Multicultural fined for contest violations


Demonstrating once again that the FCC is very serious about enforcing its rules about running on-air contests, Multicultural Radio’s KAZN-AM Los Angeles (Pasadena, CA) has been fined 12,000 bucks for what the Commission notice of apparent liability calls its “repeated and willful violation” of the rules requiring a station to fully and accurately disclose the terms of contests and conduct the contest as advertised.
A complaint filed with the FCC claimed irregularities in three different contests that aired on the station in 2001 and 2003. KAZN denied the allegation that its own staffers were awarded prizes in the 2001 contest and told the FCC that it did not conduct the contest, but only announced the winners as part of a remote broadcast at the mall which conducted the contest. The FCC denied that complaint since it was not a station-sponsored contest.

KAZN admitted, though, that two prize certificates for three-day, two-night stays at the Golden Nugget Hotel and Casino in Las Vegas were awarded in 2003 to ineligible recipients – the wife of a station employee and a station sales associate. Multicultural had argued that the awards did not violate the FCC’s contest rules because the certificates were never actually redeemed. The Commission didn’t buy that, ruling that the station failed to follow the announced rules and the award of the two certificates, though never used, reduced the number of prizes available to eligible participants.

In the third contest, also in 2003, KAZN advertised that it would award five television sets to mark the anniversary of a program on the station. In fact, only two TV sets were awarded. Multicultural told the FCC that was because the prize donor only delivered two, not the five that were promised. “A prize donor’s failure to honor its promise to a station, however, does not relieve the station of its duty to conduct a contest as advertised and to honor its promise to the public,” Hillary DeNigro, Chief, Investigations and Hearings Division of the FCC’s Enforcement Bureau wrote in her notice of apparent liability. Unless Multicultural appeals the fine, it has been ordered to pay 12,000 bucks for the violations of the FCC’s contest rules.
Coincidentally, the FCC last week granted Multicultural license renewals for three stations in the LA market, KAZN along with KAHZ-AM and KMRB-AM. The Commission denied several informal objections, either because they didn’t allege any actual rule violation or because Multicultural demonstrated that it had, indeed, complied with the FCC rule in question.

RBR observation: This is not the first time that we’ve seen a licensee get tripped up by a sponsor not delivering on a promised contest prize. At least in this case it was only a few TV sets and, at least by our reading of the FCC’s notice of apparent liability, the station doesn’t have to deliver the missing three sets because no prize winners were ever announced for them. In some other cases, stations have been on the hook to pay for expensive trips and other big prizes that weren’t produced by the sponsor after a winner was announced on the air. As for station employees and their families not being eligible to win prizes – shouldn’t that be in the handbook given to every new employee the day they are hired?