Infinity Exec Exits Amid Pay Controversy

11/27/2004 12:03 PM, Reuters
Paul Heine

Infinity Broadcasting is not commenting on a New York Times story that claims the company fired its top Rochester, N.Y., programer for accepting gifts from record companies.

The news comes as another major radio player, Entercom, announces that it will no longer work with independent promoters.

According to the Times, an internal Infinity investigation concluded that John McRae, who oversaw rock WCMF, modern WZNE, top 40 WPXY and adult top 40 WRMM, "had accepted an unspecified sum's worth of gift certificates sent ostensibly for use in listener contests or in station promotions."

The Times cited as sources unnamed radio and record label executives who had been briefed on the matter. One of them, a major-label representative, said the label had ordered more than $1,000 worth of Best Buy gift certificates to be sent to Infinity-Rochester, "care of" McRae.

Concerns regarding McRae's activities contributed to Infinity's Nov. 17 decision to sever ties with independent promoters, the article said. Before ending relationships with such promoters, Infinity had a policy in place that banned exclusive deals with indies.

Infinity's move came on the heels of New York State Attorney General Eliot Spitzer's campaign against payola.

Less than a week after Infinity ended relations with the promoters, Entercom, radio's fourth-largest group owner, followed suit. But Entercom executive VP Jack Donlevie told Billboard that the company had very few deals with indies left and that the move is "simply the last step in what has been an evolving situation over the last several years."

Donlevie said the company's relationship with indies is "a business model that doesn't work anymore ... We're focusing more on direct relationships with the record companies, as opposed to dealing with independents."

Entercom senior VP of programing Pat Paxton added: "We have decided to work directly with the record companies, thus eliminating the need for independent promoters. As many of our stations have already made this move, it makes sense for the few stations that still work with indies to simply continue in the direction the industry has been moving for the past few years."

Several of the Entercom deals with independent promoters required providing advance notice of termination. Donlevie said the curtailments are effective at the end of the year.

(Phyllis Stark in Nashville contributed to this report.)

Reuters/Billboard