As detailed last month in Rolling Stone, pay-for-play continues to be a common feature of the radio business, with money or goods passing from the record labels to the radio stations to influence airplay. “Enough time has passed [since the last payola lawsuits in the mid-2000s], nobody’s gotten in trouble for a while, and nobody is scrutinizing this as tightly as they used to be,” “Matthew,” a longtime alternative radio promoter, told Rolling Stone recently. “Things are getting a little more lax.”
On Wednesday, FCC commissioner Mike O’Rielly sent an official letter to the Recording Industry Association of America asking the trade organization to investigate “possible violations of federal laws and regulations that expressly prohibit payola.” “Your association is uniquely situated to survey the practices of your industry and respond to press reports regarding alleged practices,” O’Rielly writes. “My primary goal is to get to the bottom of existing industry practices to determine whether the law is being followed or whether any problematic conduct must be addressed.”
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The Federal Communication Commission moved to prohibit undisclosed pay-for-play in 1960 following a congressional investigation of corruption at radio. But the regulations that were put in place were very weak. “Payola has never been illegal,” explains Tony Gray, a veteran of urban radio and the founder of Gray Communications. “What is illegal is if you do the transaction and don’t make it known to the audience that there was some financial support for you playing that song.”
Because of the FCC’s toothless regulations, it has rarely — if ever — taken serious action to curb payola. Earlier this year, an FCC source suggested that the organization was basically powerless to stop pay-for-play in its current form. “My sense is it’s extremely common for there to be some kind of financial transaction taking place between the station and the label,” the source said. “But they just package it in a way that passes muster under our rules. The way they do it is basically exploiting loopholes in the law.”
Other organizations have taken the lead in payola investigations. In 1986, a NBC report titled The New Payola kicked off a Senate probe into pay-for-play led by a young Al Gore. And in the 2000s, the New York attorney general’s office led an investigation into payola that caused the major labels and several prominent radio chains to pay million-dollar settlements and agree to change their practices.
Given this history, it makes sense for Commissioner O’Rielly to ask the RIAA for help. But the RIAA — a trade body which represents record labels — has also failed to stamp out pay-for-play at least once before. In 1985, the practice was rampant, and the cost of radio promotion was so high that label heads were getting frustrated. So the RIAA briefly started an investigation into payola, according to Hitmen, Fredric Dannen’s detailed 1990 history of radio corruption.
But the RIAA effort “flickered out,” Dannen writes, almost immediately. “The RIAA is not an investigatory body,” Dick Asher, president of PolyGram, said at the time, according to Dannen. “If the government is willing to [investigate], wonderful. It’s not something we can do well.” When NBC broke its payola story, the RIAA issued a statement claiming ignorance: “We have no knowledge that any firm or individual with whom our companies do business is engaged in any illegal activity.”
Even as he asks the RIAA for help determining the role of pay-for-play in modern radio, O’Rielly writes, “it is my sincere hope that recent allegations are being overstated or misrepresented.”
The RIAA did not immediately respond to a request for comment.
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