The messy suicide of commercial radio series; (part 10) payola isn’t dead. It always smelled like that (III)

As a result of the hearings, Clark was forced to divest himself of many of his side businesses, ancillary to his hit television show American Bandstand. He sold off several record and music publishing companies that were deemed a conflict of interest with his main business. Alan Freed, one of the most powerful DJs on the air, got the brunt of the committee’s ire.

Although the fines didn’t amount to much, he could no longer find work. His testimony made him an industry pariah. Within seven years, he had drunk himself to death.

After the hearings, the government quickly passed a law against payola. The 86th Congress voted in the Communications Act Amendments on September 13, 1960, with the stated purpose of

[promoting] the public interest by amending the Communications Act of 1934… to impose limitations on payoffs between applicants; to require disclosure of payments made for the broadcasting of certain matter; to grant authority to impose forfeitures in the broadcast service, and to prohibit deceptive practices in contests of intellectual knowledge, skill, or chance; and for other purposes.

At the level of the individual radio station, this legislation had a chilling effect on the DJs were the recipients of the payola, they no longer got to pick their own music to prevent even the appearance of influence on the individual shows. The era of the powerful DJ ebbed for about a decade, until free-form FM became a popular format (after which that fell by the wayside due to Selector). Instead, the responsibility fell to the program director and outside consultants. This actually made the record promoter’s job easier. Instead of taking care of six disc jockeys, the payoffs just went to the program director, actually cutting the payola budgets for a while. In addition, the methods become somewhat more subtle.

Into the 1960s, when he joined Atlantic Records’ promotion team, Juggy Gayles continued to give out money for airplay. “They all took and everybody paid!” he said. “They used to give me money to go on the road and ‘take care of the guys.’ Some of the [program directors] would say, ‘I don’t want money from you.’ I told them they gave it to me to give to you. Take it.”

How deeply ingrained was payola? Consider the reaction of Coed Records when its own payoffs were discovered. Through the late 1950s and early 1960s, Coed had a slew of hits with modified doo-wop songs like the Crests’ “16 Candles,” “You Belong to Me” by the Duprees, and “The Last Dance” by the Harptones. When it came to light in U.S. Tax Court in 1967 that the label had deducted almost $19 000 from its taxes in the two years before the Communications Acts Amendments were passed, money it had paid “to disc jockeys and other employees of various radio stations for the purpose of influencing such individuals to give preference to the playing” of its singles, the label argued that “the practice of payola was common in the industry for many years. It said a company that failed to make these payments would not have its records played.”

This view of the relationship between radio and record sales persisted as the conventional wisdom of the record industry. “We have become, year by year, so dependent on radio exposure of our records that without that play, we’re cooked,” said Warner Bros. VP of creative services Stan Cronyn in 1973. “In the last 10 years, and dramatically in the last five, the record business has sold only what it could get played.”

Payola remained like a boil under the skin of the entertainment business. You couldn’t help but be aware of it if you were in the business, but it wasn’t evident to anyone outside. As one FTC official had predicted at the end of the 1959 investigations, “It may not be exactly payola, but it’ll be something else, something subsurface.”

In the 1970s, it erupted again in a series of angry pustules. A Newark federal court began to investigate the industry’s mob connections, pay for play, sex for play, and a new variation on the theme, drugs for play, which was dubbed “drugola.”

One of the investigation’s chief sources from within the record business was a former vice president of Columbia Records named David Wynshaw. Wynshaw had been the right-hand man for former company president Clive Davis, whom the company had dismissed under a cloud of financial malfeasance that involved misappropriation of nearly $100 000 of Columbia money for home decorating and his son’s bar mitzvah. Within the company, Wynshaw had a number of unflattering nicknames, like “the Royal Procurer,” but he loved his job. “I took all the artists around town when they came in. I’m known at the Copa and the Waldorf… . I liked the action.”

Wynshaw claimed that Columbia spent at least a quarter of a million dollars a year just on payola to R&B stations, which it distributed through the promotion company run by Kal Rudman, who also published the highly influential tip sheet The Friday Morning Quarterback.

Wynshaw allegedly also had ties to a reputed member of the Gambino crime family, Pasquale Falcone, who worked as a talent manager and was accused of trafficking heroin on the side.

Once again, the airplay the company purchased primarily benefitted African American performers, as the scandal centered around the Columbia-distributed custom label Philadelphia International Records, purveyors of records by the O’Jays and dance hits like “The Hustle.”

In the wake of these investigations, the Los Angeles district attorney’s office began to look into allegations that record companies in the city used cocaine to promote their records. “It’s a nice way to make headlines,” observed MCA Records president Mike Maitland.

David Geffen, president of Asylum Records, had more prosaic concerns than just headlines.

He feared a chilling effect, that even the whiff of a hint of “cokeola” would cause radio stations to cut back on their playlists, and hurt the chances of getting new talent on the air. “If Joni Mitchell were just starting out today,” he said, “she’d have trouble getting radio air play in this climate. Radio stations are afraid to take a chance on new artists unless they have huge hits because they’re afraid they’ll be questioned about whether they were paid off to play them.”

Through 2005 and 2006, coincidental with announcing his aspirations to run for governor of New York, the state attorney general, Eliot Spitzer, launched several high-visibility, sound-bite-friendly campaigns, the most ballyhooed one an investigation into that old standard of the music business: payola. Instead of investigating the receivers of payola, as Congress had in the 1950s and ‘60s when it targeted Dick Clark and Alan Freed – Spitzer went after the record companies. He caught Sony/BMG, Warner Music Group, EMI, and Universal Music Group like kids with their hands stuck in a cookie jar, unable to get loose because that would mean letting go of some cookies.

Spitzer characterised the practice of payola as:

Corrosive to the integrity of competition. It is corrosive to the music industry. It is corrosive to the radio industry… . It is essentially the same scam where instead of airing music based upon the quality, based upon artistic competition, based upon aesthetic judgments or other judgments that are being made at radio stations – radio stations are airing music because they have been paid to do so in a way that has not been disclosed to the public. This is wrong and it is illegal.