EMI Settles Payola Claims
The settlement spells out activities EMI agrees to not engage in (eg, "EMI shall not give, offer arrange for or provide cash, gift cards, gift certificates, or any monetary payment to a Radio employee."), although they do not admit having engaged in such activities.
Also of interest is the list of activities that EMI, and independent promoters they hire, are allowed to engage in, such as providing radio station employees with a total of 20 trips (including lodging) per station per year to see their artists perform. They can also give away up to 20 copies of a particular CD. If they want to give away more copies, they may be able to do so, but they need to seek approval in writing first.
"Modest personal gifts for life events and holidays" are also allowed, but EMI can't spend more than $150 per recipient/year, again, at least not without prior written approval. "Life events" is a useful phrase, and one I think we should all consider adding to our general vocabulary.
EMI can also continue to buy "meals and entertainment" for radio station employees, and here the agreement stipulates the amount not "exceed $150 per person provided that the event is attended by a EMI employee, has a legitimate business purpose." Is the sketchy grammar ("a EMI employee") an indication that this section was written in a hurry and the lack of a "per year" limit was an oversight? It would seem not, as there is no per year limit for a similar $150 per television station employee lunch/dinner/entertainment provision.
It looks like wining, dining, and "entertaining" people for the "legitimate business purpose" of convincing them to promote particular artists remains a reasonably safe bet. The pricey meals, like the settlement itself, are arguably largely subsidized by consumers, through, for instance, bloated CD prices. Legal and ethical are not synonymous. Paying for expensive dinners and trips in hopes of winning someone's business, with consumers ultimately footing the bill, is of course not exclusive to the music industry. The pharmaceutical industry is notorious for the practice, and hardly a shining example of a consumer-friendly business. Surely promotion need not be done via $150/person meals.
Rush - The Spirit Of Radio (available on The Spirit Of Radio: Greatest Hits 1974-1987)