Pay-to-play
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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: m ...
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.


Terminology

The term "pay-to-play"' in the political context refers to a practice where individuals or entities, often through campaign donations or financial contributions, gain access or influence over government officials and
decision-making In psychology, decision-making (also spelled decision making and decisionmaking) is regarded as the Cognition, cognitive process resulting in the selection of a belief or a course of action among several possible alternative options. It could be ...
processes (Smith, 2020). This term is used to describe a perceived link between political contributions and political favors or access (Jones, 2019). While it is a widely used term in discussions about campaign finance and political corruption, it doesn't have a single origin or a specific creator (Brown, 2017).


Origin and usage

The concept of "pay-to-play" has been present in political discourse for many years (Johnson, 2005). However, it gained significant prominence in the United States during the 20th century, particularly in the context of campaign finance regulations and political fundraising practices (Smith, 2020). The specific phrase "pay-to-play" is believed to have emerged organically within political and media discussions, reflecting the idea that political access and influence could be bought through financial contributions (Davis, 2013). Prominence and Usage: The term "pay-to-play" is most commonly used in discussions about campaign finance,
lobbying Lobbying is a form of advocacy, which lawfully attempts to directly influence legislators or government officials, such as regulatory agency, regulatory agencies or judiciary. Lobbying involves direct, face-to-face contact and is carried out by va ...
, and political corruption (Smith, 2020). It gained prominence in the late 20th and early 21st centuries as concerns grew about the increasing influence of money in politics (Brown, 2017).


Effects on people

"Pay-to-play" practices can have various effects on the political system and the general populace: Undermining Equal Representation: It can create a perception that those with financial resources have greater access to policymakers, potentially undermining the principle of equal representation (Jones, 2019). Policy Influence: There are concerns that large political contributions can lead to policies that favor the interests of wealthy donors over the broader public (Davis, 2013). Erosion of Trust: It may erode public trust in government, as people believe elected officials are more responsive to donors than to constituents (Johnson, 2005). Barriers to Participation: It can discourage individuals without financial means from engaging in the political process, potentially limiting diversity in political leadership (Smith, 2020). These effects highlight the complex and contentious nature of "pay-to-play" dynamics in politics, with implications for democratic principles and governance.


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
infomercial An infomercial is a form of television commercial that resembles regular TV programming yet is intended to promote or sell a product, service or idea. It generally includes a toll-free telephone number or website. Most often used as a form of di ...
s, 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 (from ''televangelist'', a blend of ''television'' and ''evangelist'') and occasionally termed radio evangelism or teleministry, denotes the utilization of media platforms, notably radio and television, for the marketing of relig ...
), 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, often referred to by its initials L.A., is the List of municipalities in California, most populous city in the U.S. state of California, and the commercial, Financial District, Los Angeles, financial, and Culture of Los Angeles, ...
, 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 ''A Song'' is an album by the American musician Neil Sedaka, released in 1977. It was produced by George Martin and released in 1977 on the Elektra label in the US, marking the beginning of Sedaka's association with Elektra, which would run thr ...
by the band
Nirvana Nirvana, in the Indian religions (Jainism, Hinduism, Buddhism, and Sikhism), is the concept of an individual's passions being extinguished as the ultimate state of salvation, release, or liberation from suffering ('' duḥkha'') and from the ...
(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 sh ...
. The phrase is also the title to a song by the band
Cringer The Masters of the Universe, Masters of the Universe franchise, created in 1982 as a toyline by United States, American company Mattel, contained many characters in its various incarnations as a toyline, the television series ''He-Man and the Maste ...
, in which they denounce the practice. Music Supervision 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
MMORPG A massively multiplayer online role-playing game (MMORPG) is a video game that combines aspects of a role-playing video game and a massively multiplayer online game. As in role-playing games (RPGs), the player assumes the role of a Player charac ...
s, where players must pay to maintain a playing account, as is the case with '' Eve Online'' or ''
World of Warcraft ''World of Warcraft'' (''WoW'') is a 2004 massively multiplayer online role-playing (MMORPG) video game developed and published by Blizzard Entertainment for Windows and Mac OS X. Set in the '' Warcraft'' fantasy universe, ''World of War ...
''. 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 for free. The term "free-to-play business model" or simply, "free-to-play model", refers collectively to business models tha ...
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. It was released by Sony Online Entertainment in March 1999 in North America, ...
'', '' Star Wars: The Old Republic'', '' Aion: The Tower of Eternity'', and ''
The Lord of the Rings Online ''The Lord of the Rings Online'' is a massively multiplayer online role-playing game (MMORPG) for Microsoft Windows and previously for OS X, set in J. R. R. Tolkien's Middle-earth, taking place during the time period of ''The Lord of the Rings''. ...
''. 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), Java progr ...
'' 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 ''Habbo'', also called ''Habbo Hotel'', is a virtual world and massively multiplayer online game. It is owned and operated by Sulake. Founded in 2000, ''Habbo'' has expanded to nine online communities (or "hotels"), with users from more tha ...
'', 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 An open mic or open mike (shortened from "open microphone") is a live show at a venue such as a coffeehouse, nightclub, comedy club, strip club, or pub, often taking place at night (an open mic night), in which audience members may perform on ...
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 Cash flow, in general, refers to payments made into or out of a business, project, or financial product. It can also refer more specifically to a real or virtual movement of money. *Cash flow, in its narrow sense, is a payment (in a currency), es ...
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 Playing the victim (also known as victim playing, victim card, or self-victimization) is the fabrication or exaggeration of victimhood for a variety of reasons such as to justify abuse to others, to manipulate others, a coping strategy, attentio ...
.


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 Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...
,
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 Eng ...
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 ins ...
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 anti-dilution 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 C ...
, 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, the 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 The Investment Advisers Act of 1940, codified at through , is a United States federal law that was created to monitor and regulate the activities of investment advisers (also spelled "advisors") as defined by the law. Passing unanimously in both t ...
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 municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often ...
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 The attorney general of New York is the chief legal officer of the U.S. state of New York and head of the Department of Law of the state government. The office has existed in various forms since 1626, originally established under the Dutch c ...
Andrew Cuomo Andrew Mark Cuomo ( , ; born December 6, 1957) is an American politician and lawyer who served as the 56th governor of New York from 2011 until his resignation in 2021. A member of the Democratic Party and son of former governor Mario Cuomo, ...
into
private equity fund A private equity fund (abbreviated as PE fund) is a collective investment scheme used for making investments in various equity (and to a lesser extent debt) securities according to one of the investment strategies associated with private equity. ...
s payments to placement agents with political connections to obtain business with the
New York State Common Retirement System The government of the State of New York, headquartered at the New York State Capitol in Albany, New York, Albany, encompasses the administrative structure of the U.S. state, US state of New York (state), New York, as established by the New Yor ...
.


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 i ...
. 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 Campaign financealso called election finance, political donations, or political financerefers to the funds raised to promote candidates, political parties, or policy initiatives and referendums. Donors and recipients include individuals, corpora ...
to public officials,
party A party is a gathering of people who have been invited by a Hospitality, 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 oft ...
officials, or parties themselves, and receives political or pecuniary benefits 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 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 several states. In
Illinois Illinois ( ) is a U.S. state, state in the Midwestern United States, Midwestern United States. It borders on Lake Michigan to its northeast, the Mississippi River to its west, and the Wabash River, Wabash and Ohio River, Ohio rivers to its ...
, federal prosecutors in 2006 were investigating "pay-to-play allegations that surround Democratic Illinois Gov.
Rod Blagojevich Rod R. Blagojevich ( ; born December 10, 1956), often referred to by his nickname "Blago", is an American politician who served as the 40th governor of Illinois from 2003 to 2009. A member of the Democratic Party, Blagojevich previously worked ...
'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 was the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, he was the first African American president in American history. O ...
. 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. 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 and seeking a
preliminary injunction An injunction is an equitable remedy in the form of a special court order compelling a party to do or refrain from doing certain acts. It was developed by the English courts of equity but its origins go back to Roman law and the equitable reme ...
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 "fair and open"; the
New Jersey New Jersey is a U.S. state, state located in both the Mid-Atlantic States, Mid-Atlantic and Northeastern United States, Northeastern regions of the United States. Located at the geographic hub of the urban area, heavily urbanized Northeas ...
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 ( ), is a United States federal law that amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaign ...
(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 rise ...
" (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

*
Slotting fee A slotting fee, slotting allowance, pay-to-stay, or fixed trade spending is a fee charged to produce companies or manufacturers by supermarket distributors (retailers) in order to have their product placed on their shelves or within their supply ...
, pay-to-stay *
Bid rigging Bid rigging is a fraudulent scheme in a procurement action which enables companies to submit non-competitive bids. It can be performed by corrupt officials, by firms in an orchestrated act of collusion, or by officials and firms acting together. ...
*
Bosman ruling ''Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman'' (1995) C-415/93 (known as the Bosman ruling) is a 1995 European Court of Justice decision concerning freedom of movement for workers, freedom of associati ...
*
Bribery Bribery is the corrupt solicitation, payment, or Offer and acceptance, acceptance of a private favor (a bribe) in exchange for official action. The purpose of a bribe is to influence the actions of the recipient, a person in charge of an official ...
*
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 re ...
, UK *
Conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple wikt:interest#Noun, interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates t ...
*
Influence peddling Influence peddling, also called traffic of influence or trading in influence, 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 ...
*
Corruption Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...
*
Corruption in the United States Corruption in the United States is the act of government officials Political corruption, abusing their political powers for private gain, typically through bribery or other methods, in the United States government. Corruption in the United Stat ...
*
Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from Bribery, bribing foreign government officials to benefit their business interests. The FCPA is applic ...
*
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 ...
*
Microtransaction Microtransaction (mtx) refers to a business model where users can purchase in-game virtual goods with micropayments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers. While microtransactions ...
*
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 Wi ...
– Money loop *
Organized crime Organized crime is a category of transnational organized crime, transnational, national, or local group of centralized enterprises run to engage in illegal activity, most commonly for profit. While organized crime is generally thought of as a f ...
*
Principal–agent problem The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity (the " agent") takes actions on behalf of another person or entity (the " principal"). The problem worsens when there is a gr ...
*
Quid pro quo ''Quid pro quo'' (Latin: "something for something") is a Latin phrase used in English to mean an exchange of goods or services, in which one transfer is contingent upon the other; "a favor for a favor". Phrases with similar meanings include: " ...
*
Paywall A paywall is a method of restricting access to content (media), content, with a purchase or a subscription business model, paid subscription, especially news. Beginning in the mid-2010s, newspapers started implementing paywalls on their website ...
*
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 s ...


References

{{refend Political terminology Business models Corruption