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IN THE NEWS: Hefty FCC fine on radio stations in payola case sends message
Four of the nations largest radio conglomerates last week reached a $12.5 million settlement with the Federal Communications Commission in a 2004 payola case – one of the largest deals levied by the regulatory panel. The four radio groups were Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp.
IN THE NEWS: Hefty FCC fine on radio stations in payola case sends message
Four of the nation's largest radio conglomerates last week reached a $12.5 million settlement with the Federal Communications Commission in a 2004 payola case — one of the largest deals levied by the regulatory panel. The four radio groups were Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp.

EXPERT OPINION: Dr. David von Palko, professor of communication at Austin Peay State University and director of the University's broadcast and cable operations, said the FCC fine might not be enough to end payola.

“The $12.5 million may sound like a significant sum, but when you're dealing with these huge broadcast entities, that's not really a great deal of money in their world,” von Palko said. “For them, it's the cost of doing business. And in this particular case, the settlement is being prorated among the four corporations involved. According to Fox News, Entercom will pay $4 million; Clear Channel, $3.5 million; and Citadel, $2 million, leaving CBS to pick up $3 million of the tab.”

Payola consists of payments that are kept secret. Payments, in the form of money or gifts, are made between radio station programmers and record company representatives in exchange for more airplay of a particular song. Payola is illegal under the rules of the Federal Communications Commission and legislation Congress passed following the payola scandals in the late 1950s.

For radio listeners, payola leads to “a loss of diversity” in the music a station airs, von Palko said.

“The local flavor of radio is lost, and stations now are national in nature,” said von Palko, who began his broadcast career in the early 1970s in Phoenix, Ariz. “This also places independent artists in a disadvantage because even though they account for nearly 40 percent of record sales, they have only 10 percent of commercial airplay. That's why the most significant aspect of the settlement is that the corporations also have agreed to provide a significant amount of free airtime to independent and local artists — some 8,400 half-hour segments according to Associated Press reports.

“What I'm hoping will happen as a result of this FCC settlement is that we may again have great diversity in the music we have on the air. That benefits everybody.”

For further comments or more information, contact von Palko by telephone at (931) 221-6364 or by e-mail at vonpalkod@apsu.edu.

Created by the APSU Office of Public Relations and Marketing, “Local Angle” is a service to selected media. Telephone Dennie Burke at (931) 221-7450. The opinions expressed are those of APSU faculty and do not represent the official opinion of Austin Peay State University.