Became the fourth and final major to do so.
EMI today (June 15) became the fourth and final major label to settle with the state of New York over alleged radio pay-for-play violations, investigated by New York State attorney general Eliot Spitzer.
Under terms of the agreement, EMI will pay a $3.75 million fine (in the form of a charitable donation to New York State not-for-profit music education and appreciation programs) and agree to a sweeping list of reforms to its radio promotion practices.
As part of the settlement EMI and its labels—Virgin Records America, Capitol Records, and S-Curve Records—have agreed to stop making payments and providing expensive gifts to radio stations and their employees in return for airplay of particular artists’ songs.
EMI used such tactics to secure airplay for the Rolling Stones, Coldplay, Norah Jones, Gorillaz and others.
Spitzer’s investigation determined that EMI bribed radio station programmers with video games, vacations, airfare, hotel accommodations and tickets to concerts; picked up the tab for radio operational expenses and contest giveaways; engaged in fraudulent call-in campaigns to increase the airplay of particular songs; and used independent promoters—including Jeff McClusky, Bill McGathy and Michele Clark—to funnel illegal payments to radio stations.
Among the improprieties cited in the Spitzer probe: Virgin budgeted over $200,000 in June 2003 for independent promotion of “Never” by Amanda Perez; and Dave Universal, the former PD of Entercom's WKSE Buffalo sent Virgin an invoice for a $1000 in May 2003 for a promotional trip to Cancun in exchange for airplay from an unspecified artist.
As part of its reform efforts outlined in the settlement, EMI will halt payments and other inducements to radio stations for airplay; hire of a compliance officer to monitor promotion practices; and set up an internal policing system to detect future abuses.
The agreement comes a month after Spitzer’s office settled a similar probe with Universal Music Group for $12 million.
Spitzer cut similar deals last year with Sony BMG, which agreed to a $10 million settlement in August, and Warner Music Group, which settled for $5 million in November. Sources familiar with the situation say that the sizes of the settlements are based on market share. Spitzer has also filed a lawsuit against Entercom Communications Corp. for pay-for-play abuses.
Probes into the promotion practices of a number of radio conglomerates—including Clear Channel, Cox, Infinity, and Emmis—are ongoing.
"EMI is pleased to have resolved these radio promotion matters with the New York State Attorney General with this agreement,” the company said in a statement. “In addition to voluntarily adopting strict policies last year, we have been working cooperatively with the attorney general to reinforce these policies."