FCC, RADIO INDUSTRY COME TO TERMS ON PAYOLA

Radio giants Clear Channel, CBS Radio, Entercom and Citadel have tentatively settled their payola problem with the FCC.

The four have agreed to pay the government $12.5 million and, in a separate pact apart from the FCC decree, provide 8,400 half-hour segments of free airtime for independent record labels and local artists.

The free airtime would be given to companies not owned or controlled by Sony BMG, Warner Music Group, Universal Music Group or EMI. Who came up with this plan, Tony Brummel?

The four radio firms will not be admitting any wrongdoing under the three-year settlement.

A separate agreement with the A2IM (American Association of Independent Music) includes a set of “rules of engagement” that will guide how label reps and radio programmers interact. Broadcasters will more closely monitor their dealings with labels, including setting limits on gifts, promising to keep track of all items of value supplied by those companies, hiring independent compliance officers to make sure the rules are followed, and establishing a “payola hot line” for employees to report when rules are broken. Anybody got that number?

“It’s absolutely the most historic agreement that the independent community has had with radio,” said Thirsty Ear Recordings President Peter Gordon, who has been leading the negotiations for A2IM. “Without a doubt, nothing else comes close.”

FCC Commissioner Jonathan Adelstein commented: “I love music, and I want radio to sound fresh, dynamic and real. But payola gets in the way of authenticity because money drives the music, not its quality. Taking payola out of the system will lead to more interesting programming. I especially look forward to hearing Bayside on my local station.”

When asked for his take on the settlement, Brummel replied: “Victory is the top independent rock label, according to marketshare. Unfortunately, if you looked at the rock radio charts, Victory would be nonexistent. This is not for a lack of trying for airplay. Our artists have real, passionate fans that could only help these stations’ ratings if they embraced what the people on the street are actually listening to.”