BROADCASTING

SPITZER SUBPOENAES RADIO CONGLOMERATES IN PAYOLA INVESTIGATION

ALBANY- New York Attorney General Eliot Spitzer said yesterday he has subpoenaed nine of the nation’s largest radio conglomerates in his “payola” investigation of major artists and songs that he claims got air time because of payoffs by recording companies.

“A lot of the major songs have been implicated in this and it showed how pervasive the payola infrastructure had become,” Mr. Spitzer told the Associated Press. “Major artists, major songs were sent up the charts through improper payments to buy spins on the air that translated into sales.”

The companies that have received subpoenas control thousands of stations nationwide, including Clear Channel Communications, Infinity, which now operates as CBS Radio, Citadel Broadcasting Cox Radio, Cumulus Broadcasting, Pamal Broadcasting Entercom Communications, Emmis Communications, and ABC, according to court records filed by Mr. Spitzer.

Two major recording companies agreed last year to settle their parts of the investigation. Warner Music Group said it would pay $5 million, and Sony BMG Music Entertainment agreed to pay $10 million.

– Associated Press

INSURANCE

AIG WINS RESTRAINING ORDER TO STOP STARR FROM REISSUING POLICIES

American International Group won a restraining order after accusing an insurance agency controlled by ousted Chairman Maurice “Hank” Greenberg of entering into an unauthorized contract with Berkshire Hathaway Inc.

The order bars Starr Technical Risks Agency, a unit of Greenberg’s C.V. Starr & Co., from reinsuring AIG policies with Berkshire’s National Indemnity unit, New York State Supreme Court Justice Herman Cahn said yesterday. It stands until AIG and C.V. Starr resolve the matter in arbitration.

AIG, the world’s largest insurer, sought restrictions on C.V. Starr in a January 27 legal motion, saying the firm was trying to hijack its business. The claims underscore the increasing acrimony between AIG and Mr. Greenberg, whom the company removed last year amid an accounting probe.

– Bloomberg News

PUBLISHING

NEWS CORP. SAYS SECOND QUARTER PROFITS NEARLY TRIPLED

News Corporation said second-quarter profits almost tripled, buoyed by asset sales and higher sales at its cable television networks.

Net income rose to $1.08 billion, or 33 cents a share, from $386 million, or 13 cents, a year earlier, the New York-based company said yesterday in a statement. Profits excluding the gain were 21 cents, beating the 20-cent estimate from UBS Securities analyst Aryeh Bourkoff. Sales rose 1.5% to $6.67 billion.

– Bloomberg News

PHARMACEUTICALS

PFIZER CONSUMER UNIT COULD ATTRACT J&J, NOVARTIS, OTHERS

Pfizer’s consumer health unit, which makes Listerine mouthwash and Sudafed cold medicine, may attract buyers such as Novartis AG, Johnson & Johnson, and Procter & Gamble, analysts said.

Pfizer said late Tuesday that it’s considering selling or spinning off the business and will provide details at an analyst meeting on Friday. Pfizer, the world’s biggest drugmaker, said it is weighing options, including keeping the unit, while the market value is high for large consumer-health businesses.

– Bloomberg News

IN THE COURTS

INVESTORS QUESTIONED ENRON NINE MONTHS BEFORE FLAMEOUT

HOUSTON – Nine months before Enron flamed out in bankruptcy, some investors were questioning the strength of its businesses despite public assurances from company founder Kenneth Lay and former CEO Jeffrey Skilling that all was well, jurors in their fraud and conspiracy trial learned yesterday.

Those questions and a stock price that dropped to less than $60 per share from its high of $90 in August 2000 prompted Mr. Skilling to hold a conference call in March 2001 to reassure Wall Street that Enron was healthy.

“I have no idea why the stock is down,” Mr. Skilling told analysts who influenced the stock price. “I know this is a bad stock market, but Enron’s in good shape.” The audiotape was played during former Enron investor-relations chief Mark Koenig’s fifth day on the witness stand.

– Associated Press