Univision to pay $1M in payola settlement agreement


Hispanic-oriented media giant Univision will pay $1M to the US Treasury to settle allegations that it played the recordings of a certain recording company more frequently on its radio stations in exchange for cash payments, without disclosing the relationship to its listeners. Further, it entered a plea in court based on related charges from the Department of Justice. Univision stated that the activities were attributable to a small group of employees and that the company reported the misdoing to authorities.

The settlement with the FCC is in the form of a consent decree.

“Payola — the idea of pay-for-play — misleads the listening public,” said FCC Chairman Julius Genachowski. “This agreement with Univision underscores the FCC’s focus on consumer protection and our commitment to ensuring that broadcasters play it straight with the public.”

Enforcement Bureau Chief Michele Ellison added, “Broadcasters play a critical role in educating and entertaining the public and along with that special role comes some fundamental obligations. We will continue to work with other government agencies, including criminal law enforcement authorities where appropriate, leveraging all the tools at our disposal to protect consumers and prevent them from being misled.” 

From the FCC, Univision agreed to undertake actions going forward typical of the consent decree format, including:

* General prohibition on Univision stations and employees exchanging airplay for cash or other items of value, except under specified conditions, and provided that such exchanges comply with sponsorship identification laws;

* Limits on the size of gifts, concert tickets, and other valuable items that Univision stations and employees can accept from record labels;

* Appointment of a Compliance Officer and regional Compliance Contacts responsible for monitoring and reporting company performance under the settlement; and

* Regular training of programming personnel on payola restrictions.

Univision said that this was in no way an example of the way it does business and that it essentially turned itself in when it discovered the actions of a small group of employees.

In a statement, the company said, “The agreement announced between Univision Services, Inc. and the U.S. Attorney’s Office for the Central District of California and Criminal Division of the U.S. Department of Justice concludes a three year investigation of alleged wrongdoing by certain former employees of Univision Music Group (UMG). The agreement relates to a payola scheme by an isolated group of employees at UMG that took place from in or around 2003 through September 2006. The actions of these employees were undertaken without the knowledge of anyone at Univision outside of UMG. Upon learning of these activities, Univision self-reported to the U.S. Attorney’s Office and has cooperated fully with law enforcement authorities throughout the investigation process. UMG was sold in 2008.”

RBR-TVBR observation: If nothing else, this action underscores the ongoing value record companies see in radio airplay. It would be amusing to watch the labels belittle airplay on the one hand in the push for the Performance Rights Act, and then resort to underhanded and illegal tactics to get airplay on the other, if the stakes in the PRA fight weren’t so enormous.