Co. pays out $1 mil for incident within former Music Group
Univision has agreed to pay $1 million to settle allegations that some of its radio stations or their employees engaged in “payola,” or secretly accepting payments from record labels to give more frequent airplay to certain artists.
The FCC’s enforcement bureau launched an investigation into the payola allegations three years ago, and the Department of Justice embarked on a concurrent criminal investigation, which also was settled in a plea that Univision Services Inc. made in a federal district court in California.
The agreement requires that Univision agree to certain business reforms, including a prohibition on its stations and employees from exchanging airplay for cash or gifts of value and compliance with sponsorship identification laws; a limit to the size of gifts, like concert tickets, that stations can accept from record labels; appointment of a compliance officer and regional contacts to monitor company performance under the terms of the settlement; and regular training of personnel on payola restrictions.
In a statement, Univision said the investigation involved former employees of Univision Music Group, its label that was sold to Universal Music Group in 2008.
The settlement agreement “relates to a payola scheme by an isolated group of employees at UMG that took place from in or around 2003 through September 2006. The actions of these employees were undertaken without the knowledge of anyone at Univision outside of UMG,” the company said.
An FCC spokesman declined to say whether settlements with other broadcasters were imminent.
In 2007, four radio broadcasters — Clear Channel, CBS Radio, Entercom Communications and Citadel Broadcasting — paid a $12.5 million fine to settle payola allegations.
They also agreed to provide 8,400 half-hour segments of free airtime for independent record labels and local artists.”Payola — the idea of pay-for-play — misleads the listening public,” FCC chairman Julius Genachowski said in a statement. “This agreement with Univision underscores the FCC’s focus on consumer protection and our commitment to ensuring that broadcasters play it straight with the public.”
The payola investigations have been a contrast to what has been going on on Capitol Hill for more than a year: Recording artists and labels are seeking approval of a law that would require that radio stations pay them when their songs are played over the air.