FCC Probes iHeartMedia Following Accusations of Payola Law Violations

The Federal Communications Commission has warned radio station owners that it is cracking down on what it describes as “payola” practices.

In a letter sent Monday to iHeartMedia CEO Robert Pittman, FCC chairman Brendan Carr says the FCC is scrutinizing the company’s activity particularly around the live music events it hosts throughout the year. Specifically, the FCC is pressing iHeart on whether it improperly pressures artists to perform without payment at events such as the upcoming iHeartCountry Music Festival on May 3 in Austin, Texas.

“It would be particularly concerning to me if, on the heels of the FCC’s Enforcement Advisory,
iHeart is proceeding in a manner that does not comply with federal ‘payola’ requirements,” Carr writes in the letter (issued Tuesday). “Indeed, I want to know whether iHeart is effectively and secretly forcing musicians to choose between, one, receiving their usual, ordinary, and full scale compensation for performing or, two, receiving less favorable airplay on iHeart radio stations.”

Carr references the FCC’s Feb. 6-issued advisory that followed payola accusations — or “forced quid pro quo” — leveled by Sen. Marsha Blackburn (R-Tenn.), reminding radio broadcasters that manipulating airplay based on artist participation in station events without proper disclosure violates federal laws.

“This upcoming iHeart event provides the Commission with a real-world example of how such
events are put together—including artist solicitation and compensation,” Carr’s letter continues. This year’s iHeartCountry Festival is slated to feature Brooks and Dunn, Thomas Rhett, Rascal Flatts, Sam Hunt, Megan Moroney, Bailey Zimmerman and Nate Smith.

In a statement shared with Variety, iHeart representatives said they “appreciate FCC Chairman Carr’s interest in ensuring the radio industry is compliant with all applicable laws and regulations” and confirmed they would “be responding expeditiously” to the questions posed by Carr.

The FCC is requesting information — with a deadline of 10 days to comply — from iHeart regarding the artists scheduled to appear, any compensation (financial or otherwise) they’re receiving and typical performance fees for the musicians outside of the festival. The company must also disclose whether artists’ participation at the event will influence their airplay.

Additional requests from the FCC include iHeart providing a list of any musicians, artists, or acts that were invited to appear or perform at the festival but declined to do so. “To the extent you have such
information, please indicate why they declined to appear,” the letter states.

“We look forward to demonstrating to the Commission how performing at the iHeartCountry Festival – or declining to do so – has no bearing on our stations’ airplay,” iHeart’s statement continues.

Carr has also ordered an investigation into NPR and PBS over possible violations of government rules, namely by highlighting their acknowledgement of financial sponsors on the air.

Read iHeartMedia’s complete response to the FCC below:

We appreciate FCC Chairman Carr’s interest in ensuring the radio industry is compliant with all applicable laws and regulations and will be responding expeditiously to the specific questions posed in the Chairman’s letter about iHeart’s upcoming Country Festival.

The Commission’s recent Enforcement Advisory to the radio industry as a whole stated that manipulating airplay based on artist participation in station events without proper disclosure violates federal laws.

We look forward to demonstrating to the Commission how performing at the iHeartCountry Festival – or declining to do so – has no bearing on our stations’ airplay, and we do not make any overt or covert agreements about airplay with artists performing at our events.

The iHeartCountry Festival provides the same kind of promotion that that we see with artists on talk shows, late night television, the Super Bowl and in digital music performances and events: the promotional value to the artists is the event itself, and, in our case, is unrelated to our radio airplay. We’re very proud that over the years we’ve had artists ask us to be a part of the iHeartCountry Festival, and in fact we’ve had artists make repeat appearances over the years because it is an important event that enables them to reach our audiences and enhance their careers.