From the New York Times by Jeff Leeds:
"Eliot Spitzer, the New York State attorney general, has recently taken on a procession of corporate powers from Wall Street analysts to mutual funds to insurance brokers. Now he is casting his eyes on the music industry, particularly its practices for influencing what songs are heard on the public airwaves.According to several people involved, investigators in Mr. Spitzer's office have served subpoenas on the four major record corporations - the Universal Music Group, Sony BMG Music Entertainment, the EMI Group and the Warner Music Group - seeking copies of contracts, billing records and other information detailing their ties to independent middlemen who pitch new songs to radio programmers in New York State. "
"The major record labels have paid middlemen for decades, though the practice has long been derided as a way to skirt a federal statute - known as the payola law - outlawing bribes to radio broadcasters.
"In this instance, Mr. Spitzer might proceed on the ground that broadcasters' dealings with middlemen severely limit the opportunities available to those artists who cannot afford to hire them.
These promoters flourished throughout the 1980's and most of the 1990's, but their influence began to weaken after Congress deregulated the radio industry in 1996, allowing for an extensive consolidation that tilted the balance of power to a handful of newly created broadcasting mammoths. "
Comments