Tuesday, March 06, 2007

Clear Channel's Speeding Ticket

News flash: The idea behind a legal fine is to penalize someone enough to discourage them from performing the same illegal act in the future. That seems to be a misunderstood concept in today's world.

In the most recent payola scandal, the four largest radio conglomerates in the nation have been ordered to pay a total of $12.5 million. That works out to $3.5 million from Clear Channel, a company with $846 million in profit and an annual revenue stream of $9.4 billion.

Proportionately, Entercom is paying much more - $4 million on an annual revenue of $400 million. Even that isn't substantial enough to discourage wrongdoing in the future--- It's one percent of their annual revenue. It's a $100 speeding ticket to a guy that makes $10,000 per year.

Citadel Broadcasting had a $114 million fourth quarter of 2006 alone--- Is their $2 million fine really going to stop them from taking pay for play again?

No more than a $25 fine stops me from speeding, I suppose.

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