Spitzer Names Entercom in Payola Suit

Entercom is in New York Attorney General Eliot Spitzer’s sights.
Spitzer filed the first of what he said would be several lawsuits concerning alleged payola by radio broadcasters. In a nearly 30-page complaint with an additional 64 pages of exhibits filed in the State Supreme Court in Manhattan, Spitzer alleged Entercom illegally traded air time for monetary payment as well as gifts and promotional items.
“What makes this case especially egregious is the extent to which senior management viewed control of the airways as an opportunity to garner illegal payments from record labels,” Spitzer said.
In documents and e-mails cited in the complaint, Entercom executives discussed strategies for supplementing radio station budgets with payments from independent promoters and record companies, alleges Spitzer, a 2006 Democratic gubernatorial candidate in New York.
A spokesman for Entercom said the company has rules in place that prohibit payola and the company has cooperated with the Attorney General’s office in this investigation.
“Entercom is a company that believes in playing by the rules and does so. Now that the Attorney General has filed this civil action we are confident that the issues will be fully and fairly resolved by the court,” said the spokesman.
Last year, Sony BMG agreed to pay $10 million and Warner Music Group agreed to pay $5 million in similar investigations by Spitzer, who has also issued subpoenas to eight other radio groups: Clear Channel, CBS Radio, Citadel, Cox, Cumulus, Pamal Broadcasting, Emmis and ABC.