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The responses by the major record labels to Commissioner O’Rielly’s inquiry into allegations of payola practices (see our article here) were published last week while we were all distracted with pandemic issues.  While the responses (available here on the Commissioner’s twitter feed) were perhaps not surprising – saying that the record labels do not engage in any on-air pay-for-play practices where the payment is not disclosed – they nevertheless highlight some practices that should be observed at every radio station.  As I have said in many seminars to broadcasters around the country when talking about FCC sponsorship identification requirements, if you get free stuff in exchange for promoting any product or service on the air, disclose that you got that free stuff. As made clear in these responses, when the record companies give free concert tickets or similar merchandise to a radio station for an on-air giveaway to promote a concert or the release of new music by one of their artists, they agree with the station to reveal on the air that the record company provided the ticket or merchandise that is being given away.

The responses also indicate that these record companies do not provide musical artists to play at station events with any agreement – explicit or implicit – that the station will play those artists more frequently because of their appearance.  While that might happen naturally, it also might not (if, for instance, the band is one of many acts participating at some station-sponsored festival).  The record companies state that their contracts with stations for such events make clear that there is no agreement that any artist appearance is tied to additional airplay for that artist.…
Continue Reading Record Companies Respond to FCC Commissioner on Payola – What Should Broadcasters Learn from the Responses?

The FCC proposed a $44,000 fine on a Chicago radio station for running 11 announcements that did not contain a sponsorship identification.  This fine was not for 11 different announcements for different groups, but instead a single announcement run 11 times.  Each airing of the announcement triggered a $4000 fine (which is the amount of the FCC "base fine" for a sponsorship identification violation).  According to the FCC decision, a group called the Workers Independent News ("WIN") bought 2 two-hour programs, one one-hour program, and a number of shorter promotional announcements for those programs. 11 of the promotional announcements did not specifically state that they were sponsored.  Instead, these 11 announcements – each 90 seconds long – consisted of an interviewer, identifying himself as being with Workers Independent News, discussing a local issue with local legislator.  While the announcement did open with a mention of WIN, it didn’t specifically say that they had paid for the spot.  Presumably, the FCC feared that the spot sounded like a program element, perhaps even a news interview (even though it ran in a commercial break), and held that the mere reference to WIN without any explicit statement that the spot was paid for by that group was not enough to convey sponsorship of the ad or to meet the FCC rules requiring sponsorship identification.

The decision here shows how seriously the FCC takes the issue of being able to identify who is trying to influence listeners by providing some form of valuable consideration to a broadcast station in exchange for the broadcast of a message.  This issue is the subject of an FCC rulemaking proceeding, has previously led to fines for other stations (though rarely ones of this magnitude, even where the FCC has found whole programs or portions of programs to have been sponsored – see, for example, the cases we’ve written about here and here dealing with "video news releases"), and has become part of the proposals for the new on-line public file, suggesting that sponsorship identification information be made available for any "pay-for-play" programming in such a file.  The issue has even become important in the online world, with the FTC issuing rules that require similar sponsorship identification even in connection with social media posts for which the author has received consideration (see our summary of the FTC order here).

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Continue Reading $44,000 Fine for Radio Station Not Including Sponsorship Identification in Paid Message

Politico ran a story last week, indicating that a number of radio talk show hosts were paid to endorse, during their shows, certain causes and groups that might be of interest to their listeners.  The article suggests that the endorsements included live read commercials, as well as other comments made during the course of the program, as asides or during discussions of the issues of the day.  While we have not reviewed any of these programs, and have no idea if the story is accurate or how any paid mentions were handled during the program, radio stations do need to be cautious in this area, and consider the sponsorship identification issues that may be raised by such conduct.  And this consideration is not just in connection with political talk programs – but wherever any on-air talent receives consideration for making a plug for a product or service on the station.

This issue has already been a big deal on the video side of the media house, with both broadcasters and cable companies having been fined for including material in their programs without disclosing that they had received consideration for the inclusion of the material.  Recently, we wrote about two TV stations who were fined by the FCC for broadcasting "video news releases", where the stations broadcast content from third parties which was deemed to have a promotional message included for the third party’s product, where the station did not specifically disclose that the video material had been provided at no charge to the station.  The provision of the tape alone was deemed to be consideration.  Almost four years ago, we wrote about another station that was hit with a fine when a syndicated TV talk show host was revealed to have been receiving government money to promote a government program (No Child Left Behind), was promoting that government program during his show, and not mentioning that he had received this consideration.  The station was fined – even though they did not produce the program, as they had not inquired about whether any sort of consideration had been received by the host.  The Communications Act puts the burden on stations to reveal sponsors when consideration has been paid for the airing of any programming, and the FCC has said that this burden requires that the station take efforts to make sure that all programming – even that coming from syndicators – complies with the rules.   

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Continue Reading Radio Talkers Paid to Endorse Causes During Their Shows? What Should Stations Do?

The FCC today announced a $1,000,000 Consent Decree with Univision Radio to settle payola investigations underway at both the FCC and the Department of Justice.  Payola, or "pay for play" as it is called in the FCC Press Release issued today, is a violation of FCC rules and Federal criminal law, which both prohibit…