Broadcasters pay $12.5 million to resolve possible “payola” violations

The Federal Communications Commission (FCC) released Orders adopting Consent Decrees with CBS Radio, Citadel Broadcasting Corporation, Clear Channel Communications, Inc. and Entercom Communications Corp.
Under the Consent Decrees, the broadcasters agree to pay a combined $12.5 million to close investigations into each broadcaster’s possible violations of the Commission’s sponsorship identification rules for the practice commonly referred to as “payola.” Specifically, the Consent Decrees resolve allegations that the broadcasters may have accepted cash or other valuable consideration from record labels in exchange for airplay of artists from those labels, without disclosing those arrangements.

In addition to the $12.5 million in voluntary contributions, the broadcasters agree to implement certain business reforms and compliance measures. Key provisions of the Consent Decrees include:

Prohibition on company stations and employees exchanging airplay for cash or other items of value except under specified conditions

Limits on gifts, concert tickets, and other valuable items from record labels to company stations or employees

Appointment of Compliance Officers and market-level Compliance Contacts responsible for monitoring and reporting company performance under the Consent Decrees

Regular training of programming personnel on payola restrictions

In 1959 the Payola Scandal was uncovered and affected the way radio stations and promoters did business.
The scandal touched recording artists like Bobby Darin and Les Paul, other DJs, most notably Dick Clark,Alan Freed,and the presidents of several of the larger American radio stations. Over time, many have claimed the investigation came about in order to assuage the public’s fears about rock and roll and its failed legitimacy as a musical form.