Spitzer Settles With Entercom for $4.25 Million

New York Attorney General Eliot Spitzer has settled with Entercom Communications to resolve allegations of "pay-for-play" in the music industry, totaling payments of $4.25 million.

The settlement includes a $3.5 million payment to be distributed through the Rockefeller Philanthropy Advisors to New York State not-for-profit entities to fund music education and appreciation programs, and $750,000 in costs to the state.

Also included are a number of "reforms," according to Spitzer's office:

-- Halting the practice of accepting payments and other inducements from record labels in exchange for airplay.
-- Banning all payments from independent promoters employed as a pass-through for funds from record labels.
-- Hiring a compliance officer to monitor promotion practices.
-- Implementing an internal system to detect any future abuses.
-- Informing radio monitoring services when songs are played through the CD Preview and CD Challenge programs so those services do not count such "spins" toward record popularity rankings.

State Supreme Court Judicial Hearing Officer Ira Gammerman signed a court order settling the lawsuit today (Dec. 27). The suit was filed by the Attorney General's office in March, alleging that Entercom solicited payments from record labels and traded air time for promotional items, personal trips and other items of value.

It also charged that Entercom instituted corporate programs, entitled "CD Preview" and "CD Challenge" that institutionalized the sale of airplay by radio stations, allowing record labels to pay to play their songs in the overnight hours for the purpose of manipulating the music charts.

The Attorney General's ongoing payola investigation has now resulted in settlement agreements with record labels SonyBMG, Warner, Universal and EMI, and with CBS Radio.