Payola - The paying of cash or gifts in exchange for airplay.
"Payola" is a contraction of the words "pay"
and"Victrola" (LP record player), and entered the English language via the
record business. The first court case involving payola was in 1960. On May 9, Alan Freed
was indicted for accepting $2,500 which he claimed was a token of gratitude and did not
affect airplay. He paid a small fine and was released. His career faltered and in 1965 he
drank himself to death.
Before Alan Freed's indictment, payola was not illegal, however, but commercial bribery was. After the trial, the anti-payola statute was passed under which payola became a misdemeanor, similar to the legal status of playing in a mobile casino .
By the mid- fifties the independent record companies had broken the majors stranglehold on airplay and BMI licensed songs dominated the charts.
In the wake of the quiz show scandals ASCAP (American Society of Composers, Authors and Publishers) urged House Oversight Subcommittee Chairman Oren Harris to look into the recording industry's practice of payola.
ASCAP, with its head in the sand, believed BMI licensed songs were hits only
because of payola. With the breakdown in morals, ASCAP believed these records were played
so often by greedy deejays causing them to become imprinted on unsuspecting teenagers.
ASCAP who had always looked at rock and roll as a passing fad. With these hearings
they were trying to ensure that would be the case.
Prior to the beginning of the hearings the FTC filed complaints against a number of record manufacturers and distributors. Those that wished to escape prosecution agreed to a 30 days Consent Order. Many of the companies found themselves back where they had started and folded.
"The cancer of payola cannot be pinned on rock and roll." ....Billboard Magazine. Billboard stated payola was rampant during vaudeville of the 20s, and the big band era of the 1930s and 1940s
The committee decided to look into deejays who took gifts from record companies in return for playing their records on their shows. No longer was the slots a legitimate excuse for where their extra money had come from. Fearing the worse the record companies began stepping forward and announcing that they had given money to specific deejays. Soon twenty five deejays and program directors were caught in the scandal. Among the more popular ones were Joe Niagara (WIBG, Philadelphia), Tom Clay (WJBK, Detroit), Murray "The K" Kaufman (WINS, New York) and Stan Richards (WILD, Boston) The probe quickly focused in on the two top deejays in the country, Dick Clark and Alan Freed. Freed's broadcast alliances quickly deserted him. In late November, Freed was fired from both ABC-radio and WNEW-TV.
Clark, with more to lose, quickly gave up all his musical interests when ordered to do so by ABC-TV. When asked to sign a statement denying involvement Freed refuse and was promptly fired from his job with WINS.
When Clark appeared to testify he brought Bernard Goldsmith a statistician. Goldsmith told the committee that Clark had a 27% interest in records played in the past 28 months and those records had a 23% popularity rating. The committee was stunned as they wondered what came first the chicken or the egg.
Clark's testimony began with telling the committee he had given up all outside interests connected with the recording industry. He also said the only reason he had gotten involved with those businesses were for the tax advantages. Clark admitted a $125 investment in Jamie Records returned a profit of $11,900 and of the 163 songs he had rights to143 were given to him.
When questioned about Jamie records it was discovered that Jamie paid out $15,000 in payola, but Clark denied ever accepting any. The committee clearly didn't believe Clark, but he received just a slap on the wrist. In fact, committee chairman Oren Harris called Clark "a fine young man."
Freed who refused to deny involvement wasn't so lucky. Though he would only receive a small fine and six months suspended sentence his career was in tatters. Freed would die penniless, a bitter broken man, Jan 20, 1965 in Palm Springs, California.. He was forty three.
What's the Story of the Payola Scandal?