Promotional support, prizes and give-a-ways examined.

New York state attorney general Eliot Spitzer's $10 million settlement with Sony BMG does more than affirm the illegality of the “traditional device of delivering bribes to radio programmers.” It also refines what constitutes permissible “promotional support,” “prizes and ‘give-a-ways’ ” that the label group can provide to radio in the state of New York.

As detailed in the nine-page “Business Reforms” section of the settlement, Sony BMG cannot “give, offer, arrange for or provide anything of value” to radio, a radio staffer or a radio contest winner unless it is fully disclosed on the air as being paid for by Sony BMG. The record label can provide contest prizes and giveaway items and can arrange for artist appearances as long as a designated Sony “Compliance Officer” has approved the transaction in advance.

As for “nominal consideration”—such as CDs, concert tickets, meals and entertainment and travel and lodging expenses—stations are limited to 20 trips per year, coach class air fare and lodging “to cover a period within 24 hours of the live performance or appearance by a Sony BMG artist. Travel and lodging must also pass muster with a designated Compliance Officer.

Full disclosure is a critical element in the settlement—especially when it comes to the FCC’s own regulations. The specific requirements for Sony BMG include: “an announcement that the item is being paid for by Sony BMG or one of its labels will be included in Radio’s broadcast of any on air contest or giveaway.”

Attorney John Wells King of Garvey Schubert Barer told Billboard Radio Monitor that New York's agreement with Sony BMG was “very revealing” and that Spitzer's investigation exposed “practices that cut across a broader swath than simply sponsor ID for paid matter.” King said that the settlement with Sony BMG likely will have implications on a national level, with some “congressional fallout” in the same way that the original state-level investigations into payola in the 1950s turned into congressional hearings.

> For full coverage on the Sony BMG / Spitzer settlement visit Billboard.Biz/spitzer.