Pay-to-play

Pay to play, sometimes pay for play, is a phrase used for a variety of situations in which money 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.

The term also refers to a growing trend in which individuals or groups may purchase radio or television airtime, much like infomercials, to have their views heard on broadcast stations. 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), where the related term pay for pray is used.

Pay to play is a provision in a corporation's charter documents (usually inserted as part of a financing) that requires stockholders to participate in subsequent stock offerings in order to benefit from certain 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 , 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.

Pay to play in the engineering, design, and construction industry can refer to:

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.

In the finance industry, the term "pay-to-play" describes the practice 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.

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