Sony BMG To Pay $10 Million Settlement For Radio 'Payola'
Published: Monday - July 25, 2005
Words by Jay Casteel
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One of the world's largest music companies, Sony BMG, has agreed to pay a $10 million amount in order to settle a payola investigation, which was launched by New York Attorney General Eliot Spitzer.
The company is just one of four major music companies to be investigated for illegally paying radios stations across the country for playing their artists' songs. The practice, which is widely known as "payola," includes independent promoters that are paid to help secure airtime for songs.
"Instead of airing music based on the quality, artistic competition, aesthetic judgments or other judgments, radio stations are airing music because they are paid to do so in a way that hasn't been disclosed to the public," Spitzer said at a press conference regarding the settlement.
Sony admitted that the company has taken part in the widely used practice, and stated that "employees pursued some radio promotion practices on behalf of the company that were wrong and improper."
According to the LA Times, Spitzer said the payola investigation continues at the other three major record companies -- Universal Music Group, EMI Group Plc, and Warner Music Group Corp., as well as the country's largest radio companies.
"These practices are pervasive," said Spitzer. "We are far along with the other three labels. We have received documents and are deep in conversations with them about this."
Sony's $10 million payment will be paid to not-for-profit entities will fund New York State programs that provide music education and appreciation.
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