CBS agrees to pay $2M in payola probe

Published October 20, 2006

ALBANY, N.Y. - CBS Radio Inc. has agreed to pay $2-million to settle New York Attorney General Eliot Spitzer's investigation into gifts or "payola" paid by record companies for air play, Spitzer said Thursday.

CBS Radio is the third-largest radio corporation in the nation and the latest to settle in the investigation of radio station employees getting gifts such as trips and electronic equipment in exchange for playing songs and artists to increase sales. The gifts were often used for on-air contests and sometimes used by radio station employees. SonyBMG, Warner, Universal and EMI had previously settled with Spitzer.

"The sale of the station's valuable air time to the highest bidder violates state and federal laws and robs consumers of their right to know why the songs they hear on the radio are being broadcast," Spitzer said.

Spitzer said pay for play was being done at CBS radio stations in Rochester, Buffalo and New York City.

"CBS Radio is pleased to end this two-year music investigation without litigation," said CBS Radio spokeswoman Karen Mateo. "The company, however, wants to make clear that in entering into this settlement, CBS Radio does not admit to any liability or violation of law."

She said CBS Radio had become aware of the practice and two employees violated the company's policies.