Undercover payments for the promotion of something. For example, disk jockeys are secretly compensated to play particular songs.Case Study
In April 2007, four major broadcasting companies—CBS Radio, Citadel Broadcasting, Clear Channel Communications, and Entercom Communications—pleaded guilty to Federal Communications Commission charges of payola and agreed to pay the U.S. Treasury $12.5 million. The FCC had claimed the firms' stations had accepted cash and other incentives in return for playing certain music. Receiving payment for airing program material is illegal unless disclosed by the station, which must identify who made the payment. The radio companies also agreed to implement compliance plans and to broadcast the equivalent of 8,400 half-hour segments of music from independent artists. The FCC charges followed a 2005 settlement by Sony BMG Music Entertainment to pay $10 million after an investigation by New York Attorney General Eliot Spitzer. Spitzer claimed the company paid for contest giveaways, covered some of the stations' operational expenses, and provided vacation packages in return for receiving additional airplay. After a series of payola scandals in the late 1950s, federal legislation in 1960 made it illegal to offer money or other inducements to give records airplay without proper disclosures.