Spitzer Probes Radio, Label Links

New York State Attorney General Eliot Spitzer appears to be searching for a paper trail linking record labels, independent radio promoters and New York radio stations to unlawful business practices.

EMI on Oct. 22 confirmed that it is among companies in the music and broadcast industries that received a request seeking information "in connection with the promotion of records on New York radio stations," but noted it "has a longstanding, strict written policy prohibiting unlawful radio promotion practices."

Warner Music, Universal and Sony BMG declined to comment.

Last May, after a two-year investigation, Spitzer's office reached a $50 million settlement with major labels regarding unpaid royalties to artists and songwriters whom the labels claimed they couldn't locate (Billboard, May 15).

Reports that Spitzer was again targeting labels left some industry lawyers shaking their heads.

"He won't find anything at the labels," one attorney says. "Radio stations have so much control. They lay down the law."

Major labels may not be the primary target, however. Sources tell Billboard that the subpoenas are broad enough to include the companies' subsidiaries, and that independent radio promoters and radio stations were served as well.

Labels may have invited this kind of inquiry, a former promoter says. "Their longstanding philosophy that radio play must be timed and controlled" to ensure that a record shoots up the charts in a certain pattern, or it will be a flop, puts pressure on promoters.

While many industries involve exchanging favors to maintain business relationships, federal law requires radio stations to announce sponsorship of material broadcast—whether in the form of money, services or other "valuable" consideration.

"It's one thing to pay a promoter a weekly sum to get a record out to radio," an artist's manager says. But the situation gets "more complicated" if the promoter wants a bonus—or a double bonus—when the record is added to the playlist or moves up the charts.

Although the attorney general's office declined comment, how chart movement is orchestrated will probably be the focus of the inquiry.

Sources tell Billboard they believe it will take months for Spitzer's office to conduct its investigation and determine whether any illicit activity has even taken place.