Sony faces the music
Diskery settles promo probe with $10 mil fine
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Terms of the settlement, said to include a $10 million fine, were being hammered out late Friday.
Spitzer is investigating the radio promotion practices of all four major labels -- Universal Music Group, EMI Group, Warner Music Group and Sony BMG -- to determine if they violated federal law by using middlemen to plug songs to radio programmers in New York State.
As part of the settlement, Sony BMG is expected to agree to change some of its practices related to radio promotion, and may end the use of independent promoters altogether.
The agreement could serve as a blueprint for settlements with the other major labels.
Among the dozen or so Sony BMG executives who have been deposed in the course of the investigation is Don Ienner, president and chief executive of Sony BMG's Sony Music Label Group.
Radio play is considered the most important factor in the commercial success of a record, and the labels have used many methods -- both subtle and overt -- to get songs on the air.
Since the 1950s, federal law has prohibited disc jockeys from accepting money or gifts in exchange for playing songs unless they disclose the payments to listeners.
Instead, the labels paid middlemen known as "independent promoters" who pay large fees to radio stations for playlists and use myriad other methods to curry favor with radio programmers.
Since the investigation began, the labels have reportedly reformed some of their radio promotion practices, including setting limits on gifts their execs give to radio programmers, such as restricting them to a "life event," like a wedding or the birth of a child.
(Dow Jones contributed to this report.)
