July 25, 2005 @ 1:37 pm

Sony BMG Agrees to Pay $10 Million in Payola Investigation

by: Alyssa Rashbaum

The company - which houses labels including Arista Records and So So Def Records, as well as artists like Whitney Houston, Outkast and Shakira - also says it will stop making payments and providing gifts to radio stations and their employees in return for airplay - a practice known as payola.

Attorney General Eliot Spitzer announced the agreement today and said in a statement that "our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, air time is often determined by undisclosed payoffs to radio stations and their employees. This agreement is a model for breaking the pervasive influence of bribes in the industry."

After a year-long investigation, including looking into email correspondence, Spitzer's office deduced that Sony BMG and its record labels had used the practice of payola in a number of ways including offering bribes to radio programmers and setting up contest giveaways on radio stations. In some cases, fictitious contest winners were used to document transactions and make it appear as though the payments and gifts given to station employees were going to radio listeners.

Sony's $10 million will go to the Rockefeller Philanthropy Advisors which will distribute the money to New York State not-for-profit organizations aimed at funding music education and appreciation.

Article tags: Outkast, Shakira, Whitney Houston, Sony Bmg, Arista Records, So So Def 

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