SCRIPT: Music's Dirty Little Secret 2/16/06

Last week were the Grammy awards. And tonight our story takes you inside what some say is a dirty little secret of the music business. Do some songs get on the radio just because they're good or do they get a boost from something that has very little to do with talent and may even be illegal? Here's ABC Chief Investigative Correspondent, Brian Ross.

BRIAN ROSS, ABC NEWS

It became the number one song in the country, "Closing Time," by a new group from Minneapolis called Semisonic.

JAKE SLICHTER, DRUMMER

We had always been like the little unknown band with songs that very few people knew.

BRIAN ROSS

The ride to the top of the music charts was an "American Idol" dream come true for drummer Jake Slichter.

JAKE SLICHTER

I remember the first time we played "Closing Time" when it was a number one hit, Washington, DC, at RFK Stadium. The song sort of starts quietly, and you could feel the sort of peel of screams kind of go back through the crowd. When I crashed the cymbals on the downbeat of the chorus, you could just feel this incredible like tidal wave of energy, and it just like whoosh. We'd been playing rock music our whole lives, and this is like, this is that moment that was like...

BRIAN ROSS

That was the moment you felt ...

JAKE SLICHTER

Oh.

BRIAN ROSS

"I made it."

JAKE SLICHTER

Wow, yeah.

BRIAN ROSS

"I'm a rock star."

JAKE SLICHTER

Yeah, yeah, absolutely. That is a rock star moment.

BRIAN ROSS

But as the song started to spread across the airwaves of American radio, from Los Angeles to New York, the new rock star says he was let in on one of the secrets of his band's success, payola.

JAKE SLICHTER

We definitely benefited from payola, there's no doubt about it.

BRIAN ROSS

Payola. What many authorities would call bribes. Money and gifts given to radio stations, record companies and middlemen to play "Closing Time," and it turns out many other songs.

JAKE SLICHTER

It cost something close to $700-, $800,000 to get "Closing Time" on the air.

BRIAN ROSS

In payments to radio stations.

JAKE SLICHTER

Yeah, to keep it on the air long enough for people, for public taste to really grab on to it, yeah. A chunk of change.

BRIAN ROSS

A multi-million-dollar secret that was out in the open at last week's Grammys festivities in Los Angeles. Where a number of recording artists on the red carpet said it was an unfortunate part of the industry. From veteran Tony Bennett...

REPORTER

Do you believe payola still exists?

TONY BENNETT, SINGER

Absolutely. It costs a lot of money to make something famous.

BRIAN ROSS

To Taylor Hawkins, the drummer of the Foo Fighters.

TAYLOR HAWKINS, DRUMMER

I think that's been going on a really, really, really long time. I think back in the '70s, they used to pay people with like, you know, hookers and cocaine. And now they're just doing it with straight-up money so they can go out and buy their own hookers and cocaine.

BRIAN ROSS

According to music industry documents, payments to radio stations in a variety of forms have been used to help launch some of the country's best-known hits and Grammy winners, including last year's Grammy song of the year, "Daughters" by John Mayer and the winner of last year's best new artist Grammy, Maroon 5. While the songs like Maroon 5's "Sunday Morning" became hugely popular, it took more than just popularity and talent to get them played on the radio. They were beneficiaries of what the New York Attorney General calls payola.

ELIOT SPITZER, NEW YORK ATTORNEY GENERAL

It is certainly the case that payola has been part of the promotional structure for many of the artists who are out there. The objective is airplay.

BRIAN ROSS

New York Attorney General Eliot Spitzer says the latest version of payola involves the highest corporate levels of record labels and radio broadcasting companies.

ELIOT SPITZER

It is still about airtime. Airtime drives sales. Sales means revenue. And the way a song gains popularity is still to be heard over the air by the listening audience.

BRIAN ROSS

It's a practice that goes back to the beginning of rock 'n' roll in the 1950s, when songs by Chuck Berry were linked to payola.

ELIOT SPITZER

Historically, it had been cash, other contraband, favors of illicit sorts that were given to deejays to get airtime for various labels. But the process and mechanisms of payola became more institutionalized over the decades.

BRIAN ROSS

The key to Spitzer's investigation are internal record company emails that the Attorney General says lay it out in black and white, who gets paid what for which song, including songs by Jennifer Lopez. The emails reveal how Sony/BMG bought airtime for J-Lo's "Get Right" last year, what are called spins in the music business. "Please be advised," reads one email, "that in this week's Jennifer Lopez top 40 spin increase of 236, we bought 63 spins at a cost of $3600." Each spin, each time it's played on certain stations, helps the song move up the music charts.

ELIOT SPITZER

And if you can manipulate those so that a song appears on that listing, again, that triggers not only more airtime but more sales.

BRIAN ROSS

To get more air play for Celine Dion's song "Goodbyes," Sony's Epic Records cut deals with the CBS radio division, known then as Infinity Radio. In exchange for free trips to Las Vegas, 13 CBS radio stations, according to this revealing email, agreed to report "Goodbyes," apparently meaning the stations reported the song to the top 40 chart keepers.

ELIOT SPITZER

Never talk when you can nod. And never nod when you can wink. And never write an email. Because it's, it's death. You're giving the prosecutors all the evidence we need.

BRIAN ROSS

Spitzer's investigation has now led him to the radio industry and to radio program directors like Dave Universal, the gatekeepers to airtime.

DAVE UNIVERSAL, FORMER RADIO DIRECTOR

Apparently I'm the poster boy for payola. Little ol' me.

BRIAN ROSS

Before he was fired in the wake of the Spitzer investigation, Universal decided which songs got on the air at Kiss-FM in Buffalo, New York, owned by one of the biggest radio conglomerates, Entercom.

BRIAN ROSS

And how much money went through you from all the record companies?

DAVE UNIVERSAL

I'd say we usually raised probably about $100,000 a year.

BRIAN ROSS

$100,000 a year?

DAVE UNIVERSAL

Yeah, I did really well. I was Entercom's golden boy for a long time.

BRIAN ROSS

He doesn't like the term "payola" and denies doing anything illegal, yet internal record company emails obtained by Spitzer spell out how Dave Universal would demand specific payments for specific songs. For example, after his station added songs by Franz Ferdinand, Good Charlotte and Gretchen Wilson, one Sony Music executive complains to another it cost almost $5,000 in two weeks for overnight airplay.

DAVE UNIVERSAL

I did ask for some money on Gretchen Wilson.

BRIAN ROSS

Dave Universal says the money wasn't a bribe because it came only after he made the decision.

DAVE UNIVERSAL

Now, did I go back and say, "I need, what do you got on this record?" Absolutely. I did that every single time. I would take whatever I thought I could get.

BRIAN ROSS

In your view, nothing wrong with that.

DAVE UNIVERSAL

No, because I'm re-investing it in the product.

BRIAN ROSS

But isn't that payola?

DAVE UNIVERSAL

Not at all. Because you're not, you're making these decisions after the fact.

ELIOT SPITZER

So, he's saying, "I was guilty of extortion, not bribery."

BRIAN ROSS

In any case, Dave Universal says he didn't get the money. Almost all of it went to the radio station or to Entercom's bottom line.

DAVE UNIVERSAL

It's good for Entercom. It was good for them 'cause I brought that money in. I was the guy doing the work for them. As much money as I could bring in, the better I looked.

BRIAN ROSS

The CEO of Entercom, Dave Field, declined to be interviewed by "Primetime." Spitzer says his team of investigators is now going through box-loads of subpoenaed documents from Entercom and the eight other biggest radio companies, including ABC, to see if they are involved in payola. Of the six companies that responded to "Primetime," all say they are cooperating and take the issue seriously.

ELIOT SPITZER

Based on the evidence we have seen, some of the radio conglomerates clearly are participating. And knowledge of this and orchestration of this came from the very top.

BRIAN ROSS

Spitzer's investigation has put a cloud over the music industry and its promotion practices. At last week's Grammys festivities, record company executives didn't want to talk about payola.

RECORD EXECUTIVE

I don't know anything about that. I'm sorry. Why would you say that to me on camera?

BRIAN ROSS

And the executives of Sony/BMG tried to keep their artists away from "Primetime" and finally ordered us out of the red carpet area.

SECURITY

Now, are we done for the evening?

BRIAN ROSS

Two of the companies, Sony/BMG and Warner, have settled with the Attorney General, acknowledging some employees were involved in practices that were wrong and improper. They have agreed to observe a, quote, "new, higher standard in radio promotion," unquote. Jake Slichter says payola helped make his band a huge success, but he says it's a practice that makes it impossible for music groups without the cash to cut through, and he's glad to see the Attorney General now go after it.

JAKE SLICHTER

It just seems wrong, you know. So...

BRIAN ROSS

You would say that payola blocks some pretty good music.

JAKE SLICHTER

Oh, without question.

BRIAN ROSS

If you can't come up with the cash for payola...

JAKE SLICHTER

It's not sufficient, but it's necessary. To get to the starting line. To get a little number on your shirt and get into the race.