Payola Scandal Again Rocking, Roiling Radio: FCC Scrutiny Recalls '59 Charges
RedNova.com
Sep. 19, 2005
http://www.rednova.com/news/technology/243496/payola_scandal_again_rocking_roiling_radio_fcc_scrutiny_recalls_59/
The radio "pay-for-play" scandals of 1959 and 2005 have at least one thing
in common: Both erupted at moments when broadcasters already were under
scrutiny.
In 1959, the Federal Communications Commission was investigating the
television networks over the quiz-show scandals, and religious leaders were
bemoaning the rise of rock 'n' roll when a new brouhaha erupted: Famed disc
jockey Alan Freed was fired for taking bribes to spin songs.
These days, the FCC is fining broadcasters for airing content it deems
indecent, a crusade led by conservative groups that intensified after one
of Janet Jackson's breasts was briefly exposed during a nationally
televised Super Bowl halftime show.
And now payola is back -- or back in the news, at least.
The FCC announced plans in August to investigate the uproar that recently
forced music giant Sony BMG to pay $10 million to settle payola charges in
New York.
"Just as the outcome of the payola scandal of 1959 was influenced by the
quiz-show scandal and the outrage over rock 'n' roll, this latest incident
will be influenced by the debate over indecency," said Christopher
Sterling, a George Washington University professor who has studied payola
extensively.
By many accounts, payola -- a contraction of "pay" and Victrola record
players -- never went away after the 1959 scandal. Mr. Sterling and other
historians say the practice is older than broadcasting itself.
Beyond Tin Pan Alley In the late 19th century, before radio, sheet-music
sales determined a song's popularity.
Tin Pan Alley -- the term used to describe the music-publishing business at
the time -- strived to get songs played as often as possible to increase
public demand for the tunes, including sending promoters out to dance halls
to slip orchestra leaders cash bribes.
By the 1950s, payola was common in the radio business.
Larry Kane, who got his start in broadcasting as a radio reporter in the
1950s and later became a prominent local TV news anchor in Philadelphia,
said he never witnessed cash exchanging hands at the stations he worked at,
but he said the music labels worked hard to influence playlists.
"Stations were crawling with record promoters. They were everywhere. They
invaded a station, and they always had gifts," Mr. Kane said.
Promoters try to persuade radio stations to play their clients' records.
For years, record companies have run their own promotion departments, but
they also have hired independent promoters.
A scene from "Ray," the 2004 film that chronicled the rise of Ray Charles,
shows a music promoter handing a disc jockey a wad of cash in exchange for
playing one of Mr. Charles' early recordings.
When Mr. Freed, who coined the term "rock 'n' roll," was charged with
taking bribes and fired from WABC-AM in New York in 1959, it helped fuel
the controversy raging over payola and the music Mr. Freed championed.
The fallout from Mr. Freed's firing ensnared some of the biggest musicians
of the day, such as Bobby Darin, who denied paying for his music being
featured on Mr. Freed's show.
Congress opened hearings on payola that featured a star-studded witness
list, including Mr. Freed and Dick Clark, then a disc jockey in
Philadelphia and the host of "American Bandstand."
During his testimony, Mr. Clark admitted having a financial interest in 27
percent of the records he played on "American Bandstand." The disclosure
didn't hurt Mr. Clark, whose clean-cut image helped him escape the scandal
virtually unscathed.
Rep. Oren Harris, an Arkansas Democrat who led the House investigation into
payola, told Mr. Clark he was "a fine young man."
After the hearings, Congress passed a law that made payola a misdemeanor
offense.
New forms of payola Payola has resurfaced in the news sporadically over the
years.
The 1996 Telecommunications Act, which loosened regulation of telephone and
other telecommunications companies, sparked massive consolidation in the
radio industry, making it easier for record promoters to do business with
hundreds of stations at once.
Two years ago, Clear Channel Communications Inc., the nation's largest
radio chain with about 1,200 stations, cut all ties with independent
promoters, in part to avoid the "appearance of impropriety," according to a
statement from the company.
Music industry executives acknowledge spending hundreds of millions of
dollars each year to promote albums, and analysts say most of the money is
probably spent legally.
"It's hard to say how much activity there is [today], or whether the music
promotion game will merely morph again as it did over the last few years to
acknowledge the letter, if not the spirit, of the law," said Sean Ross,
vice president of Edison Media Research Inc., a Somerville, N.J., firm that
conducts market research for broadcasters.
The Sony BMG investigation in New York -- led by state Attorney General
Eliot Spitzer, a Democrat who is expected to seek his party's gubernatorial
nomination -- suggests much of the payola taking place today involves the
exchange of gifts rather than cash for record spins.
For example, documents released by Mr. Spitzer show Sony BMG executives
gave the program director at a San Diego radio station a 32-inch
plasma-screen television set in exchange for adding Jennifer Lopez's latest
album to the broadcaster's playlist.
The programmer was urged to make up a contest winner's name and Social
Security number to cover up her role in the scheme.
"Critics of pop music have insisted going back to the late '50s and early
'60s that the only possible explanation for the popularity of music they
don't like is payola. In fact, if you look at some of the artists cited in
the Spitzer documents, you find a lot of acts who are regularly on year-end
top 10 lists," Mr. Ross said.
Mr. Spitzer also is investigating EMI, Warner Music Group and Universal
Music Group. He could not be reached for comment for this article.
Radio industry executives and station managers have largely kept mum since
the Sony BMG scandal broke.
"We have always had a zero-tolerance policy for any action that could be
construed as 'pay for play,' " said Andrew W. Levin, an executive vice
president and chief legal officer for Clear Channel.
"If there are some bad apples, we will find them. Any evidence of
wrongdoing will be met with swift disciplinary action, up to and including
dismissal," Mr. Levin said.
Representatives for Infinity Broadcasting Corp., the nation's
second-largest radio chain, declined comment.
In the Washington area, radio executives said payola isn't a problem.
"I haven't even heard a whisper about it in this market for years," said
Joel Oxley, a Bonneville International Inc. senior vice president who
manages several stations in the Washington area, including WWZZ-FM (104.3),
which plays pop music.
The FCC has not sanctioned a broadcaster for payola violations since
October 2000, when it fined stations in Texas and Michigan $4,000 each for
not disclosing payments they received from A&M Records to play Bryan Adams
songs.
FCC Commissioner Jonathan S. Adelstein, one of two Democrats on the
five-member panel that oversees the agency, has been its most vocal critic
of payola and is credited with persuading Chairman Kevin J. Martin, a
Republican, to investigate the problem.
Mr. Adelstein, who also has supported the FCC's crackdown on content it
deems indecent, sees payola and indecency as symptoms of the problems
presented by consolidation of the broadcast media.
The "corporatization" of media has forced broadcasters to focus on the
bottom line at the expense of almost everything else, he said.
Since May, he has been speaking out against commercialism in the media.
He has cited rising product placement in television shows, as well as the
use of "video news releases" -- prepackaged stories prepared by businesses
and government agencies that sometimes wind up on TV newscasts -- as examples.
Payola deprives radio listeners "of hearing the freshest music, local
artists and creative genius, because the labels are predetermining what
they get to hear -- and paying to get it played. We owe it to the American
public, music lovers and creative artists -- the ones who are hurt the most
-- to end this deception," Mr. Adelstein said.
In August, Mr. Martin said he was "very concerned" about Mr. Spitzer's
findings in the Sony BMG case, stressing the continued relevance of the
laws Congress adopted in the wake of the payola scandals of the late 1950s
and early 1960s.
"These rules serve the important purpose of ensuring that the listening
public knows when someone is trying to influence them," Mr. Martin said.
It is not clear how far the FCC's latest payola investigation will reach,
Mr. Ross said.
"The best thing the FCC could do now is offer some clear guidelines on what
constitutes [payola] and how it needs to be disclosed," he said.
It could be hard to build public support for a payola crackdown. In other
industries, the practice is not uncommon, Mr. Sterling said.
For example, food companies often pay retailers to give their products
prominent placement on store shelves, he said.
"None of that is illegal. It is all an accepted way of doing business. We
can argue whether it is ethical, but it's not illegal," Mr. Sterling said.
HISTORY OF PAYOLA
--Aug. 28, 1958 -- The New York Sun and other newspapers publish interviews
with former contestants on NBC's popular quiz show "Twenty One" who say the
program is rigged, triggering an investigation by New York prosecutor
Joseph Stone and hearings in Congress. Eventually, lawmakers make it a
crime to fix a game show.
--Nov. 6, 1959 -- The same panel that investigated the quiz show scandals
-- the House Subcommittee on Legislative Oversight, led by Rep. Oren
Harris, an Arkansas Democrat -- announces plans to probe allegations that
some radio disc jockeys accept bribes to spin tunes.
--May 9, 1960 -- Disc jockey Alan Freed, who is credited with coining the
term "rock and roll," is indicted under commercial bribery laws for
accepting $2,500 to play certain songs; he claims the money is a "token of
gratitude" that did not affect airplay. Mr. Freed pays a small fine, but
his career is over, and he dies almost five years later at 43.
--Sept. 13, 1960 -- The Federal Communications Commission bans payola in
broadcasting.
Violating the payola rules becomes a misdemeanor, punishable by as much as
$10,000 in fines and a year in prison.
--Feb. 24, 1986 -- NBC News airs "The New Payola," an investigation into
the Network, a loose organization of independent promoters in the music
industry. Four days later, major labels such as Capitol Records and MCA
withdraw from the Network, which eventually disbands. The NBC report also
prompts investigations by Rudy Giuliani, New York's attorney general at the
time, and Al Gore, then a senator from Tennessee, into independent labels.
--Feb. 8, 1996 -- President Clinton signs the Telecommunications Act of
1996, sparking massive consolidation into the radio industry and making it
possible for independent record promoters to do business with hundreds of
stations at once.
--Feb. 1, 2004 -- During a performance on the Super Bowl halftime show,
Justin Timberlake pulls off the bodice cup that holds Janet Jackson's right
breast, briefly exposing it to millions of television viewers. Over the
next few weeks, complaints to the FCC soar, and the agency intensifies its
scrutiny of indecency on the airwaves.
--May 25, 2005 -- FCC Commissioner Jonathan S. Adelstein, a Democrat, calls
on his agency to investigate payola in a speech to the Media Institute, a
journalism think tank.
--July 25, 2005 -- Sony BMG, one of the world's largest music labels,
agrees to pay $10 million and to stop paying radio station employees to
feature its artists to settle an investigation by New York Attorney General
Eliot Spitzer, a Democrat. Documents he releases to reporters show Sony
executives lavished station employees with cash and gifts in exchange for
spinning songs by Jennifer Lopez, Jessica Simpson, Celine Dion, Good
Charlotte, Duran Duran, John Mayer, Kelly Rowland and other performers.
--Aug. 8, 2005 -- FCC Chairman Kevin J. Martin, a Republican, announces the
agency will investigate the payola scandal, which Mr. Adelstein says "may
represent the most widespread and flagrant violation of any FCC rules in
the history of American broadcasting."
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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