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Warner Music Group Settles Payola Case for $5 Million

By: SoundSlam
Published: Nov. 28, 2005 - New York, NY


Eliot Spitzer is on a roll. The New York Attorney General who recently launched an attack against payola, an illegal system of pay for play, has just reached an agreement with another major player in the music business. This time it is Warner Music Group anteing up to sum of $5 million.

Earlier this fall, Spitzer reached a $10 million agreement with Sony BMG. Under this new agreement with Warner Music Group, Warner will stop practicing the method of offering radio programmers free gifts in exchange for playing Warner Music Group's artists. The money that Warner must pay will be distributed by Rockerfeller Philanthropy Advisors to New York State, and will go towards the funding of various music programs throughout New York.

Warner Music Group is home to many of music’s top artists. Aside from Greenday and Madonna, Missy Elliot, Mike Jones, Paul Wall, Little Brother, and T.I. are all part of the label. And while Spitzer criticized record labels and radio stations, he did not attribute any blame to the artists themselves. In fact, Spitzer sees artists as benefiting as a result of his efforts. “Artists, especially new artists and lesser known artists who did not have major backing, should find a more open environment to have their music heard and hopefully succeed,” said Spitzer.

While Spitzer is currently the Attorney General for New York, he hopes to soon be the governor. He will run as a democrat in the 2006 election. Even though he has seen success with Sony BMG and Warner Music Group, he is not prepared to stop. “Unfortunately, other companies continue to engage in the practices…I applaud Warner's decision to halt this conduct, cooperate fully with my office, and adopt new business practices,” he said.

Warner Music Group gave out such gifts as free ipods, Superbowl tickets, as well as seats at the World Series and MTV awards. Will Tanous spoke on behalf of Warner Music Group and seemed optimistic of about the changes being made as a result of this agreement. “The reforms we have agreed to with the attorney general are consistent with the internal reforms that our new management team implemented earlier this year. We consider this to have been a valuable process.”

Spitzer has also criticized the FCC for not taking a tougher stance on this payola, and still believes they have not acted enough on this issue. He is currently seeking documents from EMI and Vivendi Universal.


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