Two of the three major record label conglomerates say they have no arrangements with radio stations for song placement or increased spins. Sony Music and Warner Music Group told the Federal Communications Commission that they continue to abide by a 2005 agreement with the New York Attorney General’s office limiting promotional activities and training record company employees about how to comply with anti-payola laws.
The letters, made public Tuesday, were part of an investigation by FCC Commissioner Michael O’Rielly into allegations of potential violations of pay-to-play rules. His review began last fall after a story was published in Rolling Stone last August, which quoted some broadcasters alleging record promoters were using cash apps and directing money to corporate accounts in exchange for spins.
Sony SVP/Deputy General Counsel Wade Leak told the FCC that the label hasn’t paid any money or provided any other benefit to radio stations that would be considered a violation of payola laws within the last five years. And while Sony does regularly provide contest prizes to radio stations, he said as part of the company’s compliance program they require stations to disclose to listeners that the prize is being paid for by Sony or one of its record labels. Leak said stations must also certify they’re not adding a record or increasing spins in order to secure the prize. The same is true for station appearances by artists, he told the FCC. “Our Radio Promotion Compliance Program is designed to ensure that payola, as defined by federal law, does not occur within our organization,” Leak said.
Warner Music Group delivered a similar message, saying that although it regularly promotes artists and songs to radio, all its actions are above board. “WMG has not directed a radio broadcast station to include a modification in a broadcast pursuant to the payola statutory provisions related to payment for song placement or frequency of airtime,” Warner SVP/Deputy General Counsel Trent Tappe said. And when it comes to contests, Warner also said every time it pays for an item that is given away on-air, a station must tell listeners it was paid for by the label. As part of his review, O’Rielly also asked the record companies whether they saw any shortcomings in the FCC’s current approach to payola or a need to reform how it targets violators. Tappe responded that Warner doesn’t see “any weaknesses in the current approach.”
The third major label, Universal Music Group, has still not responded to the FCC’s inquiry. O’Rielly said he was willing to work with the record company to ensure its confidential information is protected, while at the same time releasing its answers to the public.
The FCC’s payola investigation isn’t a priority given a focus on COVID-19 related issues, according to O’Rielly. But he said the letters have helped to close the loop on its review. O’Rielly said he believes the best course of action for now is to make the record companies’ statements public.
O’Rielly has previously said he’d be open to considering modifications to the payola rules since they represent another way broadcast radio is being put at a disadvantage. That’s because services such as Spotify, Pandora and Apple Music aren’t required to comply with the same regulations. In the meantime, he said in a Twitter post that he remains open to hearing from anyone with “credible, tangible facts” that dispute what the labels told the FCC.
The most recent payola-related action by the FCC was a million dollar fine paid by Univision Radio in 2010 as part of an agreement settling a payola investigation. And in 2007, the FCC settled cases against CBS Radio, Citadel Broadcasting, Clear Channel and Entercom that resulted in the four groups paying a combined $12.5 million to close investigations into possible payola violations.