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EMI Settles with Spitzer, Pays $3.75 Million Fine

EMI has settled (Terms of Settlement PDF) with the state of New York over alleged radio pay-for-play violations, Billboard Radio Monitor reports. EMI will pay a $3.75 million fine (in the form of a charitable donation to New York State not-for-profit music education and appreciation programs) and agree to reform its radio promotion practices and have agreed to stop making payments and providing expensive gifts to radio stations and their employees in return for airplay.

EMI bribed radio station programmers with video games, vacations, airfare, hotel accommodations and tickets to concerts; picked up the tab for radio operational expenses and contest giveaways; engaged in fraudulent call-in campaigns to increase the airplay of particular songs; and used independent promoters—including Jeff McClusky, Bill McGathy and Michele Clark—to funnel illegal payments to radio stations (List of NY State Exhibits PDF).

The agreement comes a month after Spitzer’s office settled with Universal Music Group for $12 million. Spitzer cut similar deals last year with Sony BMG, which agreed to a $10 million settlement, and Warner Music Group, which settled for $5 million. Sources familiar with the situation say that the sizes of the settlements are based on market share. Spitzer has also filed a lawsuit against Entercom Communications Corp. for pay-for-play abuses.

Probes into the promotion practices of a number of radio conglomerates—including Clear Channel, Cox, Infinity, and Emmis—are ongoing.