After the latest multi-million-dollar fine for record company payola, Scott G speculates that there is a lot more under the surface that could be happening, from holding executives up to public ridicule, to terminations of employees, to (most especially) new fines in state after state after state

A cheer went up at the announcement of the twelve million dollar fine against Universal Music Group (UMG) for bribery and pay-for-play activities (commonly called payola). This comes after prior celebrations for the ten million dollar fine against Sony BMG and the five million dollar fine against Warner Music Group for the same shoddy business practices.

All are nice enough news items. Eliot Spitzer, Attorney General for the State of New York, who spearheaded these investigations, is to be congratulated along with his entire staff, and they should be encouraged to continue.

Oh sure, the country has more pressing problems than the phony chart positions of mainly forgettable artists. Or the blatant, illegal, disreputable and disgusting business dealings of rapacious record conglomerates and their equally culpable partners-in-crime, the radio broadcasters who were in on the scam.

It might be pointed out that clean air, access to healthcare, decent roads, fair taxation, dedicated nursing homes, and less urban congestion are more pressing issues. But still, it’s good that somebody had to pay some sort of a fine for payola.

The long list of payoffs, trade-offs, gift-giving, fake sponsorships, and falsification of results is both fascinating and sad. (By the way, you don’t suppose this is also the business model for some of the awards ceremonies? This is a topic for another investigation, don’t you agree?)

Back to the fines. Twenty-seven million so far. Wow. That’s a lot, isn’t it? Well, let’s see, payola has been occurring during the rock ‘n’ roll era for more than half a century, so the fines average out to less than a quarter-million per year per record company. To these firms, that’s a drop in the bucket. Just part of the cost of doing business.

The real money will come in further lawsuits. For example, Spitzer has not yet dealt with the fourth major record corporation, EMI. Nor has he brought any justice down on the heads of those pesky radio broadcasters, but in Spitzer’s sights, according to some, are giant radio organization Clear Channel, and the significantly smaller but quite powerful Entercom, Citadel, and CBS Radio (formerly Infinity Broadcasting).

A PEOPLE BUSINESS
Many of us are appalled that out of all the evidence in these three cases, only one employee has been fired, at least according to the public records I’ve seen.

That’s correct. Of all the record company executives, record label promotion departments, independent promotion firms, radio conglomerate executives, radio station programmers, radio station employees, and phone request vendors involved in the bribery and chicanery, exactly one person has lost his job.

Reading through the UMG paperwork, an 87-page Exhibits of Assurance and a 41-page Assurance of Discontinuance (gotta love that legal language), and discussing the case with recording artist photographer Snook, we were struck by a few things:

WHERE’S OUR MONEY?
The most recent fines were payable to the State of New York, and will be distributed through the Rockefeller Philanthropy Advisors to New York State not-for-profit entities to fund music education and appreciation programs. Okay, fine. But how much money are they going to pay to the State of California? Or any of the other states? It seems to me that all 49 remaining states are entitled to prosecute and collect. After all, the deceptive business practices that mislead and cheated residents of New York also affected the rest of us. Where’s our state’s money? Is your state’s Attorney General proceeding against all of these firms on your behalf?

CHART ACTION
Will Billboard and Radio and Records magazines issue corrected record rankings so that history shows which songs legitimately achieved chart status? These magazines are, after all, respected members of the journalistic profession, so if they ignore this situation, should we think they were in on the con?

A TAXING SITUATION
Everybody involved with the dodge had to file taxes. If they were making the bribes, they probably claimed it as a business expense. If they were taking the bribes, they had to report it as income (or their firms had to do so). Therefore, isn’t there the little matter of filing false income tax returns? Inquiring minds want to know.

ARTIST ACCOUNTING
All of the bribery was conducted to boost artists’ careers and increase corporate revenue through the use of artists’ talent. But I’ll bet every dollar spent by the record companies was charged off against the artists in question. Don’t all these acts now need a new accounting that shows where they were being illegally charged? The way things now stand, it’s as if the pimp got arrested and the money confiscated, which means the girls who did all the work (the recording artists, in case you’re not following this analogy) are, you guessed it, getting screwed again.

NAMING THE RIGHT NAMES
It’s fun to name the artists whose recordings were mentioned in the Spitzer investigation. But the artists aren’t to blame for the bribery. They created the music, not the illegality. They did the work, and they followed record company instructions about where to perform and where to show up for an interview, yet today their names are the only ones you read about in the press when it comes to reporting on this ugly mess. I’d like to hear from readers if you agree that it would be nice to post the names of the people involved at the three (so far) record companies, the four radio broadcasting conglomerates, and the indie promo firms doing a lot of the dirty work, including Jeff McClusky & Associates, Bishop, Bait & Tackle, Michele Clark Promotions, Kilgo Marketing, Bill McGathy and National Music.

Let us know what you know when you know it, y’know?

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About The Author / Editor:

Scott G owns G-Man Marketing in Los Angeles (gmanmarketing.com), where he consults on marketing and sonic branding, creates cross-media advertising campaigns (print, broadcast, Net), produces radio commercials, and composes music and aural IDs for radio and TV spots. He's also partner in Golosio Publishing(songsandsoundtracks.com). © Scott G. (Note: The opinions expressed by The G-Man do not necessarily reflect the opinions or policies of this site or its publisher.)
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