Payola Probes: Radio RICO A Potential Game-Changer

The phrase "Radio could be facing a RICO" refers to emerging reports and discussions about federal investigations into the U.S. radio broadcasting sector, potentially leading to charges under the Racketeer Influenced and Corrupt Organizations Act (RICO). RICO, enacted in 1970, targets organized criminal activity by allowing prosecutors to charge individuals or enterprises with a "pattern of racketeering"

If these probes escalate to full RICO indictments, they could ensnare major radio conglomerates (e.g., iHeartMedia, Cumulus), record labels (e.g., Universal Music Group, Sony BMG), and executives, fundamentally altering how songs are selected and pushed to audiences. This isn't just historical scandal revival—it's tied to modern digital-age schemes, amplified by recent high-profile lawsuits like Drake's against UMG.

Reports this month indicate federal probes—led by the FCC, DOJ, and possibly the FBI—are expanding into money laundering, racketeering, fraud, and payola at a systemic level.

Money Laundering and Fraud: Labels allegedly pay radio at "inflated rates" for airplay, then cycle the money back as "clean" profits via shell entities or overreported expenses. This qualifies as laundering under 18 U.S.C. § 1956, especially if tied to unreported cyber incidents (e.g., hacks exposing financial trails). One scheme mirrors historical payola but scales it: funds from illegal sources (e.g., drug ops in border regions) are "washed" through radio promotions.

Racketeering and Payola: Beyond simple bribes, this involves coordinated enterprises where stations and labels form "patterns" of corruption. Recent FCC probes, like the February 2025 iHeartMedia payola investigation, uncovered evidence of widespread violations. Akademiks and podcasters like Rory & Mal have detailed how this includes falsified airplay data (wire fraud) and kickbacks disguised as "marketing."

A key catalyst: Drake's May 2025 lawsuit against UMG, alleging payola for Kendrick Lamar's "Not Like Us" (which iHeartRadio settled). This forced discovery of documents, "pouring fuel on the fire" and exposing broader schemes. Drake's own lyrics (e.g., "Radio is king again, Billboard got me regulated") have fueled speculation that his legal action inadvertently triggered federal scrutiny. Industry insiders predict "fall guys" (e.g., mid-level execs) will take the blame, but majors like UMG could face civil suits or license revocations.

Who's at Risk? iHeartMedia (largest U.S. owner), Cumulus, and labels like UMG/Sony top the list. Artists (e.g., those accused of heavy payola like certain hip-hop acts) could see chart positions retroactively questioned, affecting royalties.