For weeks, there have been rumors that the FCC would soon settle allegations of payola against four of the nation’s largest radio operators. According to an article in the New York Times, a settlement has in fact been reached – resulting in a $12.5 million fine. Coming on the heels of the rumored $24 million settlement with Univision for violations of the children’s television rules, this may evidence a new "get tough" policy with rule violators by the FCC.
According to the Times article, the payola settlement agreement was reached at the same time as an agreement between these companies and the Association of Independent Music agreeing to devote substantial broadcast time to independent music. The consent decree with the FCC also reportedly places a number of conditions on the broadcasters similar to those agreed to in consent decrees with then NY State Attorney General Eliot Spitzer. We suggested a number of ways for broadcasters to avoid problems with the FCC rules dealing with payola issues in an advisory, here. While payola has always been a serious issue – in fact one that could result in criminal time – the reported fines should make this a top-of-mind issue for all broadcasters.