31 July 2010

Univision Radio to Pay $1 Million in Payola Inquiry


Univision Radio Inc., a Spanish- language broadcaster, will pay $1 million to settle claims it secretly accepted payment from a record label for playing songs on the air, the Federal Communications Commission said.

“Payola -- the idea of pay-for-play -- misleads the listening public,” FCC Chairman Julius Genachowski said today in a statement. The agency is committed “to ensuring that broadcasters play it straight with the public,” he said.

The broadcaster, which owns or operates 70 stations in 16 U.S. markets, also entered a plea in a related criminal case filed by the Justice Department at federal court in Los Angeles, the FCC said.

The case “relates to a payola scheme by an isolated group of employees” at Univision Music Group from 2003 to 2006, Univision said in an e-mailed statement. New York-based Univision reported the misconduct to federal prosecutors, and the music group was sold in 2008, the statement said. Universal Music Group bought the unit, according to a company statement.

Univision has agreed to train workers on payola restrictions, the FCC said.

Univision was purchased in 2007 by a group that includes Madison Dearborn Partners LLC, Providence Equity Partners Inc., Saban Capital Group, TPG Capital and Thomas H. Lee Partners LP, according to data compiled by Bloomberg.

Four radio companies in 2007 agreed to pay $12.5 million to settle U.S. claims their stations took money and gifts to play certain songs, ending a probe of CBS Radio Inc., Clear Channel Communications Inc., Entercom Communications Corp. and Citadel Broadcasting Corp. The four companies agreed to bar stations or employees from accepting payments to play songs.

In the 1950s and early 1960s, record companies paid radio disc jockeys to play rock ‘n roll songs. The practice was made illegal.

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