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The Truth About Payola
Friday, October 01, 2010

When most of us think about payola we get visions of unscrupulous major label executives sending large sums of money to, and showering gifts on, radio DJs and Program Directors in exchange for putting a mediocre artist they’re trying to push on the airwaves. The practice of payola, however, had its start in America as early as the 1890’s, when music publishers paid to have their songs played in beer gardens.

Throughout the early years payola, an act that was given it’s name as a combining of the words Pay and Victrola, went through various incarnations. Artists including Al Jolson and Eddie Cantor had a version of payola where they’d sing a song in exchange for a piece of it. Jolson even netted himself a race horse from one of such deal. In the 1930’s maestros of big-name bands that played new songs on network radio took a cut of the royalties. It wasn’t until the 1950’s that the act of payola became what we recognize it as today.

In the 50’s the landscape of the music industry was very different from how it is now. The major labels were focused on selling what they knew worked, which was, essentially, white music aimed towards an older crowd. They weren’t the borderline unbeatable giants that they are today (or, more precisely, were five to ten years ago, before the industry collapsed). Independent labels focused on catering to the crowds that the majors neglected and didn’t hesitate to sign blues, R&B, gospel, and country acts. Basically, the independent labels catered to the youth, while the majors catered to their parents.

Leonard Chess, the man behind Chess Records, realized that despite catering to a different audience, independent labels were involved in an uphill battle when it came to competing with the major labels, all of which had far greater means for getting their records to radio stations than he did. Chess, not having radio distribution, would fill up the trunk of his car and drive to various radio stations, walk in during a show, greet the DJ with a handshake and a smile, ask him a couple nice questions about his family, and while on his way out slip the DJ a record with a $50 bill in it.

Soon enough those $50 bills that were slipped into records by Chess and men of his ilk became not just bonuses for the radio men, but were also perceived as status symbols. DJs found great pride in being bribed because if they were being bribed it meant that they were thought of us being at the top of their industry. Nobody was going to bribe a nobody.

Variety wrote about their concerns regarding payola in a 1955 article titled “A Warning To The Music Business,” calling the action one of the roots of the pyramiding of evils of the music business. It was a pyramid that a great number of people helped to build and operate.

Two of the biggest names in the music business at that time were Alan Freed and Dick Clark. Both made plenty of money, but after that their stories differ greatly. Freed was essentially on the Chess Records payroll, with Leonard Chess paying him $100 a week and even crediting him as a co-writer on songs just to make sure Chess Records’ artists would get a high number of spins. Cohen wasn’t the only person hooking Freed up like this either. Freed, however, took a huge fall when the Federal Trade Commission did an investigation into payola in 1960 which led to Freed pleading guilty to two counts of commercial bribery and having a fine levied on him. A secondary result from this was that he lost his job. At the time the FTC estimated 250 radio DJs were on the take.

Dick Clark obviously did a much better job of protecting himself. Rather than simply accepting money, he had a far more complex system that involved numerous corporate holdings he had, holdings that included financial interests in three record companies, six music publishing houses, a record pressing plant, a record distributing firm, and an artist management company. Artists involved in any of these businesses were reportedly given preferential treatment, although Clark refused to admit to it, and couldn’t be convicted of anything other than playing the system correctly for the way it was set up.

Leonard Chess always feared a trial may one day happen, which is why he kept all his payments on the books. At the time there was nothing illegal about payola. What people were getting nailed for was tax evasion because they were making and accepting their payola payments off the books. By keeping everything legit, no case would ever be filed against Chess.

After the FTC’s payola trials a federal anti-payola statute was passed, making it a misdemeanor punishable by up to $10K in fines and one year in prison. The act, however, still lives on today, although it no longer is a way for independent labels to get ahead, rather it’s a way for major labels to keep everyone off of the airwaves except for their artists.

In 2005, then New York State Attorney General Eliot Spitzer (who’s now much more well known for something else) thought radio was being manhandled by payola and launched an investigation into it. The investigation turned up a multitude embarrassing emails from Sony BMG that included information on payments made so that Jennifer Lopez, Good Charlotte, Franz Ferdinand, and Nas & Xzibit records would get plenty of airtime. One email exchange even featured a radio station director saying “I’m a whore this week. What can I say?”

In the end, Sony BMG was forced to pony up $10 million, but many in the industry say the act of payola is still alive and well today. In a recent interview, Hot97’s Funkmaster Flex said, “I think things do exist; I think people do plane tickets, I think people do gifts,” adding “I think they're a little more secretive because Spitzer cracked down on radio a lot more, so I don't think people do it as much, or as openly, but I think it exists.”

In a cruel irony, what was once the independent artists’ biggest asset when it came to getting radio airplay is now one of the biggest things shutting them out.


AP - Sony BMG Music settles Spitzer's payola probe
Bernard, Adam (that's me!) - Funkmaster Flex Interview
Bracket, David - The Pop, Rock, & Soul Reader
Cohen, Rich - The Record Men
Fridson, Martin - The Permanent War on Payola
History-of-Rock.com - Payola
Ulaby, Neda - Payola: The Beat Goes On


posted by Adam Bernard @ 7:54 AM  
  • At 2:26 PM, Blogger Tah Phrum Duh Bush said…

    Adam Ber-fkin-nard!!! Dude this has to be one of my all time favorite pieces. You continue to step up the bar bro. Bless up! Thanks for such a rich learning experience in 10 minutes of reading.

  • At 2:01 AM, Blogger Othello said…

    Really good, well-researched piece. I'm gonna have to bring this one in to my journalism class. I gotta wonder how much money Flex racked up in payola to drop bombs for dudes.

  • At 2:21 PM, Blogger Adam Bernard said…

    Thank you both for the tremendous comments/compliments. This is a piece I really enjoyed researching and writing, so I'm glad two highly intelligent individuals like yourselves liked it. It shows I'm doing something right (or is that "write?" Ha!).

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