(Mar. 8) -- Gifts, trips and cash were used to pave the way for air time for certain songs and artists at radio stations owned by one of the nation's largest chains, according to lawsuit filed by state Attorney General Eliot Spitzer.
The suit filed Wednesday, stemming from Spitzer's "payola" investigation, targets Entercom Communications Corp. (ETM), based in Bala Cynwyd, Pa. The company owns and operates 105 radio stations.
"We have moved from the label side, those who put out the records and are forced to pay for air time, and switched to the radio conglomerates ... that are extracting money," Spitzer said Wednesday. He said payola violates radio stations' federal licenses and New York state civil law. He said the Federal Communications Commission, which he said has been "asleep at the switch" on payola, should consider revoking the licenses.
An Entercom spokesman didn't immediately respond to a request for comment. In February, Spitzer subpoenaed nine of the nation's largest radio conglomerates in his "payola" investigation of major artists and songs that he claims got air time because of payoffs by recording companies.
Two major recording companies agreed last year to settle their parts of the investigation. Warner Music Group Corp. (WMG) said it would pay $5 million, and Sony BMG Music Entertainment agreed to pay $10 million.
Spitzer said Entercom e-mails he obtained include one from an unidentified executive that stated: "These are not optional. They come from corporate and generate millions of dollars for Entercom." Shares of Entercom fell 8 cents to $28.68 in morning trading on the New York Stock Exchange.