FCC Opens Payola Probe of Spanish-Language Radio Stations
The FCC kicked off a wide-ranging payola investigation of Spanish-language radio stations, said broadcast lawyers familiar with the probe. The agency asked stations to report on their dealings with Latin label Univision Music, they said. The inquiry seems to have been sparked by a former Univision executive’s 2006 suit against the label in California Superior Court in Los Angeles, they said.
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Daniel Mireles alleges that Univision fired him that June as vice president of promotion when he balked at making more payments to stations, said the suit. Before being let go, Mireles alleged, he was given $450,000 for such payoffs by an intermediary working with Univision Music. Mireles made deals with 50 or more stations to pay each $3,000 to $10,000 monthly in exchange for play three times a day of eight popular songs on Univision labels, he alleged. Universal Music Group agreed in February to buy from Univision the music label, described by the companies as the No. 1 Latin music company in the U.S. That deal has since been completed, said a Univision spokeswoman. A spokesman for Universal Music didn’t reply to messages seeking comment.
Last week, the FCC Enforcement Bureau wrote stations it said were mentioned in the suit, according to two lawyers who have seen the letters of inquiry, most dated Oct. 16. The letters cited information from the lawsuit, said Francisco Montero, a lawyer who also is a director of the Spanish Broadcasters Association. He has read several of the letters. In the letters, the bureau said the cited information had been corroborated, but not how, Montero said. All of the 50-plus stations cited in the lawsuit could have gotten letters, said Montero and another attorney familiar with the case. The letters ask whether the broadcasters got money from Universal Music from 2002 to 2007 in exchange for playing certain songs, the lawyers said. An FCC spokesman declined to comment.
The lawyers said they don’t know if the FCC sent letters to any major broadcast groups. Mireles said he made his first deal in March 2006 with a “program director at a major radio station in the Los Angeles area,” later arranging similar deals with other stations nationwide. “We're sort of just alerting stations out there that this investigation is underway and obviously urging everyone to cooperate with the FCC in this investigation,” said Montero. “They need to keep an eye out to see if they receive any letters and at least to date it appears that the FCC’s investigation stems from a list that was submitted in connection with this lawsuit. . . . The FCC claims that they have corroborated this, but it’s not clear to me how this was corroborated.”
A lawyer not involved in the probe said the letters of inquiry seem to stand on shaky ground. “In previous years, the FCC generally did not issue an LOI unless the staff believed that there was in fact an issue,” he said. “Increasingly, LOIs are issued on the basis of rumor and allegation.”
The letters also seem to Montero to be based on unsubstantiated allegations, he said. That leaves him with “some misgivings” about the investigation, he said. “I wonder if the FCC may have jumped the gun” by sending letters based on a single lawsuit, he added. “This is sort of a dragnet -- at least it seems to me.”