By Roger Friedman, ,
Published May 19, 2015
Warner Music Group has agreed to pay a $5 million fine after an investigation by New York State Attorney General Elliott Spitzer's office found that the company has been involved in complicated payola schemes.
This comes after Spitzer's office levied a $10 million fine on Sony BMG music earlier this summer.
As in the Sony BMG scandal, Spitzer's office has released a detailed account of how Warner Music execs got their records played on the radio by paying off deejays in various ways.
The announcement by Spitzer's office details: "Direct bribes to radio programmers, including airfare, electronics, tickets to premier sporting events and concerts; Payments to radio stations to cover operational expenses; Radio contest giveaways for stations' listening audiences, including flyaways, concert tickets, iPods, gift certificates and gift cards; Hiring independent promoters to act as conduits for illegal payments to radio stations; Purchasing 'spin programs' to artificially increase the airplay of particular recordings."
In settling the investigation, Warner's has signed an Assurance of Discontinuance in which they agree not to continue these practices.
There's lots of good stuff in the Warner's agreement, particularly citing former Buffalo KSE program director Dave Universal as a willing participant in payola.
"According to Warner Music Employees, Mr. Universal always required something to add a song. An Atlantic promotion manager added, "We all did business with Dave. We all had to do business with Dave if we were going to get our records on. And it was a game that you either played or you didn't have a shot at getting your records on the air."
Several stations owned by Clear Channel were cited as being very open to payola. And Warner execs talk in the settlement about how important it is to buy "spins" of their records on Clear Channel syndicated shows hosted by Carson Daly, Ryan Seacrest and Rick Dees.
Warner's biggest acts -- from Madonna and Green Day to Linkin Park and Josh Groban -- are affected by this settlement. It didn't seem to matter whether the various gifts and giveaways involved new acts you've never heard of or established ones like REM.
What comes out of this settlement even more clearly than from the Sony BMG one, though, is the complicity of the radio stations. It's not even complicity, it's solicitation. The radio stations are clearly blackmailing the record companies, and the record companies are caving in without question.
It will be more interesting I think to see how Spitzer's office deals with a conglomerate like Clear Channel, whose stations seem to require payoffs to get records on their air.
More on this tomorrow.
I don't know what George Clooney was thinking when he got the call.
Vanessa Redgrave, who's so important and talented she should be the Dame Vanessa Redgrave by now, tells me that she was so impressed with "Good Night, and Good Luck" that she called Clooney personally to congratulate him.
"Was he shocked?" I asked her last night at a dinner at the Metropolitan Club.
The occasion was a swanky, elegant premiere for Merchant Ivory's "The White Countess," in which Redgrave stars with her sister Lynn and daughter Natasha Richardson.
I was actually seated next to the Dame Vanessa, which was quite the honor, I thought. She wore a simple black suit, her hair pushed back, and she bent forward a little over our delicious lamb chops.
She's lankier than you'd think after seeing her on film. She is also disarmingly beautiful when she smiles, which she does often.
"What did he say?" I wondered. Getting a call from Redgrave is like receiving the Pulitzer Prize.
"It doesn't matter what he said, it was that I called him," she replied. And you know, she's right. "I thought he did the most marvelous job. And I was very impressed with David Strathairn. I had no idea that it was Edward R. Murrow's program that brought down McCarthy."
Fluttering around us was Richardson. When my conversation with her mother was briefly interrupted, I said to Natasha, "You must have had quite a childhood."
She nodded, "Oh yes!"
Also at our table was director James Ivory, and there was much discussion of his departed partner, the late and beloved Ismail Merchant.
"He set this film up before he died," Ivory said, "and he worked on the next one, too. We miss him very much."
Redgrave agreed. She said she couldn't name her favorite Merchant Ivory film, in which she had not appeared.
"That wouldn't be fair," she said.
At different times, Redgrave talked to another legend, Lauren Bacall, while Uma Thurman stopped by and presented a bouquet of flowers to Ivory.
Candice Bergen and Christine Baranski were also on hand, as were Sony Pictures Classics' Michael Barker and Tom Bernard. Ralph Fiennes, celebrating his second possible male-lead Oscar role, was also on hand.
No one cared that it was pouring outside. There was too much going on inside.
Redgrave also told me that for International Human Rights Day, on Dec. 10, she's leased St. James Church in Piccadilly Circus, London, for services commemorating British soldiers and prisoners at Guantanamo Bay.
The program begins at 1 p.m., and if you're in London, you dare not miss it!
It's no surprise.
Now Dieter Wiesner, Michael Jackson's manager from the early part of this decade through his arrest for child molestation, has filed suit against the singer. The many charges of fraud Wiesner claims in his Los Angeles Superior Court action total over $60 million.
Wiesner was one of the five unindicted, unnamed co-conspirators in Jackson's trial this year. He's using the same attorney as Marc Schaffel, who's suing Jackson for much less -- just about $4 million -- in a separate case.
Wiesner, I reported in December 2003, owns or has owned legal sex clubs in Germany. He has disputed this. But the outcry over our report sent Wiesner running from Los Angeles and Jackson back to Hamburg at that time.
The result, if you recall, was that Michael's brother Jermaine Jackson moved in with the Nation of Islam and kicked Wiesner and his partner Ronald Konitzer out.
According to Wiesner's papers, he was still paid $15,000 a month through the summer of 2004. But all of his deals were canceled, and he was out in the cold.
Konitzer is not involved in this suit. My guess is he'll file his own. So far, that means Jackson is under fire from five different lawsuits, including one for $48 million from Prescient Partners.
For the Schaffel suit, Jackson was deposed in London earlier this fall. He so far refuses to return to the U.S., and you can see why.
Wiesner's complaint compares Jackson to Max Bialystock, the scheming character from "The Producers," constantly moving money around, promising to pay one party while borrowing from another.
If depositions ever proceed in this case, though, it may be Wiesner whose reputation gets churned up. He was with Jackson in a Berlin hotel room in the fall of 2002 when the singer dangled his baby son out of a window. Wiesner did nothing to stop it.
He was also with Jackson when he was arrested in November 2003, and had been with him all through the previous winter when Jackson was housing the Arvizo family at Neverland.
Jesse Hilsen, the incarcerated former manager of the rock band Kiss and infamous deadbeat dad from New York, may get a kiss of his own today in Family Court.
His lawyer is hoping that magistrate Nicholas Palos will vacate a 6-month prison sentence Hilsen has coming to him once he is sprung from federal prison.
Hilsen has served 17 months in jail after being on the lam for 10 years. He's never paid a dime of child support or alimony from a 1988 divorce, although he is said to have millions in hidden assets squirreled away.
During his fugitive years spent in South Africa, Hilsen had numerous passports and pseudonyms. His ex-wife Rita, now living in a shelter, worries that once released, he will disappear again.
As Kurt Vonnegut might say, albeit facetiously: "Crime pays!"
Palos would be well advised to read Judge Miriam Altman's decision in the Hilsen's divorce, dated April 28, 1988. Altman concluded: "Plaintiff's [Jesse Hilsen] financial permutations culminated in his filing a petition of bankruptcy. As previously stated, however, the reality is there are funds that cannot be accounted for, and plaintiff dissipated funds and deliberately encumbered assets to deprive defendant [Rita Hilsen] of the distributive award that is her due."
I could go on. Previous jurists have written long and detailed accounts of the ways in which Hilsen has ripped off his family, and Kiss, for that matter. It's a case that has gone on for 20 years. We'll see what happens this morning.
The folks at DreamWorks Animation are having a bad time, that's for sure.
Over the weekend, "Wallace & Gromit: The Curse of the Were-Rabbit," took in a measly $285,582. Since the terrific British film opened on Oct. 5, the domestic take has been only $54 million.
Internationally, "W&G" has done about twice that. But the movie has fallen short of DreamWorks' hoped-for lowest number, $170 million, and is just about dead theatrically.
The failure hurts, but it hurts even more considering what happened on Nov. 4. That's when a group of private investors called Culmen Group sold off more than a million shares of DWA stock and realized $26 million for their work.
Since about half a movie's gross goes to theater owners, you could reason that Culmen made about the same amount as "Wallace & Gromit."
The secretive Culmen people weren't stupid: When they sold, DWA was at $26.95, its high price after several weeks of low numbers. Yesterday, DWA finished at $25.74, down 22 cents from Friday.
And Culmen is secretive. All their publicly filed papers indicate a Michael R. Gleason is in charge and that Culmen is based on Fort Worth, Texas.
But there's no listing for Culmen there, and people I spoke to says it doesn't exist anymore. They also say Gleason, who was associated with MGM for a time, is living in London.
A woman who answered the phone at a Fort Worth number where Gleason used to have an office said no one liked him and that she couldn't tell me anything more.
So who gets the $26 million from the sale of DreamWorks Animation stock? A Fort Worth lawyer named F. Richard Bernasek did not return a call, but his secretary confirmed that he represents them.
According to the SEC's online service, other investors in Culmen include Carl Navarre, a New York-based publisher who hails from Chattanooga; Austin Long and Craig Nickels, from a Texas based investment group; Carey S. Fitchey, of European Capital Ventures; and Ed Borderding, a former Disney exec whose new company is called First Serve Toonz.
All of these people have something to do with another company, Neurologix, based in Fort Lee, N.J. It's unclear, however, what that is, and the doctors who run that firm did not return calls either.
As for poor "Wallace & Gromit," it's a shame the movie had such a poor reception in the United States. The boxed set of three earlier short films was a cult hit, but apparently even that had limited recognition.
Something went wrong in the bridging of that group to a new, wider audience. By yesterday, the film was only in 47 theaters. By Friday, it should be mostly gone, I'm afraid.
There are higher hopes, I'm sure, for a home-video release.
Yes, that was actress Ellen Barkin, a knockout as always, on a date with hubby Ron Perelman (he owns everything, you know) at Nobu 57 last night. They looked pretty happy to be without kids for a change.
Perelman's daughter with Claudia Cohen, Samantha, has already seen the movie "Rent" twice, they told me — and it hasn't even opened yet. Too bad she's not an Academy voter. ...
Congrats to my old pal Meryl Poster, who had a long and glorious run at the old Miramax producing hit film after hit film. I hear she's got a producing deal at NBC Universal for new films and TV shows.
No one could be happier, I'm told, than her mentor, Harvey Weinstein. His minions are everywhere in show business now, making films the way Rembrandt's students made paintings. Call it L'Ecole Weinstein!