This week, the FCC’s Enforcement Bureau entered into a Consent Decree with iHeartMedia to resolve its investigation into whether iHeart violated the FCC’s sponsorship identification rules. Interestingly, iHeart does not admit that it violated any rules, nor does the FCC suggest any specific conduct by iHeart violated any rule. So why the Consent Decree? The Decree say that it resolves an investigation into whether iHeart “violated the Commission’s sponsorship identification rules in connection with allegations that iHeart provided artists additional airplay on the Company’s radio stations in exchange for the artists’ performances at Company events, without the disclosure required under the Commission’s sponsorship identification laws.” What is the disclosure that is required, and when is it required? Again, the Decree does not make clear what identification would be required, nor does it say exactly what circumstances would trigger the requirement for a sponsorship identification. So we have to look at the terms of the Decree itself to see if we can piece together exactly what is prohibited and when on-air sponsorship identifications are required. What we ultimately find is that the Decree really conveys a message that applies to broadcasters in many situations – when the station gets free or discounted “stuff” (whether it be a band’s appearance at a station event or free meals at a local restaurant) in exchange for something that is broadcast over the air, the audience needs to know that the airplay was sponsored.
The first place to look in trying to draw some specific guidance from this Decree is at its history. The Decree stems from an Enforcement Advisory released by the Enforcement Bureau in February 2025, after Senator Blackburn from Tennessee alleged that bands had complained to her about some station practices in strongarming them into playing at station events for free or at reduced pay. The 2025 Advisory warned that any “deals” for bands to play at station events in exchange for more airplay, or any threats (express or implied) to reduce airplay if a band did not appear at an event, would be seen as a violation of the payola and sponsorship identification rules. The Bureau referred to such threats as “covert manipulation of radio airplay.” The Advisory states “[w]hen payola causes stations to broadcast programming based on their financial interests at the expense of community responsiveness, the practice is inconsistent with localism.” We wrote more about the Advisory when it was released, and included a broader discussion of the payola rules.
In practical terms, it appears that the Enforcement Bureau is saying, both in this week’s Decree and last year’s Advisory, that by playing at an iHeart event for no fee or at a reduced cost, a band is giving iHeart “consideration” (i.e., something of value) in exchange for greater airplay. If there is in fact an agreement that the band is playing for reduced cost in exchange for more airplay, then the band is in effect paying for the airtime, and that payment should be revealed when the band’s music is played on the air.
This week’s decree does not cite any instance where iHeart increased airplay in exchange for a band playing at one of its events – in fact the Decree specifically says that iHeart denied doing so. The Decree only mentions in passing the allegation that started the investigation – that iHeart threatened to decrease airplay of bands that did not agree to play for free at its events. Again, such threats were denied by iHeart.
The Decree says that iHeart already had in place measures to combat payola at its stations, but it was “willing to augment its practices to reinforce the effectiveness of the Company’s efforts.” Thus, it agreed to an enhanced compliance program that requires a compliance officer, a hotline for tips on improper conduct, protections for “whistleblowers,” and 36 months of reporting to the FCC about the bands that it is getting to play at its events, the costs, and the airplay those bands are getting. It also requires that iHeart put into its public inspection file the names of all artists that will be playing at certain iHeart events, “a statement that the artist may experience a natural increase in airplay of the artist’s music during and coincident with the artist’s performance at the event,” and a disclosure that if the increase in airplay occurs as the result of an agreement with the band, then appropriate sponsorship identifications will be made on the air.
From these reporting obligations, it appears that the Commission is acknowledging that an artist, by appearing at an iHeart show, may get increased airplay just because iHeart wants to promote its show. It appears from the statement quoted above, that such natural increases in airplay to promote the show are to be expected, and don’t trigger additional reporting obligations or additional on-air sponsorship identification obligations. What does trigger those obligations is when the band, as part of its agreement to play at the show, requires additional airplay. That quid pro quo – the exchange of promises of concert performance for increased airplay – is what triggers a sponsorship identification requirement to tell the on-air audience that the band has paid for the playing of its record by agreeing to play at the concert. The on-air disclosure probably needs to say something as simple as, “This song sponsored by [NAME OF BAND]” just before the band’s song plays.
Such contractual promises to increase airplay are likely rare. And, if they exist, the protection afforded by this Decree is one for the radio listener who will be informed when songs are being played for consideration rather than based on their artistic merit. Chairman Carr issued a statement applauding this action and the protections that it affords to artists, especially “up and coming ones,” in their dealings with the broadcast industry. Presumably, he is referring to the initial allegations in Senator Blackburn’s letter of stations threatening to cut off airplay for artists who do not play for free or at a reduced rate – though that does not appear to have happened in this case.
So, what do broadcasters take away from the actions this week? Actually, the lessons go beyond music. If a station uses their airplay as a currency to get free or discounted products or services of any kind, the station needs to make clear that the entity that is providing those products at less than a market price is sponsoring the on-air mentions that were required as part of the deal. Broadcasters do this all the time with advertising that is “barter” or “trade,” where a merchant provides a product or service (e.g., gas, food, station furnishings) to a station in exchange for unpaid advertising. But in those cases, the sponsorship ID is usually assumed as the merchant gets ads that sound like ads – and ads for commercial products and services don’t need additional sponsorship identification as it is assumed that the identification of the product in the ad is sufficient for the listener to know who is trying to persuade them to buy. But, where the fact that an on-air mention is not an ad is not clear, sponsorship identification needs to be provided (see, for instance, FCC cases we wrote about here, here, and here). For bands or other entertainers who want airplay to promote themselves, the FCC actions leading to this Consent Decree make clear that a station can’t threaten to withhold the airplay that these artists might otherwise get unless they provide discounted services to the station. While these exchanges with entertainers are not everyday events in broadcasting, they do come up from time to time, so the broadcaster needs to know when to exhibit caution.