The Federal Communications Commission (FCC) has proposed a $14,000 fine against radio broadcaster Audacy for how it carried out a national contest three years ago.
In a notice of apparent liability for forfeiture issued on Monday, the FCC said Audacy did not conduct the $1,000 cash contest “in a manner substantially as announced and advertised.”
The contest ran on nearly 200 Audacy stations from early March to mid-April 2021, and required listeners to tune in to a participating Audacy station from 7 a.m. to around 6 p.m. local time in order to learn a “keyword” that they would have to submit online by the end of a given hour.
Audacy collected the correct responses, and one person was supposed to be selected each hour for the prize, giving listeners around 300 chances to win throughout the duration of the contest. Winners were supposed to be notified within three days, and checks were to be mailed out a few weeks later.
But that didn’t always happen. On some days, Audacy said a part-time employee was tasked with drawing the winner each hour — and, sometimes, they did not. On other days, the part-time employee failed to notify the selected winner as outlined in the contest’s rules. The FCC said the employee’s manager “had not provided proper oversight to ensure that all winners had been selected in a timely manner and…some of the selected winners had not been notified of their selection.”
The incident impacted at least 50 potential or actual winners, who were either not selected or not properly notified about their selection, as required under the contest’s rules, the FCC said.
The FCC sent a letter of inquiry to Audacy in August 2021 after receiving a complaint from a listener that at least one of the participating stations had not performed the contest as advertised. Audacy then selected 50 “replacement” contest winners, and submitted a response to the FCC’s letter, affirming the situation.
As of November 2021, all actual and replacement winners had been notified and received their prizes, the FCC said this week.
But that doesn’t absolve the broadcaster of its responsibilities. As a licensed radio operator, Audacy is required to follow federal regulations regarding contests on AM and FM broadcast stations. Those regulations require the broadcaster to notify winners in a timely manner as outlined in the contest rules, and they “failed to conduct its contest fairly and substantially as represented to the public,” the FCC said.
In its response letter, Audacy said it should not face a fine because the number of potential winners who were affected by the situation was “insubstantial compared to the scope of the contest.” But the FCC rejected that defense, finding that slightly more than 16 percent of potential winners were affected by Audacy not drawing a name or failing to notify them of their winnings as required under the contest rules. The agency also said Audacy’s attempt to remedy the situation after its letter of inquiry “do not mitigate its liability.”
The fine was calculated by charging two violations — the collective failure to draw in one instance, and the collective failure to notify in another — which are punishable by $4,000 fines each. The FCC said the offenses also warrant an upward adjustment of $2,000, which brings the total fine to $10,000. The FCC also imposed a base fine of $4,000, bringing the total forfeiture amount to $14,000.
“In applying the applicable statutory factors, we also consider whether there is any basis for a downward adjustment of the proposed forfeiture,” the FCC said in its notice on Monday. “Here, we find none. As previously held: the apparent misconduct was serious, not minor; [Audacy] did not disclose the apparent misconduct until after receiving the [letter]; and [Audacy] has a history of prior violations.”
Audacy has been ordered to pay the fine within the next 30 days. It may also use that time to file an appeal seeking a reduction or cancellation of the fine, with any reasons and supporting evidence that may convince the FCC to do either action.
