Sony BMG Settles Spitzer Probe

Sony BMG Music Entertainment has agreed to pay $10 million, admit misconduct and stop paying radio station employees to feature its artists as a result of New York Attorney General Eliot Spitzer’s 11-month investigation into possible “payola” practices in the music industry.

The conglomerate also agreed to hire a compliance officer to monitor promotion practices as part of the deal.

Spitzer had also requested documents and information from EMI, Warner Music Group and Universal Music Group; those investigations reportedly remain open. Major radio chains received subpoenas in the investigation, as well.

“Our investigation shows that, contrary to listener expectations that songs are selected for airplay based on artistic merit and popularity, air time is often determined by undisclosed payoffs to radio stations and their employees,” Spitzer said.

“This agreement is a model for breaking the pervasive influence of bribes in the industry.”

Sony BMG paid for vacation packages and electronics for radio programmers, footed the bill for contest giveaways for listeners, paid some operations expenses of radio stations and hired “independent promoters” to provide illegal payments to radio stations to get more airplay for its artists, Spitzer’s probe showed.

E-mails among company executives reportedly showed top officials were aware of the payments.

In one instance, an employee of Sony’s Epic label asked: “What do I have to do to get Audioslave on WKSS this week?!!? Whatever you can dream up, I can make it happen.”

In another case, a promoter unhappy that Celine Dion‘s “I Drove All Night” was being played overnight on some stations threatened to revoke a trip to a Dion show in Las Vegas unless the play times improved.

Spitzer said Sony BMG employees sought to conceal some payments by using fictitious contest winners to document the transactions.

Sony BMG Music is the parent company to several major labels including Arista, RCA, J Records, Epic, Columbia and Sony Music International.

The $10 million will be distributed to not-for-profit entities and earmarked for music education programs, Spitzer said.