Legal News: Can broadcasters charge for news coverage?

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From, 8-21-2014:  “Is is appropriate to charge for news coverage?”

“In Nogales, Arizona there’s an interesting dispute going on between city officials and the management at KOFH-FM (Maxima 99.1). There’s a new administration at city hall that’s unhappy with the negative news coverage from the radio station. Nogales Mayor Arturo Garino says his administration is receiving that negative coverage because he refuses to pay for it, as the previous administration had. Garino has asked the FCC to investigate the matter. General Manager Oscar Felix told The Arizona Republic that while it’s appropriate to charge for news interviews, the station’s financial arrangements with the city have no influence on news coverage and commentary. Charge for news interviews?

According to the paper, the city paid the station $24,095 for news interviews, commercials and for entertainment during a city event over a three-year period before Garino took office. $4,925 of that total was for interviews with city officials, including former Mayor Octavio Garcia-Von Borstel, who was released from prison in March after serving 2½ years on a felony corruption charge for soliciting and accepting bribes from a towing operator.

Garino told the paper that he was leaving the radio station following an interview once and the GM told him, “Next time you come to the radio station, Mayor, bring a check.” Felix denies that conversation ever took place. The paper quotes Felix saying the station covers plenty of local news at no charge. “But when it’s political campaigns, I have to charge everybody. “And, of course, when somebody needs the radio station to let the people know something, I do charge for them.” The 14-year GM says he’s disappointed only $800 has been spent by the current leadership. “It’s peanuts, you know, because any hot-dog stand, he pays more than that,” Felix said. “Any taco stand, any hot-dog stand, he pays more than $800 in three years.”

From, 8-24-2104, By John Garziglia “Charging for News Coverage?  How Would the FCC look at that?”

Charging for news coverage — dollars for stories – sounds like something that shocks the conscience.  A Nogales radio station is alleged to have charged its Nogales city government for positive news interviews about its municipal performance.  What, if any, might be an FCC violation here and does the city of Nogales have any valid FCC complaint because the radio station levied charges for paid news interviews?

This is a sponsorship identification issue.  Simply put, any radio station content for which a radio station or someone associated with the station receives compensation, whether it be for news stories, commentary, music, appearances or mentions, must be identified as sponsored.  If such paid-for content is not so identified, then there is a significant FCC rule violation. 

Such payments for content or coverage, if not revealed on the air in clear sponsorship identifications, are significant violations of the FCC’s sponsorship identification rules.

Notably, the sponsorship identification requirements of the FCC are criminal laws.  When the FCC and feds in the past have dealt with payola and plugola which are the extreme forms of sponsorship ID failures, there has been the potential for huge fines and even possible jail time for some violations.