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Category: Legal
Trust Me, You Can’t Trust Anyone
By Steven J.J. Weisman
TALKERS MAGAZINE
Legal Editor
BOSTON –– Trust me, you can’t trust anyone. This lesson was recently learned again by Iranian-American investors who fell prey to yet another Ponzi scheme, a scheme as timely and fresh today as it was more than 90 years ago when Charles Ponzi first popularized the scam that has taken his name.
Simply stated, a Ponzi scheme involves a scam in which early “investors” are paid, not through the profits of the purported investment, but rather through the money poured into the apparently successful investment by new investors or as they should be more correctly referred to, “victims.” The scam is simple, it is popular and despite the convictions of many Ponzi scheme criminals from Charles Ponzi himself up to Bernie Madoff and beyond, the scheme continues to proliferate because the investing public continues to fail to see the telltale signs.
A Ponzi scheme has again become news with the indictment of former Los Angeles radio talk host John Farahi, who has been charged with scamming investors out of at least $20 million through a scam in which the investors were told that they were investing in low-risk, FDIC-insured certificates of deposit, government bonds or corporate bonds issued by companies that were, in turn, backed by federal government TARP (Troubled Asset Relief Program) funds. The truth, according to federal prosecutors, is that Farahi used the money to support his own lavish lifestyle including the construction of a multi-million dollar Beverly Hills mansion as well as to invest in undisclosed extremely risky future options that caused him to lose his very expensive and well-tailored shirt.
A New Game: Thoughts in a Special Edition
By Matthew B. Harrison
Editor’s Note: Mr. Harrison’s column first appeared in and references the final print edition of TALKERS magazine.
SPRINGFIELD, Mass. –– Writing this month’s article has been bittersweet for me. I am sad in a sentimental sense to see the tradition of having this monthly print publication come to an end. Radio and its coverage by TALKERS magazine, have been major components of my life, as my father is its founder and publisher. I was nine years old when the first issue ran off the press. However, my sadness is limited ONLY to the realm of nostalgia. I am very excited and optimistic about the present and future for TALKERS magazine at its instantly accessible location, Talkers.com.
I am equally excited about the changes happening in talk radio (and radio in general). As an arts and media attorney who provides talent management services, it doesn’t get more exciting than being involved in a communications medium that has historically evolved from a big piece of furniture around which the family huddled in the living room to listen to a handful of stations into a ubiquitous resource of countless outlets with users no longer limited to a particular device, location or time in order to experience it.
I am often asked how I feel about managing radio talent in a troubled economy and a changing media paradigm. My response is there has never been a more exciting time than the present to be involved in non-traditional contract negotiations detailing mixed ownership and shared revenue of intellectual property. Of course, these types of deals currently termed non-traditional will become the norm.
The idea of using created “radio-style” content on media other than terrestrial radio is relatively new. It has brought changes to how deals are made. Understanding how to maintain ownership and/or control over the broader scope of uses for intellectual property is going to be a cornerstone of employment, joint venture, partnership and strategic alliance pacts within this new landscape.
I encourage everyone in the industry to embrace these changes. The change from “AM/FM radio” to “radio-media” holds some scary implications for most people in the business –– namely license holders and their employees –– but very exciting things await those who continue to move forward. The best job security is to deliver the best possible programming content for the audience –– regardless of whether you are broadcasting on terrestrial radio, cable television, satellite or internet.
Matthew B. Harrison, an entertainment and media attorney, is a senior partner with Harrison Strategies, LLC based in Springfield, Massachusetts. He can be phoned at 413-565-5413 or e-mailed at matthew@matthewharrison.com.
Indecency at the Supreme Court
By Steven J.J. Weisman
TALKERS MAGAZINE
Legal Editor
Yesterday, the Supreme Court once again dealt with the issue of indecency on the broadcast airwaves in the oral arguments of the long pending case of FCC v. Fox Television Stations.
Although the case dealt specifically with broadcasts of the Golden Globe Awards in 2002 and 2003 in which Cher uttered the word “fuck” in 2002 followed a year later by a reference by Nicole Ritchie to “shit” as well as an episode of “NYPD Blue” in which a naked buttocks was shown, the case has its origin more than 30 years earlier in the 1978 Supreme Court case of FCC v. Pacifica. That case dealt with George Carlin’s famous “Seven Dirty Words” comedy routine which was played on an afternoon radio show in New York. These words put the court in a difficult position because though, in and of themselves, the words did not qualify as obscenity and therefore did receive protection under the First Amendment, the Supreme Court did take the position that the airing of those words on broadcast radio and television, the only forms of radio and television at the time, was inappropriate for children. The FCC came up with a new classification of inappropriate language, namely indecency and the Supreme Court embraced, albeit in a decent manner, this new classification of speech. Recognizing that adults have a right to hear indecent speech while trying to prevent children from being exposed to such language, a safe harbor for the broadcast of indecent speech was developed, namely between the hours of 10:00 pm and 6:00 am during which time indecent speech could be broadcast because it was assumed children would not be watching or listening to broadcast television and radio during those times.
The evolving shift in the employer/talent business model
By Matthew B. Harrison
SPRINGFIELD, Mass. –– We are in the early stages of a significant shift in the way radio station owners/operators will be managing and paying for content creation. It is becoming increasingly important for radio talent to take stock of their current business relationship with their employers and consider these changes when mapping out future plans.
The shift coming to radio will be similar to what happened in the motion picture industry when the “studio system” in which actors were employed staff members of film factories such as MGM evolved into a model in which they became independent players contracted by production companies on a per-project basis.
The root of this change grows out of the separation of the “radio station” into two very different businesses which, for many decades, were considered one and the same –– radio station as a licensed property and radio station as a production company. The growth of the role played by the internet in the distribution of terrestrial radio station programming is exposing and speeding up the distinction between these two concepts.
New twist on the mystery shopper scam
By Steven J.J. Weisman
BOSTON –– The biggest mystery in the mystery shopper scam may be that after being around for so many years, victims are still falling for this scam.
But now radio stations are getting involved in the scam due to their own lack of due diligence by accepting advertising for the scam artists perpetrating this scam on the public and, in so doing, are at best creating horrible relations with their listeners and, at worst, opening themselves up to potential liability including possibly jeopardizing their broadcast licenses.
The mystery shopper scam operates by luring victims in with the promise of an employment opportunity in which the mystery shopper receives a certified bank check to deposit into his or her own checking account. The mystery shopper then is to use some of the money to make purchases at the assigned stores. He or she then prepares a report on the shopping experience at the particular stores to send back to the company that hired him or her. The mystery shopper keeps the goods purchased, takes a fee out of the funds derived from the deposited bank check and wires back the difference to the mystery shopping company.
A Sirius settlement
By Steven J.J. Weisman
BOSTON –– The history of satellite radio has been filled with legal entanglements. After a long process, Sirius and XM –– the original satellite radio companies –– were permitted, with the approval of the Department of Justice’s Anti-Trust division and later the FCC, to merge and become Sirius XM as it is known today. A prime reason for permitting the merger was the determination by the Justice Department that consumers would not be likely to be harmed. The Justice Department did not believe that prices would rise dramatically following a merger because of the competition from iPods and other mp3 players as well as other developing sources for media. A condition of the merger which was approved in 2008 was a three-year price cap for Sirius XM subscribers –– although certain costs were permitted to be passed through to customers.
In 2009, Sirius XM subscriber Carl Blessing brought a class action against Sirius XM on antitrust and consumer protection grounds, alleging that the company improperly raised some prices and also assessed a music royalty fee following the merger. The increases included a $2.99 monthly charge for internet access and a music charge of $1.98 per month which was assessed following an agreement about new royalty rates with record companies.
Blessing’s case was never a particularly strong one and even the judge in the case at a settlement hearing commented that proving antitrust violations would have been difficult.
The era of intellectual property law
By Matthew B. Harrison
SPRINGFIELD, Mass. –– In a recent article, Michael Harrison predicted that Intellectual Property Law would dominate talk radio’s legal concerns in the era that is unfolding. (It is filed at www.talkers.com under Michael Harrison and is titled “The Ticking of the Clock.”)
As talk programming evolves into new means of digital distribution through advances in technology, so does our need to understand intellectual property. While evolutionary, the nature of the rights themselves –– to control and exploit the products of one’s creativity and innovation –– remains consistent, the manner by which they are expressed and exchanged is constantly attempting to adapt to advances in technology.
The invention of, in turn, the printing press, the phonograph, radio and television broadcasting, cable, transmission from satellite, VCRs, CDs, DVDs, and now the internet has affected both the form and the substance in the interpretation of intellectual property rights.
The idea/expression dichotomy
By Matthew B. Harrison
SPRINGFIELD, Mass. –– Good talk radio hosts draw upon multiple sources for material. News, media, pop culture and their own lives and interests are standard sources for talking points. In today’s digital world two pressing legal questions should be on your mind:
1) How difficult is it to infringe upon someone’s copyright when borrowing a concept, the goodwill, or even actual pieces from someone else’s work?
2) How difficult is it to protect your own work from having others use too much?
Copyright protection is only available for the expression of ideas and not the ideas themselves. This is known as the idea/expression dichotomy.
Paul Finebaum v. Citadel:
A Lesson in Fine Print
By Steven J.J. Weisman
The recent unsealing of the court documents by which WJOX-FM, Birmingham talk show host Paul Finebaum sued Citadel Broadcasting Company, the parent company of WJOX-FM, presents some good lessons in contract negotiations and fine print for every talk show host.
In 2007, Paul Finebaum and Citadel entered into a three-year contract for Finebaum’s services at WJOX-FM. Near the end of that contract and following extensive negotiations, Finebaum and Citadel entered into an “Addendum and Amendment to Employment Agreement” which extended the term of his contract for an additional three years and which provided for increases in compensation for Finebaum. The contract also contained a provision that was not found in the original contract indicating that if Citadel were to file for bankruptcy protection that this would be considered a violation of the contract and grounds for terminating the contract by Finebaum. In fact, Citadel had filed for protection under the bankruptcy laws just a month prior to the signing of the new contract extension in January of 2010.
Less than four months later, in May of 2010, Citadel filed for a modification of its bankruptcy plan which was approved by the United States Bankruptcy Court three weeks later.
A lesson from the NJ101.5 case
By Matthew B. Harrison
Senior Partner, Harrison Strategies
SPRINGFIELD, Mass. –– When choosing to use non-original materials as a portion of programming, it is important to make sure that such usage falls squarely within the accepted affirmative defense of fair use.
A New Jersey federal appeals court recently reinstated a copyright and defamation lawsuit against New Jersey talk radio station, New Jersey 101.5 (WKXW-FM) and its former PM drive team “Carton & Rossi.” Craig Carton currently co-hosts the WFAN, New York morning drive show “Boomer & Carton.” Ray Rossi hosts an evening show on New Jersey 101.5.
The case was simple. New Jersey Monthly (NJM) hired a photographer to take a photo of Carton & Rossi to accompany an article to be published. An unknown employee of WKXW-FM then scanned in the image from NJM and posted it to the WKXW-FM website, among others. The image, as scanned and posted, cut off reference to NJM’s story title, and eliminated the gutter credit identifying the photographer. The station invited visitors to alter the image and submit resulting versions. In all, the station posted 26 of these submissions. At no time did the station or the hosts ask the photographer for permission, and as a result –– the photographer sued.
Hackers are Threatening You
By Steven J.J. Weisman
Legal Editor
BOSTON –– Computer hackers have been in the news in recent months. And with good reason. Hacking by criminals, pranksters and even foreign governments have breached the security of major companies and institutions including, Citibank, EMC, Intel, Google, Northrup Grumman, Walt Disney, Sony, Johnson & Johnson, PBS, Gannett, Sega and even the CIA. The hacking of Sony through its PlayStation network appears to have been done in response to actions taken by Sony with which the computer hackers disagreed. Similar revenge hacking was done to MasterCard, Visa and PayPal when these companies stopped taking donations for WikiLeaks, a company near and dear to many hackers.
And that is what leads me to you.
The Supreme Court Eyes Indecency
By Steven J. J. Weisman, Esq.
Legal Editor
BOSTON –– For those of us old enough to remember vinyl records, the recent appeal by the Justice Department on behalf of the FCC to the Supreme Court of two 2010 decisions of the Second Circuit Court of Appeals which had decided that the FCC’s indecency rules were unconstitutionally vague, unenforceable and chilling of important First Amendment rights, sounds like a broken record. However, this time the Supreme Court may make a ruling that will set the precedent for the new world of media.
The appeal by the Justice Department was a long time in coming and, in fact, the Justice Department obtained two extensions of their filing deadline before finally determining that they would appeal the decisions of the Second Circuit Court of Appeals rather than have the FCC try to rewrite the indecency rules in a manner that would comport with the Second Circuit Court of Appeals decisions.
Don’t Give It Away!
By Matthew B. Harrison, Esq.
Harrison Strategies, LLC.
SPRINGFIELD, Mass. –– On May 16, at 6:30 am Stefani Gordon boarded a Delta flight from New York to Palm Beach. Somewhere along the flight, out the window of her airplane seat, she took a photo, tweeted it to friends when she landed, and then headed off to spend the day with her father. Gordon’s now-famous photo of the space shuttle Endeavour soaring through the clouds got her an overwhelming amount of attention but also landed her smack in the middle of an ethical and legal debate inherent to the future of the internet.
Osama Bin Laden Lives on in the Media
By Steven J.J. Weisman
Legal Editor
BOSTON –– On September 11, 2001, Osama bin Laden went from being a little known terrorist to the world’s most wanted criminal. Until his death on May 2, 2011, he was a constant feature of national and international media. But his influence on the media did not end with the bullets that ended his life. The media’s fascination with him continues.
Less than 24 hours after bin Laden’s death, Walt Disney Co., a company not often linked with international terrorists, filed three trademark applications for the name “Seal Team 6,” the name of the Navy SEALs unit that performed the spectacular raid into Pakistan that resulted in bin Laden’s death. Disney’s application indicated an intention to use the trademark, if granted, on a wide range of products including clothing, footwear, toys, games and even Christmas stockings.
Understanding audio content ownership rights
by Matthew B. Harrison, Esq.
Harrison Legal Group
SPRINGFIELD, Mass. –– Understanding ownership rights of audio content is one of the more common issues to cross my desk. While most of the information that exists on the topic, including court cases and their analysis, is centered on music-based audio, the rules can be similarly applied to both spoken- or music-based content. Therefore, this article will examine the application of such rules to music and aptly apply them to spoken-word content.
A work made for hire is defined as a work created by an employee within the scope of the employee’s employment. A work made for hire can also be created by a contractual agreement between two parties.
Be Careful What you Post on Websites that Sell Advertising
by Matthew B. Harrison, Esq.
Senior Partner, Harrison Strategies
NEW YORK –– Most of us have seen the recent YouTube clip of a woman falling into a fountain at a mall while texting (now dubbed “the fountain lady”). This bit of slapstick reality has attracted millions of views, many duplicates, and even commentaries, remixes and faux interviews. It’s another viral video success and those who boarded that train early are even making money from the ad revenues. But is it legal?
The background involves some mall security employees posting video footage of a fellow female employee falling into a fountain online, while sharing their own “director” commentary while they playback and repeat the video from their security office. With more than three million views in less than two weeks, it spawned many other YouTube videos with their own commentary and creativity. Radio has certainly picked up the story and generated its own share of commentary both on the air and on the web. The identity of the woman was –– at this point –– unknown to the public.
