Payola in Radio Uncovered by LA Times

Spitzer Alleges Payola in Lawsuit
The New York attorney general says radio company Entercom sold airplay to record labels.
By Charles Duhigg, Times Staff Writer
March 9, 2006

The nation's fourth-largest radio company, Entercom Communications Corp., traded airtime for gifts and payments in a payola scam that included formalized programs to sell airplay to record labels, according to a suit filed Wednesday by New York Atty. Gen. Eliot Spitzer.

The suit's most serious allegations focus on Entercom's "CD Preview" and "CD Challenge" programs, in which radio executives allegedly solicited payments to improve a song's position on national airtime charts.

In one e-mail released by Spitzer, Entercom's vice president of programming, Pat Paxton, wrote to a colleague: "A quick lesson on how CD Preview works: Record companies buy the program to better their chart position…. It generates millions of dollars for Entercom that is found money."

Spitzer's suit comes as Entercom and at least two other radio companies have communicated with the Federal Communications Commission about settling an investigation into payola practices, sources familiar with the talks said.

Representatives of Clear Channel Communications Inc., the nation's largest radio station owner, Citadel Broadcasting Corp. and Entercom have been in contact with representatives of the FCC's enforcement division to discuss pay-for-play investigations, said those sources, who did not want to be named for fear of derailing a potential settlement. The sources said some FCC officials had hinted at a willingness to quickly resolve the agency's inquiry.

But that haste has some observers worried that a speedy resolution could lessen the effect of Spitzer's investigations.

"We need to shine more sunlight on the corruption in how radio stations choose songs," said Don Rose, president of the American Assn. of Independent Music. "An agreement behind closed doors between the FCC and the big radio companies is exactly the opposite of that."