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Clear Channel Cuts Promoters

Radio conglomerate severs ties with powerful middlemen

April 9, 2003 12:00 AM ET

Clear Channel Communications, which owns 1,200 radio stations in the U.S., is planning to cut ties with independent promoters hired by record labels to plug particular songs and artists. The Texas-based company claims that it has never exercised "pay for play" practices but that it is cutting out the middlemen to eliminate any appearance of impropriety.

Radio has been at the center of discussion by the Senate Committee on Commerce, Science and Transportation initiated by Senators John McCain and Russ Feingold. Feingold has sponsored a bill that would both increase governmental regulation of radio station mergers (which were loosened by the 1996 Telecommunications Act) and eliminate record label payments to radio stations for air time.

Under the current business practices, promoters charge record companies to champion particular records, artists or singles. Promoters then reportedly pay radio stations for information about programming and play lists.

Clear Channel, which maintains that listener demand rather than payments dictates it play lists, says that when its contracts with these promoters run out this summer, they will not be renewed. Clear Channel will then work directly with record labels on marketing of music.

The issue was last discussed in the Senate in January. Among those who testified was Don Henley, who urged for tighter regulations on radio ownership. "Getting on the radio, in one way or another, is the holy grail of our business," he told the committee. "In a perfect world, merit would determine which records get played on radio. But this is far from a perfect world."

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