.

In 20 years, the government will probably be reclaiming parts of the AM and FM bands for "first responders" and other users because there certainly won't be a compelling reason to keep what will probably be automated and voicetracked jukebox stations that will make up the majority of radio stations if current trends continue.

 

[SirRoxalot]

The Untouchables

Mr. Spitzer has taken on several of the "Untouchables" besides Big Media. Ask Wall Street and the Insurance Industry. Spitzer didn't start out specifically to take down Dave Universal, or even Top 40 radio in general. Spitzer started digging into Big Media, and the abuses in Top 40 radio in general - and DU(h) in particular - were so obvious and easy to document that it was an easy case to prove and has a lot of impact with the public.

Don't assume that Big Health and Big Drug company shenanigans are out of Spitzer's view, especially with the issues involving health care and Medicaid simmering on the front burner.

By virtually all accounts, Dave Universal brought this down on himself. His defence should be interesting.

 

[promorobot]

Re: the opposing viewpoint

> This is akin to the mafia telling the police to go arrest
> the murderers and the rapist because they are the "real
> criminals."

Your comparison is ludicrous. Are you equating loan sharking, drug dealing, and other Mafioso activities to getting a record played on the radio? Jaywalking is a crime as well. Do you suggest the AG's office tackle that next?

PTR

 

[Element9]

Re: the opposing viewpoint

> > This is akin to the mafia telling the police to go arrest
> > the murderers and the rapist because they are the "real
> > criminals."
>
> Your comparison is ludicrous. Are you equating loan
> sharking, drug dealing, and other Mafioso activities to
> getting a record played on the radio? Jaywalking is a crime
> as well. Do you suggest the AG's office tackle that next?
>
> PTR
>

Must we summon lawyers to explain that our republic is a nation conceived in law? What do we become if we choose to ignore the law? If we pick and choose which laws are to be enforced? If we arbitrarily apply the laws?

Anrachy.

Jay-walking IS a crime in some cities, in some states. The punishment (penalty) for this venial crime is applied pursuant to the law. The AG's office does not prosecute offenses such as jay-walking. I understand that your "jay-walking" analogy was metaphoric. But not so long ago, when this issue was debated on this board, Bob Smith (PhD) offered a particularly well-crafted post here, which outlined the role of the NYS AG's office and the crimes it is charged to pursue.

The laws that apply to "getting a record played on the radio" are far reaching and touch other businesses as well. Extortion, bribery, influence peddling; perjury, falsifying SEC statements and violating a company's fiduciary responsibilities: do you suggest that we look the other way? These are not jay-walking offenses.

If it were only as simple as "getting arecord played." Clearly, the record indicates that these offenses were deep-rooted. This is serious stuff where hundreds of thousands of dollars trade hands.

PTR, I'm surprised at your take. You are one of the better posters on this board, but your argument flies in the face of reason and sound governance.

-9-

 

[Debaser]

Re: the opposing viewpoint

> "Radio sucks/blows" is becoming nearly the universal
> attitude among younger folks today. They don't leave home
> without their iPods, and wouldn't even think of turning on
> any commercial radio station for any reason. One has XM and
> listens to that when the iPod batteries are dead.


This paragraph says wonders. Radio may be the first entity to prove that it IS possible to suck and blow at the same time!

 

[promorobot]

Re: the opposing viewpoint

Thank you for your flattering comment, but I must still maintain my position.

First let me differentiate between the PD who tries to generate promotional capital for his/her station and listeners, and PD's who use record companies as their personal Santa Claus.

The sad truth is that many broadcasting companies spend $0 on promotion. If it weren't for PD's negotiationg promotions from labels, listeners would never get concert tickets, t-shirts, trips, etc. All the things listeners have come to expect from radio stations.

Further, is it wrong for a label to back an artist with promotional money? If station X plays a song by artist Y, what's wrong with the label giving the station 10 pairs of concert tickets to give away to listeners to see Y perform?

Speak to any veteran record promoter and they would tell you some of the biggest hits had to be wheeled-and-dealed onto the radio, so the arguement that only crappy records need payola is incorrect. With so much competition for so few playlist spots, it's inevitible that a label would up the ante to get their project an edge. It's no different than any other business.

I guess I resent the insinuation that PD's are only lining their pockets. Having been at radio stations without the proverbial pot-to-piss-in, I recall how grateful I was to labels who would offer assistance when our own owners would not.

PTR

> Must we summon lawyers to explain that our republic is a
> nation conceived in law? What do we become if we choose to
> ignore the law? If we pick and choose which laws are to be
> enforced? If we arbitrarily apply the laws?
>
> Anrachy.
>
> Jay-walking IS a crime in some cities, in some states. The
> punishment (penalty) for this venial crime is applied
> pursuant to the law. The AG's office does not prosecute
> offenses such as jay-walking. I understand that your
> "jay-walking" analogy was metaphoric. But not so long ago,
> when this issue was debated on this board, Bob Smith (PhD)
> offered a particularly well-crafted post here, which
> outlined the role of the NYS AG's office and the crimes it
> is charged to pursue.
>
> The laws that apply to "getting a record played on the
> radio" are far reaching and touch other businesses as well.
> Extortion, bribery, influence peddling; perjury, falsifying
> SEC statements and violating a company's fiduciary
> responsibilities: do you suggest that we look the other way?
> These are not jay-walking offenses.
>
> If it were only as simple as "getting arecord played."
> Clearly, the record indicates that these offenses were
> deep-rooted. This is serious stuff where hundreds of
> thousands of dollars trade hands.
>
> PTR, I'm surprised at your take. You are one of the better
> posters on this board, but your argument flies in the face
> of reason and sound governance.
>
> -9-
>

 

[tokyo_rose]

Re: Reaction from Rochester Radio Listeners to the Spitzer Lawsuit

I think nearly 10 years later the industry is reaping what it sowed i.e. consolidation. I recall a study from several years ago that looked at this issue. Here's some salient points from the executive summary, which can be found at http://www.futureofmusic.org/research/radiostudyexecsum.cfm

EFFECTS OF CONSOLIDATION


6. Format consolidation leads to fewer gatekeepers. A small number of companies control what music is played on specific formats. Coupled with a broad trend toward shorter playlists, this creates few opportunities for musicians to get on the radio. Further, overwhelming consolidation of these formats deprives citizens the opportunity to hear a wide range of music (See Chapter 4, pp. 61-63).


7. Increased format variety does not ensure increased programming diversity. From 1996 to 2000, format variety – the average number of formats available in each geographic market – increased in both large and small markets (see Chapter 3, p. 44-45). Yet format variety is not equivalent to true diversity in programming. Formats with different names have similar playlists. Analyzing data from charts in Radio and Records and Billboard Airplay Monitor, revealed considerable format homogeneity – playlist overlap between supposedly distinct formats: as much as 76 percent (see Chapter 4, p. 56). Furthermore, radio companies regularly operate two or more stations with the same format in the same geographic market. Such format redundancy undermines a common economic assumption that station owners with multiple stations in a market would program differently, in order to avoid competing against themselves. We found 561 instances of format redundancy nationwide, amounting to massive missed opportunities for format variety, which might in turn enhance programming diversity (see Chapter 3, p. 50).


8. A “twin bottleneck” limits musicians’ access to radio. Radio’s oligopolies interact with a five-company recording industry oligopoly, hurting musicians and citizens. Eighty to 100 percent of radio charts are dominated by songs released by the five (previously six) major label conglomerates. This “twin bottleneck” makes access to the airwaves even more difficult for musicians – and reduces choice for citizens (see Chapter 4, pp. 63-67).
<P ID="signature">______________
I can't believe I'm sitting here in Buffalo. The only town where you can have a good time without enjoying yourself.
Inez (as portrayed by Amherst, NY native Wendie Malick) "Manna from Heaven", 2002</P>

 

[SirRoxalot]

Promotional Considerations

The whole point of the state and federal statutes regarding Payola is that the public has the "reasonable expectation" that music is being selected based on its merit and/or popularity.

Radio stations are free to trade airplay for "concert tickets, t-shirts, trips, etc. All the things listeners have come to expect from radio stations" as long as they ANNOUNCE that they're playing those songs in return for "promotional considerations". Of course, they also have to put those promotional dollars on the books, pay taxes on them, etc.

Every radio station I've worked at has required me to sign a "Payola Disclosure Agreement" or something similar at the beginning of employment, and usually annually. The paperwork spells out Payola in some detail, so ignorance is no excuse. Of course, you DO have to READ the contract you're signing.

DU and others face IRS inquiries, FCC inquiries, and possible perjury charges if they falsely signed a Payola Disclosure form indicating that they did NOT receive goods or services in return for airplay. They're looking everything from fines to felonies. Not a pretty picture.

BTW, Spitzer's office is NOT just targeting CHR radio stations. Check out the AG's website for more information about many ongoing investigations in a lot of different industries.