The boss of the US Federal Communications Commission has written to the CEO of radio giant iHeartMedia asking for information about bookings for this year’s iHeartCountry Festival in Austin.
It follows a recent ‘enforcement advisory’ statement from the FCC in response to concerns that radio stations pressuring artists to play their events for free in return for airplay is the latest manifestation of illegal payola within the American music industry.
FCC Chair Brendan Carr’s letter to iHeart CEO Bob Pittman begins, “it appears that certain owners of federally licensed radio stations are effectively compelling musicians to perform at radio station events or festivals for free (or for reduced compensation) in exchange for more favorable airplay. When unreported, these schemes can violate federal ‘payola’ laws”.
And if concern about payola in the music industry all seems a bit old fashioned, Carr is keen to stress that won’t stop his agency from enforcing the law. “To the extent that radio industry executives believe that the FCC has looked the other way on ‘payola’ violations in recent years”, he tells Pitmann, “I want to assure you that this FCC will not be doing that”. He then adds, “it is within this context that I am writing to you today”.
Carr doesn’t explicitly accuse iHeart of any illegal conduct. However, he writes, as iHeart “finalises its approach” to this year’s iHeartCountry Festival, which takes place at the start of May, “I want to ensure that it does so in a way that complies with federal payola requirements”.
“It would be particularly concerning to me”, he goes on, “if, on the heels of the FCC’s enforcement advisory, iHeart is proceeding in a manner that does not comply with federal ‘payola’ requirements”.
To that end, “I want to know whether iHeart is effectively and secretly forcing musicians to choose between, one, receiving their usual, ordinary, and full scale compensation for performing or, two, receiving less favourable airplay on iHeart radio stations”.
The FCC’s enforcement advisory statement was issued on 6 Feb, and followed a letter from US Senator Marsha Blackburn to Carr in which she dubbed radio stations getting artists to play their events for free, or for a significantly reduced fee, in return for on air support as a form of payola.
In its subsequent statement, the FCC said, “we remind broadcast licensees that a practice known as ‘payola’ is not only a violation of the United States Criminal Code, but may also subject broadcasters to sanctions under the Communications Act of 1934”.
It then defined payola as “the unreported payment to - or acceptance by - employees of broadcast stations, programme producers or programme suppliers of any money, service or valuable consideration to achieve airplay for any programming".
Payola has existed pretty much as long as there has been a music industry in the US, even pre-dating both recordings and radio, with music publishers paying singers and big bands to perform songs they controlled. But the classic era of payola was probably the mid-Twentieth Century, when labels would routinely bung cash to DJs to secure radio airplay for their new releases.
When regulators started to crack down in the 1960s, payola practices evolved, with radio station bosses rather than DJs increasingly on the receiving end of the bribes.
Sometimes they’d receive cash or freebies personally, other times labels would commit to spend money with the radio station. In a bid to avoid the legal consequences, labels increasingly hired third party independent promoters to handle the payola arrangements.
The last big exposé of payola was in the 2000s when then New York District Attorney Eliot Spitzer undertook an investigation into the deals being done between the major record companies and the big radio groups, including iHeart, then known as Clear Channel. The investigation resulted in a series of multi-million dollar settlements involving the majors and a number of radio companies.
Artists offering broadcasters, and other media, preferential rates when performing at their events, in return for promotion and exposure, happens all the time of course. Whether or not that breaches sponsorship or broadcasting rules in any one country will likely depend on how explicit the discount-for-promo arrangement is and how partnerships are communicated.
When it’s not quite as simple as bunging a few DJs an envelope full of cash, payola rules can be harder to define. Though it seems like Carr might be planning to use the iHeartCountry Festival as a case study that sets some precedents.
He wants to know what fees are being paid to musicians performing at the festival, how that compares to what they’d usually earn, and whether their involvement in the event will result in an airplay boost for their music. Carr adds, “please explain how iHeart’s position has been conveyed to musicians, artists and acts and how iHeart plans to ensure the relevant outcome”.
He also asks about iHeart’s policy towards payola and how it responded to this month’s enforcement advisory’ statement. And, also, “why iHeart believes that musicians, artists, or acts perform for free or for reduced fees at the festival and at iHeart events similar to the festival”.