Universal Agrees To $12 Million Dollar Payola Settlement
Universal Music Group (UMG) finalized a payola settlement with New York Attorney General Eliot Spitzer for $12 million. The settlement, part of a larger payola investigation by Spitzer, was over allegations that it engaged in pay-for-play radio arrangements (payola). The $12 million fine will be distributed to not-for-profit entities to fund music education and appreciation programs. UMG labels Island Def Jam, Interscope, Universal Motown Recordings Group, Uni-South, Universal Nashville and Verve were spotlighted in the settlement with Universal artists Lindsay Lohan, Nick Lachey, Ashlee Simpson, Brian McKnight, and Big Tymers cited as payola beneficiaries.
The Universal announcement follows similar agreements with Sony BMG ($10 million in July, 2005) and Warner Music Group ($5 million in November, 2005).