Radio Groups Pay $12.5 Million to Resolve 'Payola' Case

CBS Radio, Citadel Broadcasting, Clear Channel Communications and Entercom Communications have agreed to pay a combined $12.5 million to close the FCC investigation into possible payola violations. The money is a "voluntary contribution" to the U.S. Treasury.
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CBS Radio, Citadel Broadcasting, Clear Channel Communications and Entercom Communications have agreed to pay a combined $12.5 million to close the FCC investigation into possible payola violations. The money is a "voluntary contribution" to the U.S. Treasury.

"Through this strong enforcement action that we take, the commission has provided clear guidance to licensees and sent a strong message that the practice of payola must stop for good," said FCC Chairman Kevin Martin.

Commissioner Michael Copps said that "while not a lethal blow, this action makes real, tangible progress against unacceptable pay-for-play practices." He called it good news "for listeners who have been drugged by years of standardized, homogenized music playlists."

The agreements between the broadcaster groups and the FCC resolve allegations that the broadcasters may have accepted cash or other valuable consideration from record labels in exchange for airplay of artists from those labels, without disclosing those arrangements, according to the commission.

The group owners also agreed to prohibit stations and employees from exchanging airplay for cash or other items of value except under specified conditions as well as limits on gifts and tickets from record labels. The group owners also agreed to regular monitoring and reporting company performance under the agreements.

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During 2005, the issue of payola received more public attention than at any time since the "pay-for-play" record scandals of the late 1950s.