Definitions

play act

Pay to Play

Pay to Play can refer to several different concepts.

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 in order to become a player. 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.

Typically, the payor (an individual, business, or organization) makes campaign contributions to public officials, party 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. The phrase, almost always used in criticism, also refers to the increasing cost of elections and the "price of admission" to even run and the concern "that one candidate can far outspend his opponents, essentially buying the election.

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 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[s] 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.

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. Many seeking to ban or restrict the practice characterize pay-to-play as legalized corruption.

The opposite of a pay-to-play system is one that is "fair and open"; the New Jersey 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.

Because of individual federal campaign contribution limits in the wake of the Bipartisan Campaign Reform Act (McCain-Feingold), pay-to-play payments of "soft money" (money not contributed directly to candidate campaigns and which do not "expressly advocate" the election or defeat of a candidate) donations to state parties and county committees have come under greater scrutiny. This method refers to money which 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.

Pay-to-Play practices have come under scrutiny by both the federal government and a number of states. In Illinois, federal prosecutors have taken the lead in investigating "pay-to-play allegations that surround Illinois Gov. Rod Blagojevich's administration. 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.

In music

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, CA, 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. reference, article

The term "Pay to Play" is also used as the title to a song by the band Nirvana and as the title to a song by the Cringer, in which they denounce the practice.

In the 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 mild form of vanity publishing. 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 online gaming

The term is also used as slang to refer to many services online that require that users pay in order to use them. Usually, it refers to MMORPG games, where players must pay to maintain a playing account, as is the case with World of Warcraft, Final Fantasy XI, Ragnarok Online, or Mu Online. The game RuneScape 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.

In corporate finance

Pay to Play is a provision in a corporation's charter documents (usually inserted as part of a preferred stock 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, 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.

Insurance

No Pay No Play is a concept in auto insurance law where an uninsured driver is not permitted to recover money for property damage or bodily injury damages caused by an auto accident even if the uninsured driver is not at fault.

References

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