FCC Investigates iHeartMedia Over Potential Payola Violations

RADIO ONLINE | Tuesday, February 25, 2025

Federal Communications Commission

The FCC has issued a formal inquiry into iHeartMedia regarding potential payola violations tied to the upcoming iHeartCountry Festival 2025, scheduled for May 3 in Austin, TX. The agency's Enforcement Bureau is investigating concerns that musicians may be compelled to perform at the festival for little or no compensation in exchange for more favorable radio airplay.

In a letter addressed to iHeartMedia Chairman and CEO Robert Pittman, FCC Chairman Brendan Carr underscored the importance of compliance with federal sponsorship identification requirements and payola laws. The letter follows an FCC Enforcement Advisory issued earlier this month, which warned against radio broadcasters engaging in undisclosed arrangements that link artist performances at promotional events to increased airplay.

The FCC's letter raises several key concerns, including whether iHeartMedia is pressuring artists to choose between receiving their standard performance fees or risking diminished radio exposure. Carr specifically requested detailed information regarding artist compensation, the usual industry rates for similar performances, and whether radio airplay decisions are influenced by participation in the festival.

Additionally, the FCC is seeking insight into iHeartMedia's internal policies on payola, its compliance training efforts, and whether it has communicated the Enforcement Advisory to its stations and personnel. The company has been given 10 days to provide responses to a series of detailed questions.

Payola refers to the undisclosed practice of providing compensation or other incentives in exchange for favorable radio airplay. Such schemes violate both the United States Criminal Code and the Communications Act of 1934, which require broadcasters to disclose any financial arrangements affecting programming content. The FCC's Enforcement Advisory reiterated that failure to report such arrangements can result in severe penalties, including fines and imprisonment.

According to the advisory, broadcasters must exercise "reasonable diligence" in ensuring compliance, particularly those with music-driven formats that report to industry charting services. Stations that fail to meet these legal obligations may face regulatory sanctions, including monetary forfeitures.

The investigation underscores the broader conversation about fairness in the music industry and the influence of major broadcasters on artist exposure.