- The Washington Times - Thursday, May 11, 2006

ALBANY, N.Y. (AP) — Universal Music Group Recordings Inc., the world’s largest record company, agreed to pay $12 million to settle a payola case that asserted the company provided vacations, electronics and other bribes to increase radio play for their artists, New York Attorney General Eliot Spitzer said yesterday.

The bribes and gifts were used to gain airplay for songs that included records by Nick Lachey, Ashlee Simpson, Brian McKnight, Big Tymers, and Lindsay Lohan, Mr. Spitzer said.

The California company agreed to pay the cash to charity along with $100,000 to cover the cost of the investigation and to adopt reforms, Mr. Spitzer said. The company didn’t admit guilt, but acknowledged “various employees and independent promoters acting on behalf of the company” engaged in the illegal practice, Mr. Spitzer said.

“UMG has illegally provided radio stations with financial benefits to obtain airplay and boost the chart position of its songs,” Mr. Spitzer said in papers filed in state Supreme Court along with the settlement.

“UMG has obtained airplay for its songs through such deceptive and illegal practices as bribing radio station employees, on occasion, to play UMG songs, providing a stream of financial benefits to radio stations, to assist with stations’ overhead costs or to provide promotional support, on condition that UMG records receive airplay,” Mr. Spitzer stated. UMG was also accused of “engaging in fraudulent call-in campaigns to increase airplay.”

In January 2003, a WFLY-FM program director was provided use of a Miami hotel room for playing “Shoulda, Coulda, Woulda” by Brian McKnight and putting it on the Albany, N.Y., station’s playlist, Mr. Spitzer said.

The room was listed as a contest prize for accounting purposes. UMG e-mails showed WFLY asked UMG to provide an airplane trip to Madrid to see U2 perform last year, but required assigning the better seats to the program director and less-expensive seats to contest winners, according to the court filing.

The same program director was provided a Miami hotel stay in exchange for playing a Nick Lachey song and he received use of a hotel room in New York City in April 2004 along with Yankees tickets.

“We have been working cooperatively with the attorney general’s office in resolving these promotion issues and are pleased to have completed the process with this agreement,” UMG said. “The reforms that we have agreed to with the attorney general are consistent with the policies that we voluntarily implemented over a year ago.”

“Consumers have a right not to be misled about the way in which the music they hear on the radio is selected,” Mr. Spitzer said. “Pay-for-play makes a mockery of claims that only the ‘best’ or ‘most popular’ music is broadcast.”

Mr. Spitzer began a nationwide investigation in 2004 into reputed wrongdoing by music and radio companies. Sony’s music arm has already has agreed to pay $10 million to settle with Mr. Spitzer, and Warner Music agreed to a $5 million settlement.

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