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Eliot Spitzer's next target...
After Wall Street, mutual funds and insurance, N.Y. Attorney General eyes record labels: report.
October 22, 2004: 6:26 AM EDT

NEW YORK (CNN/Money) - Eliot Spitzer has rattled Wall Street's cage with investigations into stock research, mutual funds and insurance sales, but the New York Attorney General isn't done: now he's turning his attention to record labels, according to a published report Friday.

Spitzer's office has served subpoenas to four major record companies, including Universal Music, Sony BMG Music, EMI Group and Warner Music, the New York Times reported.

The subpoenas are an effort to obtain information on fees the companies may have paid to middlemen that pitch songs to radio stations, according to the Times.

Independent promoters typically pay radio stations annual fees, which often top $100,000, to obtain advance copies of the stations' play lists. The promoters then bill the record labels for each new song that is played, according to the paper.

The payment to record labels is seen by some as a way to sidestep a federal law prohibiting record labels from paying radio stations to play certain music, a practice known as payola.

However, one promoter told the Times that big record labels have cut down on their use of promoters recently and that investigators "are not going to find anything; they're 20 years too late."

Warner Music, formerly owned by Time Warner (Research), the parent company of CNN/Money, was sold to investors led by Edgar Bronfman earlier this year.  Top of page

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