Corp-Ethics.com - Report: Pay-for-play costs Sony BMG $10m

Company	Sony [Company Info]
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Date	Issue	Title
25th Jul 2005	Questionable Practice	Pay-for-play costs Sony BMG $10m

Report

Sony BMG, the world's second-biggest record label, has agreed to pay $10m (£5.7m) and stop paying radio station employees to play its artists' songs.

The settlement follows an investigation into "pay for play" practices in the music industry, conducted by New York Attorney General Eliot Spitzer.

The probe found "air time is often determined by undisclosed payoffs," said Mr Spitzer on Monday.

Record companies in the US cannot offer financial incentives under a 1960 law.

A Sony BMG spokesman was not available for comment.

But Mr Spitzer said the company had agreed to hire a compliance officer to monitor promotion practices and to issue a statement acknowledging "improper conduct".

"This agreement is a model for breaking the pervasive influence of bribes in the industry," he said.

Spitzer said his investigation showed Sony BMG paid for holiday packages for radio programmers, paid some stations' operational expenses and hired middlemen to make illegal payments to get more airplay for its artists.

E-mails showed top officials were aware of the payments, he added.

Sony BMG was formed in 2004 when Sony merged with Dutch giant Bertelsmann.

Its roster of artists include Beyonce Knowles, Aerosmith, Britney Spears and Elvis Presley.

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