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Monday, June 17, 2024 | Back issues
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$10 Million Demand Alleges Radio Payola

LOS ANGELES (CN) — A former radio host known as Chiquibaby sued the Spanish Broadcasting System on Monday, claiming it fired her and her husband for objecting to its illegal payola scheme: demanding $5,000 from musicians to play one song one time.

Stephanie Himondis aka Chiquibaby says her husband, co-plaintiff Gerardo Lopez, earned more than $120,000 base pay for managing two SBS stations, and she got more than twice that, through base pay and bonuses.

Defendant SBS is "the largest Hispanic-controlled radio broadcasting company in the United States," owning and/or operating at least 20 FM stations, in L.A., New York, Miami, Chicago and elsewhere, according to the Oct. 17 complaint in Superior Court.

The couple claim that SBS "demanded that Mr. Lopez engage in an illegal payola scheme" as part of his job. "SBS demanded five thousand dollars ($5,000) in payment from musicians in exchange for one play of one song on the air per station," the complaint states.

"SBS flat-out refused to play music on its stations if musicians refused to pay SBS's illegal 'fee' for the same. SBS in turn gave Mr. Lopez a monthly sales quota of five (5) music spots, i.e., SBS required Mr. Lopez to illegally sell and collect from musicians at least five such 'fees' each month, per station, per month, which would yield at least $50,000 per month of $600,000 per year in illegal revenue to SBS."

Payola is illegal, under Federal Communications Commission regulations.

Himonidis' radio career began in Guadalajara, Mexico. She moved to Fresno and worked her way up into the Los Angeles market. In 2014 was DJ and host of one of SBS' most successful offerings, The Chiquibaby Show, during the 5 to 10 a.m. drive-time slot, with good ratings in the influential markets of Northern and Southern California

Her husband was a successful radio executive who moved to SBS in 2014 after the company's CEO Raul Alarcon recruited him away from his Univision, according to the complaint. Lopez, who was not yet married but in a relationship with Himonidis, persuaded her to follow him to SBS.

They say their work produced a spike in ratings not only during The Chiquibaby Show but across the broadcast system's various platforms. Then, Lopez says, he found that payola was part of his job.

In August 2014, about four months into his tenure, he told Himonidis, who also objected, so he complained to Jesus Salas, executive vice president of programming at SBS, but was rebuffed, the complaint states.

Himonidis then took her complaints directly to CEO Alarcon, to no avail, she says. Lopez was fired in September, after he refused to participate in the payola.

None of the SBS executives are named as defendants. The only defendants are SBS, a Delaware corporation, and SBS Inc. of California.

The couple say Lopez was fired though his station was ranked number one in the region, and both were denied their performance bonuses.

Himonidis says she hired an attorney, who sent SBS a letter in October complaining about the payola scheme and underscoring her refusal to participate in it. That brought retaliation from the station, which appointed a large security guard to hound her at work, moved her show to the graveyard shift and fired her entire support staff, according to the complaint.

She says the retaliation culminated in early January 2015, when SBS fired her, citing false ratings.

"Notwithstanding SBS's months-long efforts to nosedive Ms. Himonidis's ratings by moving her show to the worst time slot and firing her entire radio crew and her fiancé, Ms. Himonidis still maintained or exceeded the minimum rating requirements set forth in her employment agreement," the complaint states. "Indeed, Ms. Himonidis's program remained the top-ranked and highest-rated Spanish-language program in Los Angeles when SBS fired her in January 2015."

Himonidis and Lopez seek more than $10 million for wrongful termination, breach of contract, Labor Code violations, breach of faith and intentional infliction of emotional distress.

Payola scandals have a long and lurid history in U.S. broadcasting.

Alan Freed, the radio DJ credited with coining the term rock 'n' roll during his stint at WJW in Cleveland, saw his career destroyed after pleading guilty to two charges of commercial bribery in 1962.

Dick Clark almost saw his own burgeoning career engulfed in a payola scandal in the late 1950s and early 60s, but managed to avoid Freed's fate when he divested his financial portfolio of any interest in the music industry before testifying to the United States Senate in 1959.

Congress investigated payola in the late 1950s and '60s, largely at the behest of the old guard of the music business, frightened at the changing landscape of the music business brought on by the hit radio format.

As a result of investigations, radio DJs were stripped of their power to select songs, and stations were forced to hire program directors. The music industry still occasionally circumvented the regulations and payola scandals continued to intermittently plague the music and broadcast industries.

The New York attorney general prosecuted record labels for payola-related schemes and settled out of court with Sony BMG Music Entertainment for $10 million in 2005. The state settled with Warner Music for $5 million and with Universal Music Group for $12 million in the same year.

SBS did not return an email requesting comment.

Himonidis and Lopez are represented by Keith Fink, in Los Angeles.

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