Universal will pay $12M to settle payola case
Last Updated: Thursday, May 11, 2006 | 1:55 PM ET
CBC Arts
Universal Music Group Recordings Inc. has agreed to pay $12 million US to settle the payola case launched by New York's crusading Attorney General Eliot Spitzer.
A New York probe found the company provided vacations, electronics and other bribes to DJs and radio station executives to increase radio play for its artists.
California-based Universal, the world's largest recording company, agreed to pay the cash to charity, Spitzer announced Thursday.
New York Attorney General Eliot Spitzer has forced a huge settlement from Universal Music Group Recordings.
(Stephen Chernin/AP)
It also will contribute $100,000 toward the cost of the investigation and has pledged to adopt reforms, Spitzer said.
The company didn't admit guilt, but acknowledged "various employees and independent promoters acting on behalf of the company" engaged in the illegal practice, Spitzer said, according to the Associated Press.
In papers filed in the state's Supreme Court, the attorney general's office outlined a long list of illegal practices the probe had uncovered.
Among the benefits Universal gave to radio stations were assistance with overhead costs, promotional support and other financial benefits. It also engaged in fraudulent call-in campaigns to increase airplay of its songs, the statement said.
"UMG has illegally provided radio stations with financial benefits to obtain airplay and boost the chart position of its songs," Spitzer said.
In January 2003, a program director for WFLY-FM in Albany, N.Y., was provided with the use of a Miami hotel room for putting Shoulda, Coulda, Woulda by Brian McNight on the station's playlist, Spitzer said. The room was listed as a contest prize for accounting purposes.
The same program director got a Miami hotel stay for playing a Nick Lachey song.
Spitzer's office is also probing the radio conglomerates and has sued Entercom Communications Corp. for allegedly accepting illegal incentives.
