Philip Morris Hits the Wall on N.Y. Street Auto Race

Stung by pressure from anti-smoking groups and sky-high sponsorship costs, Philip Morris Cos. on Friday backed away from sponsoring a controversial auto race--the Marlboro Grand Prix-- that was to send cars roaring through the streets of New York City.

The move is being viewed by marketing experts as a blow not just to Philip Morris, but to all tobacco companies, which are fast running out of new ways to market their products.

“When you have this kind of controversy, you’re defeating a major goal of sports marketing,” said Brian Murphy, publisher of the Westport, Conn.-based Sports Marketing Letter. “Once you’re cast as the bad guy in something like this, you’re doing exactly the opposite of what you hope to do.”

The unexpected decision to dump the proposed Grand Prix--just seven months after the event was announced--followed loud protests and lawsuits from anti-smoking groups. Several organizations said the city’s plan to promote an event that would mix tobacco advertising with sports was unethical--and could influence young children to smoke.

But even as anti-tobacco groups celebrated on Friday, red-faced officials from Philip Morris, the city of New York and other race promoters insisted that it was strictly a business decision based on studies that indicated that it would cost far more to sponsor the race than the $15 million that was originally projected.

Meanwhile, one anti-smoking organization--which sued the city and ran biting radio spots in opposition to the car race--contended that it had successfully forced Philip Morris to back down.

“We’re not against car racing, but we are against mixing tobacco with sports,” said Joe Cherner, president of SmokeFree Educational Services, a New York-based anti-tobacco group. “Sporting events are the epitome of good health, but everyone knows that using tobacco products causes death.”

Officials at Philip Morris strongly deny that their decision was in any way related to the anti-smoking opposition. “The decision was based solely on financial considerations,” said John Boltz, manager of media affairs at Philip Morris. “The positive feelings far exceeded the expected comments from those in the anti-smoking world.”

The event was expected to pump upward of $50 million into city coffers from tourists eating at restaurants, staying at hotels and purchasing merchandise.

Despite its decision to back out of the race, officials at Philip Morris said they still plan to sponsor a New York City billboard campaign aimed at discouraging children from smoking. The city had required the anti-smoking ads to counter the effect on children from the positive publicity Philip Morris’ Malboro brand was expected to get from the race.