The Great American Payola $candal Part 1 | 20
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In a fair and just universe, we would live in a meritocracy. The best and most talented would naturally rise to the top and be properly recognized and compensated for their contributions to humanity. Yeah, it's a nice idea, but, well... We'd like to think that music operates this way. The best and the brightest naturally have their songs heard, and those songs become popular because, well, they're good.

These artists have hit records and are deservedly rewarded by the world for the fruits of their God-given natural abilities. Again, lovely idea but hopelessly naive. The music business can be an ugly place. As Hunter S. Thompson allegedly once wrote, "The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs."

I should also add that the quote ends with "there's also a negative side", but I think he made his point. It is a viciously competitive game, and the truth is that sheer talent is just not enough to make it big. Every potential hit song needs a powerful distribution and marketing system behind it, someone or a bunch of people who will work the song by elbowing other artists and other songs out of the way. The goal is to get the song heard by any means necessary.

Once that is achieved, it's push, push, push to make the song ubiquitous. The more people that are exposed to it, the greater the likelihood of a record being bought or a song being streamed. And that's when the money starts rolling in. But it doesn't end there. Once a song is an actual hit, there are ancillary opportunities for revenue. Soundtracks, placement in TV shows, licensing for commercials, covers by other artists...

The amount of money that can be made is staggering, and everyone along the way gets a taste. But none of that is possible unless the song is a hit in the first place. How can that happen with a perishable commodity in an environment where the end consumer, the music fan, is so fickle and unpredictable? How do you get millions of strangers to buy into a new piece of music? The answer?

you gotta grease the wheels, create some incentives, and make offers that people just can't refuse. And this is where we enter the murky and illegal world of payola. I'm Alan Cross, and this is Uncharted, Crime and Mayhem in the Music Industry. And when it comes to payola, boy, do I have some stories for you. For three days in May 1959, the Americana Hotel in Miami Beach was filled with 2,500 radio DJs,

It was the second annual International Radio Programming and Disc Jockey Convention. This was supposed to be an opportunity for people involved with the new Top 40 Rock and Roll radio format to exchange ideas and to learn how to make their programs and radio stations better. There were speakers and panels and presentations. President Dwight Eisenhower gave a taped address. Robert King, the mayor of Miami, declared it Disc Jockey Week in the city.

And it had all been organized by Todd Storrs, who was credited by many to have invented Top 40 Radio in 1951 with a station in Omaha, Nebraska. So on the surface, the convention looked like any other industry gathering, but not quite. This was an opportunity for 19 record labels and dozens of record men to wine and dine DJs, all of whom were men, by the way.

in hopes of currying favor and influence over what records they played on their radio shows back home. They knew that DJs could make or break songs. They had to be on side if anyone hoped to have a hit record. So how did they plan to do that exactly? Well, big singers and wannabe stars were there to mingle and to be interviewed. Singer Peggy Lee even did a recording session on site, resulting in an album entitled Beauty and the Beat. ♪ Do I love you ♪

Everyone got limo rides in from the airport. Upon check-in, everyone was given $1 million in play money, which they were encouraged to gamble on games that were fixed so that they would win.

The money they won could then be used to win real merch like TVs, trips to Europe, and even a new car. The DJs were offered lots of liquor and drugs. One party went through 2,000 bottles of bourbon. Hookers were brought in, even from overseas. Promises of cash payments for future considerations were made. It was an incredibly wild party. The whole thing cost the labels about $120,000, and that's about $1.3 million in cash.

in today's money for a three-day convention. It was so wild that the Miami News ran a story on May the 31st. That was the day the convention wrapped up. The headline read, For DJs, Babes, Booze, and Bribes. Let me read you some quotes. DJs were given the greatest buttery up since Nero was persuaded he was a fiddle virtuoso. One promo man said, You can buy some of these DJs with an air conditioner, some with money, and some with a girl.

A lot of these guys think they're gods. You can hardly blame them either. We put out one record sung by a kid with no voice and no reputation. We spent $100,000 on the promotion, most of it entertaining disc jockeys, and we got it into the top 10 in four weeks. I guess that the payoffs to the disc jockeys in one form or another run to well over $1 million a year.

And finally, it's a lousy situation, but I don't see how anything can be done about it. As we tell them all the time, without the disc jockeys, we're dead. This was bad, bad publicity. And it wasn't long before the stories filtered up the chain of command to the U.S. Congress. Could it be that the radio and records industry was corrupt and not exactly above board? And that most of the evil was happening in the promotion of the devil's music, known as rock and roll? Oh, shock horror.

An election year was coming up, 1960, and politicians wanted to show that they were being tough on crime and anything that was contributing to the national panic around juvenile delinquency. Many believed that rock and roll was a fad, and now with this new scandal, it was on the run. It could be stamped out, and people would go back to listening to good music like, well, Frank Sinatra and Doris Day.

Oren Harris, the chairman of the committee convened to investigate everything, was from Arkansas. He was a serious segregationist. He saw the prosecution of Alan Freed, the famous disc jockey, and the rock radio industry as a whole as a way to get rid of all the music by black performers on the airwaves. Investigations were ordered, and in November 1959, the first ever U.S. congressional hearings were ordered into this new thing called Payola and Pay for Play.

Okay, a definition: this is the practice of bribing someone to play a record on the radio at the expense of other records whose promotion people did not pay, even though their records might be superior art. It was airplay interference. And the fact that this involved the corrupting fad of rock and roll was a bonus to populist politicians. It was discovered, again, shock horror,

That certain songs got on the radio not because of the quality of the music and the talent of the performers. No, no, no. Those records made it on the air because of cash, cars, free vacations, hookers, and blow. Back then, playing a record on the radio was the surest and fastest way to create a hit song.

The more airplay it got, the more popular it became with listeners. Many would go out and buy the record. The record would scale the charts, prompting more airplay and more purchases, and that would push the song further up the charts, and so on and so on until the public tired of the song. Charts like the Billboard Hot 100 create consensus among the public about what songs are hot and which songs are good.

And this became a reflection of what everyone else was listening to and buying. And once a consensus was established, careers and long-term record sales were built. In other words, there was an awful lot at stake in getting radio to play your records. But paying to have a record played on the radio distorted the marketplace in favor of the people who had money to make the bribes.

This was patently unfair and uncompetitive. The public's affections were being bought without its knowledge. Those Congressional House Oversight Committee hearings uncovered a lot. 335 DJs from across America admitted to receiving about $263,000 in what was euphemistically called consulting fees.

One DJ from Chicago named Phil Lind revealed he'd been paid $22,000 to play a single record. That's almost a quarter of a million dollars in today's money. The biggest moment of the hearings came when some of America's biggest DJs were called to testify. And the first was Alan Freed, the man who coined the term rock and roll for all these new songs that were coming out. Not only was he massively influential from his perch at WINS-AM and later WABC in New York City,

But some didn't like that he would play only the original black versions of the songs and not the cover versions, the safe cover versions by white performers. And this did not go over well with plenty of white folk. And religious groups saw him as a corrupting influence on the youth of America. They didn't like all this black music on the airwaves.

He was branded, and this is true, as the "demon of rock." "Sir! Top 25 rock and roll favorites, everybody! According to your mail requests, your telegrams, and your record purchases, this is all over the rock and roll record kingdom. And we're going to get off and running, warm up with rock and roll!" Freed was finally called to testify on April 25, 1960. He denied that he received bribes from record companies to play specific records,

However, this was in contradiction to what he told other people. Freed did not make a good impression. He talked and talked and talked throughout his time in the hot seat, basically spilling his guts. He thought if he was going down, then he was going to take a lot of people with him. He didn't look good either. His skin was blotchy from years of drinking, which made the scars from a serious 1951 car crash look worse.

In the end, Freed was hit with 26 counts of commercial bribery. The committee also grilled Tommy Smalls, who had a gig as Dr. Jive on another New York radio station. The accusations against him killed his radio career. The last big DJ star to be interviewed was Dick Clark. Yes, that Dick Clark. He was called to appear on April 29, 1960. He had some personal investments in things like music publishing and record companies, which were clear conflicts of interest.

And to make things even worse, he was the host of American Bandstand, a national TV show that featured acts who made these records. Plus, he also had the ambition of owning a group of radio stations one day. Here's what he said: "I have not done anything that I think I should be ashamed of or that is illegal or immoral, and I hope to eventually convince you of this. I believe in my heart that I have never taken payola."

In a long prepared statement before the committee, Clark painted himself as a victim in this whole mess. He was articulate, respectful, and well-dressed, and all that worked in his favor. Clark and Freed faced two completely different outcomes. Freed was fired by WABC when he wouldn't sign a statement saying that he never took any bribes to play a record. And like I said, he was eventually charged with multiple counts of commercial bribery and fined $300 plus given a suspended sentence.

He also lost a claim to songwriting credits he demanded in exchange for playing certain records such as this one, Maybelline, by Chuck Berry. Then came an indictment for tax evasion, again related to those bribes, which of course he did not report as income.

Some believe that Freed could have beaten the rap if he had been a better witness. Instead, like I said, he was belligerent under questioning, something that did not work in his favor and led to his indictments.

This made Freed a pariah in the broadcasting world. He'd made himself the face of payola and all the dishonest practices in the radio broadcasting industry. And for the rest of his life, he bounced around small stations in California and Florida, even resorting to working on an FM station, which at the time was like being assigned to the pits of hell.

Freed began to drink even more heavily. He died broke and mostly forgotten on January 20, 1965. His death was caused by complications brought on by so much alcohol. He owed the IRS $38,000, which is the equivalent to nearly $400,000 today. His ashes bounced around from New York State to the Rock and Roll Hall of Fame to a cemetery in Cleveland.

Tommy Smalls fared a little bit better. He bounced back as a promotions manager for Polydor Records and later went on to co-found the National Association of TV and Radio Announcers. Meanwhile, Dick Clark skated entirely. He saw what was coming, so he sold off his shares and interests in seven indie labels, six music publishing companies, three record distributors, two talent agencies, a record pressing plant, and a

33 companies in all before the government started asking questions and, as a result, escaped from the investigation unscathed. But despite his protestations of innocence, the committee was originally very skeptical. A few indiscretions were uncovered. A fur stole, a necklace, and a ring for his wife worth a total of about $4,400. And for some reason, a blender that cost $23.00.

There was also talk of how he received kickbacks as part of his role as host of American Bandstand. But in the end, all Clark got was a slap on the wrist. In fact, on the way out, he was called a very fine young man by the chairman of the committee. Dick Clark went on to become one of the most famous and beloved U.S. media personalities until his death in 2012. And when he died, he had a net worth of somewhere beyond $150 million.

When all those hearings wrapped up in early 1960, it officially became illegal for anyone to pay a radio station or a DJ without disclosing that they were being paid to do so. The term payola was now a household word, and there were even songs written about it. Comedian Stan Freeberg released this on Capitol Records.

and it came out just as the hearings were wrapping up. You really think you can get any disc jockeys to play my songs? It's getting tougher, but I'm on my way to see one right now. Oh, boy. Right after I stop off at the bank. Huh, the old paler old blues, huh? What kind of crack is that? That's an insult to my integrity. ♪

Your name is what? Barney Schlock. I got this little record company. Uh-huh. Obscurity Records? It would be, yeah. Look, I know the probe is on, but I got a record here that's got to happen. High School Ooh-Ooh by Clyde Ankle. How's about it, baby? You want to jump on it? Crazy. Lay it on the floor. Much. All right, you'll see. The kids will eat it up. They think that's good singing.

Is it? Oh, not really, baby, but don't tell the kids I said so, huh? Us little rock and roll labels got a good thing going. We pay off a few guys in the key cities here, rig a few charts there, bingo, a new hit parade. And that's how rock and roll was born. Yeah, I'm hip. Look, kid, if you don't want bread, what do you need? A little dental work? Trip to Vegas? Forget it. Pre-1959 cranberries?

You're all heart, Barney. Heart? That thing right behind your shoulder holster. Huh? Oh, oh, yeah. So, uh, you don't want to give high school a ride then, huh? Only on a rail. Oh, listen, kid. Paola's the only way a little record artist can get off the ground. Yeah? Did you ever hear of talent? No. Who does he record for? This wouldn't be the first time that American radio and records industries were called out and punished for doing bad and illegal things.

But before we can really begin to understand everything, we need to dig deeper into the history of payola before we get the big picture. And we'll start doing that in just a second. We kind of began our story of payola in the American radio industry right in the middle with all the scandals that erupted after the 1959 DJ convention in Miami. But if we're going to understand this issue and how it came to be, we need to back up a bit.

After World War I, radio broadcasting technology was declassified by the military and made available to the public. By the mid-1920s, plenty of American radio stations were playing records as part of their broadcast day. And no one really paid too much attention to how certain records made it on the air in the first place. Oh, sure, there were some vague, non-supportable metrics.

You know, letters sent to stations requesting certain songs. They would look at sheet music sales, reports of what was being played on jukeboxes, anecdotes of what songs were popular in clubs and dance halls. But the truth is that payola began when commercial music radio was born. And who was keeping track of these payments? Well, no one.

Oh, sure, some people knew what was going on, but why mess up a good thing? Performers who benefited weren't going to complain. Music publishers had nothing to say on the matter. And pay-for-play music was a source of revenue for radio stations. And if no one was watching how the sausage was made, well, let's just not make a big deal of it. But in the 1940s, there was trouble. Jukeboxes had become a huge source of revenue, one nickel at a time.

Getting a record distributed into the tens of thousands of these machines became extremely important, and a lot of jukeboxes were controlled by the mob. You want plays with my machine? Then you gotta pay. For many, the jukebox business was evil and corrupt. But because 75% of all records produced in the US went into jukeboxes, record labels really had no choice but to pay.

In the 1930s and 40s, there was payola during the big band era. It wasn't uncommon for a song plugger to hand a band leader an envelope of cash in exchange for the band playing that plugger's songs. There was more payola in the radio game too, but it really didn't kick into high gear until the 1950s, when top 40 rock and roll radio began to spread across the U.S.

The labels realized that this new construct called a teenager had a fair amount of disposable income and would run out to buy the hottest new records that they heard on their local station. But what were those records? Who determined what songs got on the air? Initially, in the early days of Top 40 Rock and Roll, DJs selected what they played. Maybe their show was sponsored by a local furniture store that had a display of records in one corner.

Whatever the store had made the playlist. Records were mailed to radio stations. And in larger markets, representatives from record labels walked the records right through the front door, sometimes during working hours, but also when the office was closed. And these visitors brought gifts in addition to their records. Most of these visits were secretive, clandestine. But if anybody knew about it, they turned a blind eye. Well, at least at first, because it didn't seem to be a big deal.

But things started to change, thanks to a new thing called television. Through the 1930s and 40s, local radio stations received a lot of network programming out of New York from NBC, CBS, Mutual, and a few other networks. But in the 1950s, it was obvious that TV was going to be the next big thing. And that's where a lot of the real money was. So, network resources were allocated away from radio over to television.

A lot of radio network shows were canceled, leaving local stations with hours of airtime to fill, especially in the evening and on weekends. And the easiest way to fill this time, and the cheapest way, was to hire a guy to play records. Back then, a typical mid-level DJ might make $50 a week. And all the advertising on a DJ shift went straight to the local station's bottom line. DJs playing records was cost-effective.

It just so happened that this economic shift in radio coincided with several things. The birth of rock and roll, the rise of the teenager as an economic and social force, and the introduction of the transistor radio, which for the first time allowed listening to music to be 100% portable. You put all that together and you have teenagers listening to this new music, this rock and roll, away from the prying ears of their parents. Suddenly, there was a boom in DJ-based shows.

In 1951, there were maybe 250 DJs on the radio all across North America. But by 1957, that number was 5,000. And each one of them had influence over their audiences in their own way. Some became promoters, got a piece of the gross ticket sales for local concerts. Others started their own record labels, occasionally demanding a piece of the songwriting copyright as part of any deal.

DJs became so powerful when it came to the public's musical taste and consumption that Time magazine described the rock and roll radio DJ this way, pooh-bahs of musical fashion and pillars of U.S. low and middle-brow culture. Yeah, thanks a lot. Record labels wanted a piece of that influence and power. But with so many new records competing for a limited amount of airtime at so many radio stations across the country, what could be done?

Well, like I said, most DJs didn't make a lot of money. So maybe they could be convinced to add a record or two to their shows with a little cash. Or booze. Or drugs. Or trips. And as it turns out, yes. Yes, they could. Some DJs had a flat rate. You want me to play your record? Well, it'll cost you this much. If a DJ initially refused to play a record for whatever reason, then the pot was sweetened until there was just too much money on the table to say no.

In the end, if you were part of that cohort of DJs, the 1950s were, as one put it, a blur of booze, broads, and bribes. That this was happening became an open secret. But here's the thing. Payola was not illegal at the time. It had been an accepted way of doing business for years, decades. It was how you got your records played. Now, though, some felt it was getting out of control.

Industry publications like Billboard and Variety did stories on the growing problem of payola, showing that it was more than just rock and roll records. The old guard of music publishers became more vocal, largely because they didn't have any rock clients. The music publishers that had embraced this new music kept silent because their rock and roll clients were benefiting from payola. And some record labels were shouting from the rooftops, especially those who did not like rock and roll.

Back in those days, the three major labels were RCA Victor, Decca, and Columbia, and all three were slow to jump on the rock and roll bandwagon. They were spooked by a new breed of indie label like Roulette in New York, Chess in Chicago, and King Records in Cincinnati, companies that were starting to eat their lunch with this new music. The old guard pointed to rock as a cancer, with payola at its root.

Dealing with payola would kill two birds with one stone. It would tip the music market back in favor of non-rock music, preventing them from being driven out of business by this new generation. And going after payola would wipe out rock music in the process. They, and some politicians, felt that if they could get to the DJs through payola, rock and roll would die out and the world would go back to listening to proper good music like Frank Sinatra.

There was a mob element to this too. Organized crime, which started in the music business back in the 1920s and then extended its reach through the control of jukeboxes, also had its mitts on the record business. One of the most mobbed up of them all was Morris Levy, the head of Roulette Records in New York. He was close with the Genovese crime family, one of the five families of New York, and Levy had a close relationship with Alan Freed.

Levy stiffed performers out of royalties, he strong-armed record stores, and he paid bribes to have his records played. Even though Morris Levy was on the radar of law enforcement, no one ever prosecuted him. He wasn't even called before the oversight committee after that DJ convention in 1959. There was another crisis too. Although it had nothing to do with music and radio, it did shake the trust of the public.

1959 was the year of the TV quiz show scandal. It was shown, largely through a case involving the program 21, that things were fixed in favor of certain contestants. And there was a big government investigation into that. In 1959, there was another investigation into something called "plugola," a practice where someone endorsed, for money, a product or service that they didn't actually use. This was deceptive and false advertising, which needed to be stopped.

Which brings us to the DJ convention of 1959 and the government hearings that followed. After the hysteria of Joseph McCarthy's Red Scare, the Quiz Show scandal, and the investigations into false advertising, the American feds were on a mission to stamp out all the corruption and lies that were eating away at the confidence of the American public. If game shows were rigged, if advertising was a lie, and if all the music on the radio was bought and paid for, something needed to be done.

And throughout the summer and fall of 1959, pressure built on radio stations to do something about their DJs' errant ways. Otherwise, they might lose their valuable broadcasting licenses. Even before the hearings began, DJs got fired because their payola practices put the stations at risk. After the hearings, a lot more got fired. Some, like Hal Jackson, the most popular black DJ in New York, were fired completely unjustly.

Alan Freed, like we saw, was the main sacrificial lamb, largely because of a law against commercial bribery in New York State. That's what brought him down. Meanwhile, more and more radio stations stripped their DJs of the ability to choose their own records. Nothing made it to air without the permission of management. That meant program directors and music directors gained all the power. Remember that, because we'll come back to it.

In 1960, under the table payments to radio stations and DJs was declared illegal. Those who broke the law could be fined up to $10,000 and given a year in jail. So it was all settled, right? Payola was uncovered, investigated, and made illegal. People were held accountable, fined, and driven out of the business. So story over. Well, not exactly. A loophole was left open, and it was big enough to drive a truck full of money through.

After the payola scandal in 1959 and 1960, paying for radio airplay was declared illegal. But it didn't stop it from happening. Throughout the 1960s, payola went underground. Off-the-books, under-the-table payments were still made in exchange for airplay, but very, very quietly. In fact, things got a little easier.

Record promoters no longer had to grease up individual DJs one by one, station by station. Now that a single program director or a single music director had the power to add a song to a station's playlist, that just simplified things. One point of contact for the bride. It just had to keep things quiet. And things were quiet until 1974. That's when a new round of allegations surfaced.

On August 11th, 1974, CBS News ran an hour-long report entitled The Trouble with Rock. It outlined the new payola with stories of cash payments and drugs. Good evening. Like it or not, the dominant music in America today is rock music. Rock, the music that infuriated so many people in the 50s and 60s. The music that so many thought too loud, vulgar, and somehow dangerous to our morals.

Rock has not only refused to go away, it has become an institution. Not just in America, but in much of the world. Rock developed along with a whole way of life, the lifestyle of affluent American youth. The music came to mean new attitudes toward politics, sex, and drugs.

And rock was mostly responsible for the development of an enormous music industry that tripled its record sales in just about 10 years. But in the process of achieving that spectacular financial growth, the rock music industry developed symptoms of serious ailments. There is now a nationwide grand jury investigation into charges of payola, infiltration by organized crime, and drug use in the record and radio industries.

Tonight, we'll take a look at the rock music industry and try to see what happened. Now, this was a little awkward for upper management in New York because CBS also owned radio stations and a big record label. You can probably imagine some of the meetings that happened in the conference rooms of CBS corporate headquarters on 6th Avenue in New York.

But it's not like the executives didn't know something was happening. A year earlier, in July 1973, Clive Davis, the president of CBS Records, was fired after being accused of misuse of company funds. That documentary on CBS News was pretty hot. It contradicted details by CBS Records and CBS Corporate.

The news division declared it had found indications of continuing payola, infiltrated by organized crime, and an unhealthy environment with drugs, among major labels, including CBS. But for whatever reason, the report didn't name names. But it wasn't long before another round of government investigations began. Again, this is in the wake of Watergate. So something had to be done to restore the public's trust. And Morehead's ruled.

Walter Cronkite reported on the situation on the evening news. All record companies and 19 individuals were indicted today on charges stemming from alleged payola in the industry. The indictments were handed up in New York, Philadelphia, Los Angeles, and Newark. David Culhane has a report from Newark. The impetus of this investigation is towards the large recording companies...

that have benefited greatly by the popularity of various segments of popular music in the last decade. This investigation is directed at those that violate the law. Federal prosecutors from four cities jointly released details of the indictments today after almost two years of a national investigation in conjunction with the Internal Revenue Service, the Federal Communications Commission, and the FBI.

Jonathan Goldstein, the federal attorney in Newark who coordinated the inquiry, said that 19 individuals and six corporations were charged with criminal offenses including income tax evasion, perjury, mail fraud, interstate transportation of stolen property, interstate travel to commit bribery, and the making of illegal payments to radio station personnel. That is, payola to get records played.

Three record company presidents were indicted, including Clive Davis, former president of CBS Records. Davis was charged with filing false income tax returns over a three-year period. David Winshaw, another former top executive at CBS Records, was charged along with Pat Falcone, an alleged mafia figure, with defrauding CBS of more than $75,000 by setting up phony companies to be paid by CBS.

Record industry officials said today they did not feel that the indictments reflected typical behavior in the business. They said the majority of their personnel were honest. All of the federal attorneys handling today's indictments emphasized that the investigation of the music recording industry is continuing. And the clear implication is that more indictments can be expected.

One of those 19 people indicted was Clive Davis of CBS Records. Another was an executive at Brunswick Records for allegedly taking almost $350,000 in kickbacks from record stores, money that was then used to pay off radio stations. There was another grand jury indictment against Frankie Crocker, the program director at WBLS, a major New York radio station with a big black audience.

He was questioned about a record promoter working for Capitol Records who went by the name Rocky G. He was also grilled about taking money from a Philadelphia label in exchange for airplay. Investigators of what became known as Project Sound wanted to know how Crocker managed to have a swanky Manhattan apartment and a Rolls Royce on his modest radio salary.

In the end, Crocker was charged with perjury and convicted on a tax charge for which he was fined $5,000. And although the scandal forced him out of New York radio, Crocker later came to the city to work for MTV. What about everybody else? Well, not much happened, really. The indicted people were fined, got fired, and found other work. No one went to jail. Those on the outside were stunned. If everybody was so guilty, why had Project Sound been such a flop?

The answer is the government was absolutely inept in proving its case and connecting all the dots between individuals, record labels, radio airplay payments, and the mob. They blew it and the payola people knew it. If the government is this dumb and the result is a few thousand dollars in fines, fantastic! The fines will just be figured into the cost of doing business. So let's get back to work. And they did. Plus there were some old loopholes that still existed in the anti-payola laws.

First, it was only illegal if the payments were undisclosed. This meant that a station could still accept money to play a song as long as they advertised that fact. There were all kinds of clever ways to present that on the air. It might have sounded clunky, but it wasn't illegal, and it brought in money. Then, in 1979, the U.S. Federal Communications Commission opened the loophole even wider when it ruled that social exchanges between friends is not payola.

What does that mean? I'll tell you what, that ultra-vague language made any anti-Paola statutes completely unenforceable. The biggest loophole had to do with who began making the bribes and deals. Record labels were scared off by congressional hearings and grand jury indictments, so they sort of got out of the bribery business, at least directly. Instead, we entered the era of the independent record promoter.

These were third-party contractors hired by the labels to push their records to a roster of radio stations. The indie promoters were given a sum of money to put behind a given artist. Get playlist ads, they were told. And spare us the details. We don't want to know. Just do what you have to do. Nudge, nudge, wink, wink. And these guys did what they had to do. The result was an even bigger payola scandal in the 1980s.

And this is what we'll investigate on part two of the Great American Paola Scandal. You can catch up on all episodes of Uncharted by downloading them from your favorite podcast platform. Please rate and review if you get a chance. If you have any questions or comments, shoot me an email, alan at alancross.ca. We can also meet up on all the social media sites along with my website, ajournalofmusicalthings.com. That's updated with music news and recommendations every day. And there's the free daily newsletter that you should get.

And please check out my other podcast, The Ongoing History of New Music. There are hundreds and hundreds of episodes that you can enjoy all for free. Join me next time for part two of the great American payola scandal. Tactical Productions by Rob Johnston. I'm Alan Cross.