Spitzer Takes On Payola

Volume CVI, No. 4April, 2006

Heather Beaudoin

Attorney General Eliot Spitzer has sued Entercom, an owner of radio stations, in the latest ongoing effort to combat the pervasive influence of payola in the entertainment industry.

Payola is the practice by which record labels and some independent promoters offer money and other gifts in exchange for broadcast air time for particular songs or artists.

The purpose of the payments is to increase air time for chosen songs and artists and manipulate the popular music industry charts.

Last year, after an extensive investigation by his office, Spitzer announced landmark agreements under which two major record labels agreed to halt the practice, adopt sweeping reforms and pay fines.

Entercom is the first company to be sued as part of the probe.

The lawsuit, which was filed at the State Supreme Court in Manhattan, alleges that Entercom:

  • Traded air time for gifts and other payments;
  • Traded air time for promotional items and personal trips;
  • Solicited and accepted payments from record labels for air time;
  • Instituted corporate programs, supported and directed by senior management, that sold air time to record labels in order to manipulate the music charts.

The complaint cites evidence that Entercom executives were working with independent promoters and record labels to increase air time and chart position for various artists, including Jessica Simpson, Avril Lavigne and Liz Phair.