MySanAntonio : Metro and State



Well I'm not sure of the Headline. This is full of spin on the situation and there is A LOT more to the story but have a look.



Clear Channel listens to its critics



By L.A. Lorek

Express-News Business Writer



Web Posted : 04/10/2003 12:00 AM



In a move that could dramatically change what gets played on the airwaves, the country's largest radio station owner, Clear Channel Communications, said Wednesday it will sever ties with independent music promoters.



By ending its deals with "middlemen" paid to tout songs to radio stations, the San Antonio-based company says it no longer will have the appearance of "pay for play" relationships.



John Hogan, CEO of Clear Channel Radio, said all of the 11 deals Clear Channel has with music promoters expire in June and July and won't not be renewed.



"This first and foremost represents an opportunity for us to work differently and more cooperatively and collaboratively with the artists and the labels," Hogan said. "The artists and the labels don't like the system."



Clear Channel also has been the subject of intense media scrutiny for months because of its practices, including its relationships with independent music promoters.



Artists and elected officials have been critical of the company's ties to promoters, but Clear Channel repeatedly has said the promoters don't influence what songs get played on the radio.



But some members of Congress think the practice resembles the "payola" scandals of the 1950s and 1960s, in which record companies paid radio station owners or programmers to play their songs. The practice is illegal today.



Clear Channel has taken a step in the right direction, but legislation still is needed to ensure that a replacement "pay for play" system doesn't emerge, Sen. Russ Feingold, a Wisconsin Democrat and one of Clear Channel's critics, said in a statement.



"Congress must also address the anti-competitive behavior in the concert promotion industry and work to ensure more local input into radio programming decisions," Feingold said.



Under current deals, promoters such as Jeff McClusky & Associates of Los Angeles and Tri-State Productions of Cincinnati pay Clear Channel and other radio firms for information about station playlists and for meetings with station programmers.



Analysts estimate promoters pay fees ranging from $20,000 to $300,000 per station.



The promotional fees make up less than 1 percent of the company's revenue, Hogan said.



Jeff McClusky & Associates declined comment on the Clear Channel announcement, a spokeswoman said.



Tri-State Promotions could not be reached for comment.



"This is a wonderful first step," said Ann Chaitovitz, spokeswoman with the American Federation of Television and Radio Artists, the labor union representing singers. "This validates the artists' concern."



The fact that Clear Channel is distancing itself from independent promoters sends an important message that something is wrong with the current system, said Michael Bracy, spokesman with the Future of Music Coalition, a Washington-based nonprofit focused on the music industry.



"This entire system is rife with corruption and needs to be overhauled," Bracy said.



Earlier this year, members of the Senate Commerce Committee questioned Clear Channel executives about the deals.



Sens. John McCain, R-Ariz.; Orrin Hatch, R-Utah; and Feingold raised questions about whether radio station contracts with record company "middlemen" affect the amount of airplay given to particular songs.



The improper appearance of these relationships, in part, has caused the company to sever them, Clear Channel President and Chief Operating Officer Mark Mays said in a statement.



"These relationships may appear to be something they're not," Mays said. "We have zero tolerance for pay for play, but want to avoid even the suggestion that such a practice takes place within our company."



The move comes a few months before the Federal Communications Commission is set to consider further deregulation of media ownership.



The FCC plans to meet June 2 to review six rules of media ownership that currently exist.



Among them, the FCC is looking at whether to loosen the limits on the number of radio stations, television stations and newspapers a single company can own in one market.



In 1996, the FCC and Congress changed media ownership rules in the Telecommunications Act, doing away with some restrictions on radio broadcasting companies.



That deregulation sent Clear Channel on a buying spree. It expanded from 43 radio stations in 1995 to more than 1,200 today, reaching an audience of 104.6 million people each week.



McCain has called for another public hearing within the next few weeks on media ownership deregulation.



The Senate Commerce Committee held one meeting in January on the issue in which Clear Channel executives testified. At that time, executives said that the promoters' contracts did not influence the songs that get airplay.



After the deals with independent music promoters expire, Clear Channel said it would work directly with the recording industry on promotions and marketing.



"We're glad they will not be making decisions based on what kind of promotional budget they have but on the merit of the songs and the tastes of the local community," Chaitovitz said.