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Payola

Payola--practice of paying a DJ to play a record

• potential source of corruption

Common tactics used by record promoters:

• accepting $$
• new clothing
• wine & dine
• travel expenses
• special arrangements
  • e.g., Dion & the Belmonts will show up at your next record hop if their latest song gets played
• extremes: sexual favors or drugs

Payola Investigation

Harris Subcommittee on Legislative Oversight opened an investigation into the legality of payola, publishing a memo on 11/14/59 ... resulting in a list of "Forbidden Practices," including the following ...

Forbidden Practices:

• networks favoring records on labels they owned
• radio/TV employee received payments for playing records
• payment in the form of false loans or mortgages
• employee ownership of publishing company, talent, record company, or pressing plants
• supplying false info about record sales
• employee receiving recordings to sell to record stores

Alan Freed was fired a week later by both his radio & TV shows!!

Harris Subcommittee Hearings Begin (12/7/59)

• based on Federal Communications Commission (FCC) & Federal Trade Commission (FTC) findings, the subcommittee decided to investigate findings from 27 cities in which researchers had unearthed payola allegations
  • began in Cleveland (earlier home of Freed)
  • turned into quite a circus ... it was, after all, coming up on an election year
• quizzed DJs about "consultant" and "listening" fees paid to them by record companies

Two Congressional Bills Introduced:

• Rep. John Bennett (R., Michigan)--would punish payola with a fine of $5,000 and two years in jail
• Rep. Emmanuel Celler (D., NY)--would make both the giving and taking of payola a crime
  • announced that payola was responsible for the "cacophonous music called rock and roll"!!!!

"Tip" O'Neill (Boston)--relayed that talking to delegates to a White House Youth Conference had convinced him that "American youth must be safeguarded from the demoralizing effects of payola and 'a type of sensuous music unfit for impressionable minds'" (Ward, Stokes, & Tucker, 1986, p. 213)

Dick Clark had been called to appear in April 1959:

• Jamie Records: invested $125 in 1957, giving him a percentage of the firm
  • received $31,575 in salary for "advice" & profits before selling in 1959 ... that's an 11,900% return on his investment!!
• Chips distributing company: invested $10,000 & the company made a profit
• Swan Records: 50% ownership deal ($45,000 in salaries over 2 years)
• owned two publishing companies: Sea Lark & Arch
• partial ownership of the copyright for "At the Hop"
  • claimed to have updated the lyrics
• accepted furs & jewelry for himself & his wife from Lou Bedell of Dore Records
  • claimed surprise that Bedell had written them off as "promotion"(!!!!)
• Clark was set free
  • considered "product of the system, not responsible for it"
  • is this a double standard? ... note what happened to Freed (see below)

Freed Fiasco

• May, 1960: Freed (along w/7 others) was once again arrested by NY District Attorney on payola charges, just as he was about to begin a new job in L.A.
• 12/62: stood trial, eventually exhausting all of his financial & physical resources on appeals and legal maneuvers
  • fined $300 & given a 6-month suspended sentence
  • afterwards, couldn't find work
  • to add insult to injury, the IRS charged him with failing to report income of over $50,000
• his health deteriorated, dying less than a year after this final disgrace (1/20/65)

FCC introduces Rule 317

• ordered stations to either pay for the records they played or announce that they'd gotten them for free
• to specify which parts of a program consisted of material the station had been paid for
• to specify what promotional considerations had been given in respect to broadcast content, etc.

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