Pay-to-play, sometimes pay-for-play or P2P, is a phrase used for a variety of situations in which
money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...
is exchanged for services or the privilege to engage in certain activities. The common denominator of all forms of pay-to-play is that one must pay to "get in the game", with the sports analogy frequently arising.
In the entertainment industry
Broadcasting
The term also refers to a growing trend in which individuals or groups may purchase radio or television airtime, much like
infomercials, to broadcast content promoting the payer's interests. While these types of shows are typically shows that have little sponsor support and have no substantiated audience, some major program producers do purchase airtime to "clear" their programs in certain major markets. This type of format is particularly common among religious broadcasters (
televangelism
Televangelism ( tele- "distance" and "evangelism," meaning " ministry," sometimes called teleministry) is the use of media, specifically radio and television, to communicate Christianity. Televangelists are ministers, whether official or self-pr ...
), where the related term ''pay-for-pray'' is used.
Music industry
The term also refers to a growing trend, where venue owners charge an up-front fee to performing artists for the use of their facilities. The practice began in
Los Angeles, California
Los Angeles ( ; es, Los Ángeles, link=no , ), often referred to by its initials L.A., is the largest city in the state of California and the second most populous city in the United States after New York City, as well as one of the world' ...
, during the 1980s. It has become common in many U.S. cities at low-turnout all-ages shows where performers are required to guarantee a minimum attendance through pre-show ticket sales. Pay-to-play gigs are a contentious practice in the UK, and some of the largest pay-to-play gig organisers have generated large amounts of discussion and criticism.
The term pay-to-play was also used as the title to
a song by the band
Nirvana
( , , ; sa, निर्वाण} ''nirvāṇa'' ; Pali: ''nibbāna''; Prakrit: ''ṇivvāṇa''; literally, "blown out", as in an oil lampRichard Gombrich, ''Theravada Buddhism: A Social History from Ancient Benāres to Modern Colombo.' ...
(later renamed to "Stay Away"). The refrain referred to the practice of a band or their record label paying radio stations to put a song into
heavy rotation
In broadcasting, rotation is the repeated airing of a limited playlist of songs on a radio station or satellite radio channel, or music videos on a TV network. They are usually in a different order each time. However, they are not completely ...
. The phrase is also the title to a song by the band
Cringer
Cringer is a fictional large cat in the '' Masters of the Universe'' franchise. He has green and orange striped fur, similar to that of a tiger (although his species is not truly known), and is Prince Adam’s feline companion. Whenever Adam t ...
, in which they denounce the practice.
Music Supervision
A music supervisor is a person who combines music and visual media. According to The Guild of Music Supervisors, a music supervisor is “a qualified professional who oversees all music related aspects of film, television, advertising, video games ...
is a booming field in the music industry, whose professionals place music in many kinds of film, television, commercial, web-based and other live and recorded media cues. While some music supervisors are paid only by their employer or per-project, some companies use a pay-to-play model wherein artists pay to submit tracks for consideration to a variety of media concerns, only to have to pay the Music Supervision intermediary again at a cost of half of its earning for the track placement should it win a placement.
Online gaming
The term is also used as slang to refer to Internet services that require that users pay to use them. Usually, it refers to
MMORPGs, where players must pay to maintain a playing account, as is the case with ''
Eve Online
''Eve Online'' (stylised ''EVE Online'') is a space-based, persistent world massively multiplayer online role-playing game (MMORPG) developed and published by CCP Games. Players of ''Eve Online'' can participate in a number of in-game profes ...
'' or ''
World of Warcraft
''World of Warcraft'' (''WoW'') is a massively multiplayer online role-playing game (MMORPG) released in 2004 by Blizzard Entertainment. Set in the ''Warcraft'' fantasy universe, ''World of Warcraft'' takes place within the world of Azeroth ...
''. This is in contrast to
free-to-play
Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which ...
games. Many formerly pay-to-play MMORPGs have switched to a free-to-play model, including ''
EverQuest
''EverQuest'' is a 3D fantasy-themed massively multiplayer online role-playing game (MMORPG) originally developed by Verant Interactive and 989 Studios for Windows PCs. It was released by Sony Online Entertainment in March 1999 in North Amer ...
'', ''
Star Wars: The Old Republic'', ''
Aion: The Tower of Eternity'', and ''
The Lord of the Rings Online''. The game ''
RuneScape
''RuneScape'' is a fantasy massively multiplayer online role-playing game (MMORPG) developed and published by Jagex, released in January 2001. ''RuneScape'' was originally a browser game built with the Java programming language; it was lar ...
'' features both free accounts for no money or pay-to-play accounts, with a much larger list of features.
The term may also refer to something like the online game ''
Habbo Hotel'', where there are games inside the game, which you may pay-to-play to join into a game whilst it is in progress.
Stand-up comedy
In a pay-to-play gig, the performer will either pay the promoter some money to be allowed to perform at the show, or will have to offer some in-kind payment. In a conventional comedy club, the promoter will pay the acts for their performance, and will raise the money to stage the gig by charging the audience. Some clubs offer open mic slots, where newer acts are allowed to learn the craft, unpaid; this is not the same as pay-to-play. Many comedians are against pay-to-play schemes, which they consider exploitative.
Pay-to-play was cited as a cause of major damage to the quality of the New York comedy scene. In economic terms, a pay-to-play strategy elevates those people who can afford to perform for nothing, or can afford to pay for their stage-time, which has nothing to do with their quality as an act. The pay-to-play promoter is able to profit from the goodwill and desire to perform of the acts, while discouraging appearances by those who cannot afford to perform without payment.
In some shows, the performer is asked to bring a certain number of paying audience members. As a payment in kind policy, this has caused similar controversy to pay-to-play. A show where the acts are obliged to bring the audience is called a ''bringer''.
Visual arts
Similar to the trend cited above in music, pay-to-play is the practice of visual artists paying gallery owners, dealers, curators, publishers, festival and contest sponsors, and better-established artists to critique, review, judge, exhibit, collect, or publish works created in such disparate media as painting, photography, video, and sculpture. Pay-to-play is a type of
vanity gallery A vanity gallery is an art gallery that charges artists fees to exhibit their work and makes most of its money from artists rather than from sales to the public. Some vanity galleries charge a lump sum to arrange an exhibition, while others ask ar ...
. Pay-to-play is characterized by
cash flow that moves away from visual artists. Pay-to-play is sold to visual artists and justified by visual artists as "an investment in future sales" and may be
self-victimization.
In engineering, design, and construction
Pay-to-play in the engineering, design, and construction industry can refer to:
#monetary and gift exchanges to persuade decision makers such that they make decisions in favor of those offering the money or gifts;
#exchanges of money or gifts and providing sponsorships such that the engineering, design, or construction company gets considered for work that would not otherwise be available (this in essence becomes a type of pre-qualification for work—contracts; and
# illegal acts of bribery.
Pay-to-play might also be used to explain the appearance of engineering, design, and construction public work being done not in an open and fair manner.
PwC's 2014 Global Economic Crime Survey explored financial corruption in the construction industry. This survey found that asset misappropriation and bribery were the most prevalent crimes, with nearly 70% of crimes being perpetrated by insiders. In 2018, 14 people were charged with bribe-taking,
money laundering,
grand larceny
Larceny is a crime involving the unlawful taking or theft of the personal property of another person or business. It was an offence under the common law of England and became an offence in jurisdictions which incorporated the common law of Engl ...
and other charges relating to construction projects at Bloomberg LP's offices in New York.
In corporate finance
Pay-to-play is a provision in a corporation's
charter documents (usually inserted as part of a
preferred stock
Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt inst ...
financing) that requires stockholders to participate in subsequent stock offerings in order to benefit from certain
antidilution protections. If the stockholder does not purchase his or her pro rata share in the subsequent offering, then the stockholder loses the benefit(s) of the antidilution provisions. In extreme cases, investors who do not participate in subsequent rounds must convert to
common stock
Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Comm ...
, thereby losing the protective provisions of the preferred stock. This approach minimizes the fears of major investors that small or minority investors will benefit by having the major investors continue providing needed equity, particularly in troubled economic circumstances for the company. It is considered a "harsh" provision that is usually only inserted when one party has a strong bargaining position.
In finance
In the finance industry, the term ''pay-to-play'' describes the practice of giving gifts to political figures in the hopes of receiving investment business in return.
In the U.S., after discovering that this practice was not uncommon and was undermining the integrity of the financial markets,
U.S. Securities and Exchange Commission (SEC), the
Financial Industry Regulatory Authority (FINRA) and the
Municipal Securities Rulemaking Board (MSRB) severely regulated and limited the interactions and gifts-giving practices between the investment industry personnel and politicians and candidates. This can be seen most notably in Rule 206(4)-5 of the Investment Advisers Act of 1940 and Rules G-37 and G-38 of the MSRB Rule Book.
Pay-to-play occurs when investment firms or their employees make campaign contributions to politicians or candidates for office in the hope of receiving business from the municipalities that those political figures represent. It usually applies to investment banking firms that hope to receive
municipal securities
A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate.
The term ''municipality'' may also mean the g ...
underwriting business in return or to investment management firms that hope to be selected for the management of government funds such as state pension funds.
An example of this form of corruption or bribery is the 2009 probe by then New York State Attorney General
Andrew Cuomo
Andrew Mark Cuomo ( ; ; born December 6, 1957) is an American lawyer and politician who served as the 56th governor of New York from 2011 to 2021. A member of the Democratic Party, he was elected to the same position that his father, Mario Cu ...
into
private equity funds payments to
placement agents with political connections to obtain business with the
New York State Common Retirement System.
In politics
In politics, ''pay-to-play'' refers to a system, akin to payola in the music industry, by which one pays (or must pay) money to become a
player
Player may refer to:
Role or adjective
* Player (game), a participant in a game or sport
** Gamer, a player in video and tabletop games
** Athlete, a player in sports
** Player character, a character in a video game or role playing game who ...
. Almost always used in criticism, the phrase also refers to the increasing cost of elections and the "price of admission" just to run for office and the concern "that one candidate can far outspend his opponents, essentially buying the election".
Typically, the payer (an individual, business, or organization) makes
campaign contributions to public officials,
party
A party is a gathering of people who have been invited by a host for the purposes of socializing, conversation, recreation, or as part of a festival or other commemoration or celebration of a special occasion. A party will often featur ...
officials, or parties themselves, and receives political or pecuniary benefit such as
no-bid government contracts, influence over legislation, political appointments or nominations, special access or other favors. The contributions, less frequently, may be to nonprofit or institutional entities, or may take the form of some benefit to a third party, such as a family member of a governmental official. Incumbent candidates and their political organizations are typically the greatest beneficiaries of pay-to-play. Both the
Democratic and
Republican
Republican can refer to:
Political ideology
* An advocate of a republic, a type of government that is not a monarchy or dictatorship, and is usually associated with the rule of law.
** Republicanism, the ideology in support of republics or agains ...
parties have been criticized for the practice.
While the direct exchange of campaign contributions for contracts is the most visible form of pay-to-play, the greater concern is the central role of money in politics, and its skewing of both the composition and the policies of government. Thus, those who can pay the price of admission, such as to a $1000/plate dinner or $25,000 "breakout session", gain access to power and/or its spoils, to the exclusion of those who cannot or will not pay: "giving certain people advantages that other
don't have because they donated to your campaign". Good-government advocates consider this an outrage because "political fundraising should have no relationship to policy recommendations". Citizens for Responsible Ethics in Washington called the "pay-to-play Congress" one of the top 10 scandals of 2008.
Many seeking to ban or restrict the practice characterize pay-to-play as legalized corruption. Pay-to-Play practices have come under scrutiny by both the federal government and a number of states. In
Illinois
Illinois ( ) is a state in the Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolitan areas include, Peoria and Rockf ...
, federal prosecutors in 2006 were investigating "pay-to-play allegations that surround
Democratic Illinois Gov.
Rod Blagojevich's administration". The allegations of pay-to-play in Illinois became a
national scandal after the arrest of Gov. Blagojevich in December 2008, on charges that, among other things, he and a staffer attempted to "sell" the vacated U.S. Senate seat of then-president-elect
Barack Obama
Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the ...
.
Many agencies have been created to regulate and control campaign contributions. Furthermore, many third-party government "watchdog" groups have formed to monitor campaign donations and make them more
transparent
Transparency, transparence or transparent most often refer to:
* Transparency (optics), the physical property of allowing the transmission of light through a material
They may also refer to:
Literal uses
* Transparency (photography), a still, ...
. The U.S. Securities and Exchange Commission has created a rule that puts some restrictions on asset managers when they make campaign contributions. The New York and Tennessee Republican parties filed a lawsuit against the SEC in August over the 2010 rule, arguing that it impedes free speech, seeking a preliminary injunction against the rule. U.S. District Judge Beryl Howell questioned whether the parties have standing to bring the case, noting they failed to name the potential donors and did not cite any investment advisers who are upset about the rule.
The opposite of a pay-to-play system is one that is "fair and open"; the
New Jersey
New Jersey is a state in the Mid-Atlantic and Northeastern regions of the United States. It is bordered on the north and east by the state of New York; on the east, southeast, and south by the Atlantic Ocean; on the west by the Delaware ...
Pay-to-Play Act specifically sets out bid processes that are or are not considered fair and open, depending upon who has contributed what to whom. In a series of academic research articles, Christopher Cotton shows how selling access may lead to better policy decisions compared to other means of awarding access. He also illustrates how wealthy interest groups are not necessarily better off from having better access to politicians.
Because of individual federal campaign contribution limits in the wake of the
Bipartisan Campaign Reform Act
The Bipartisan Campaign Reform Act of 2002 (, ), commonly known as the McCain–Feingold Act or BCRA (pronounced "bik-ruh"), is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing o ...
(McCain-Feingold), pay-to-play payments of "
soft money
The financing of electoral campaigns in the United States happens at the federal, state, and local levels by contributions from individuals, corporations, political action committees, and sometimes the government. Campaign spending has risen ...
" (money not contributed directly to candidate campaigns and that does not "expressly advocate" election or defeat of a candidate) donations to state parties and county committees have come under greater scrutiny. This method refers to money that is donated to an intermediary with a higher contribution limit, which in turn donates money to individual candidates or campaign committees who could not directly accept the payor's funds.
See also
*
Bid rigging
Bid rigging is a fraudulent scheme in procurement auctions resulting in non-competitive bids and can be performed by corrupt officials, by firms in an orchestrated act of collusion, or between officials and firms. This form of collusion is illegal ...
*
Bribery
*
Bribery Act 2010
The Bribery Act 2010 (c.23) is an Act of the Parliament of the United Kingdom that covers the criminal law relating to bribery. Introduced to Parliament in the Queen's Speech in 2009 after several decades of reports and draft bills, the Act recei ...
, UK
*
Conflict of interest
*
Corruption
*
Corruption in India
Corruption in India is an issue which affects economy of central, state and local government agencies in many ways. Corruption is blamed for stunting the economy of India. A study conducted by Transparency International in 2005 recorded that ...
*
Corruption in the United States
*
Foreign Corrupt Practices Act
*
American Anti-Corruption Act
The American Anti-Corruption Act (AACA), sometimes shortened to Anti-Corruption Act, is a piece of model legislation designed to limit the influence of money in American politics by overhauling lobbying, transparency, and campaign finance laws. ...
*
Group of States Against Corruption (GRECO) of the
Council of Europe
*
Influence peddling
Influence peddling is the practice of using one's influence in government or connections with authorities to obtain favours or preferential treatment for another, usually in return for payment. It is also called traffic of influence or trading i ...
*
Microtransaction
*
Money trail
"Follow the money" is a catchphrase popularized by the 1976 docudrama film '' All the President's Men'', which suggests political corruption can be brought to light by examining money transfers between parties.
Origin
For the film, screenwriter ...
– Money loop
*
Organized crime
Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
*
Principal–agent problem
*
Quid pro quo
*
Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil ...
*
Paywall
References
{{refend
Political terminology
Business models
Corruption