Tobacco Might Have to Butt Out of Racing : Motor sports: Events need the money and advertisers like the exposure, but federal regulations would curtail relationship.

The announcer at the Watkins Glen International Speedway said it was a lap of honor and gratitude.

The 41 NASCAR drivers, circling the New York track in the back of pickup trucks, waving American flags, called it a show of loyalty and protest.

And the representatives in attendance from tobacco industry giant R.J. Reynolds smiled and said this was the reason they got involved in motor sports 25 years ago.

The Winston Cup event on Aug. 13 began with a tribute to the financial contribution that companies such as R.J. Reynolds, Philip Morris and U.S. Tobacco have made to motor racing. It was like a giant hug among brothers--a way to say “thanks” but also, maybe, “goodby.”

Because of proposed regulations on tobacco advertising by President Clinton and the Food and Drug Administration, drivers, pit crews, racing executives and tobacco giants wonder what will become of the profitable relationship between motor sports and tobacco.

They wonder if 1995 or possibly ’96 will be the last time auto racing inhales the scent of tobacco industry cash and if the tobacco firms will lose their best form of advertising and last link to television and radio.

“There is a great concern,” said Andrew Craig, president and chief executive officer of Championship Auto Racing Teams. “Their support is critical for the future of our events, and I think motor sports has been a good investment for them.”

No one can predict how the restrictions, if passed, will affect the sport and the sponsors. The FDA has put a deadline of Nov. 9 on comments and recommendations for the executive proposal, but the issue probably won’t be settled in the near future.

Meanwhile, both the sport and sponsors are readying for a legal battle over the FDA’s claim that sports sponsorship and advertising contribute to under-age smoking.

“It was almost inevitable that this would happen,” said Lesa Ukman, editor of the International Events Group sponsorship report. “Both sides have seen this coming.”

Under the proposed guidelines, tobacco companies could no longer sponsor events under their product name. The Winston Cup would have to be changed to the R.J. Reynolds Cup or the Marlboro 500 to the Philip Morris 500.

Heavy restrictions would alter team sponsorship as well. Tobacco brand names on cars, boats and motorcycles would have to be in black-and-white text and be followed by a description of the product such as “cigarettes” in text half as large. The phrase “Nicotine-Delivery Device” would also be required.

Companies would also be forbidden from using the product name on hats, shirts, golf tees or any other promotional items, which are popular among racing fans.

“While they say you can still sponsor, the restrictions make it financially impossible to do so,” said T. Wayne Robertson, president of Sports Marketing Enterprises, the sports arm of R.J. Reynolds.

According to estimates by racing officials, more than $15 million of tobacco funding is paid to NASCAR annually, $50 million to Indy car racing and more than $10 million to drag racing’s National Hot Rod Assn.

That funding goes to event as well as team sponsorship, which provides high visibility.

Philip Morris sponsors the powerful Penske team’s Marlboro Indy car, which, in red and white, resembles a pack of Marlboro cigarettes.

And R.J. Reynolds sponsors what could be the most recognizable car in motor sports, the Smokin’ Joe Camel for its Camel cigarettes. Bright yellow and blue, the car is driven by Jimmy Spencer and has the cartoon image of Joe Camel on the hood, sporting sun glasses and a black-and-white checkered racing scarf.

Clinton singled out the Joe Camel image as a ploy to lure children to smoking.

“The way the cigarette companies reach children is especially effective,” he said in announcing the proposed restrictions. “They sponsor auto races or tennis matches. The subtle message is that smoking can’t be that bad for you if it’s so intimately involved with sports.”

Detractors warn that if the FDA restrictions reduce sponsorship revenue, fans would suffer.

“When you take away that money overnight, you are taking away the fabric of the sporting culture,” Craig said. “You are taking away what the people want and need.”

The fate of the fan is one of the issues being emphasized by ACESS, the American Coalition of Entertainment and Sports Sponsorship, to which all motor sports governing bodies belong.

“If certain sponsors are not allowed to participate, the cost of providing an event for a spectator increases,” said Walt Czarnecki president of ACESS and executive vice president of Penske Corp., which races Marlboro-sponsored Indy cars. “Sponsors help defray the cost of putting on an event and they make more events possible and therefore the chance for more people to witness the sport.”

Said Dallas Gardner, NHRA president: “The FDA proposal is misguided and harmful to all facets of our sport, especially to the ticket-buying fan. By its very nature, motor racing is expensive for competing teams and race promoters. If admission fees had to foot significantly more of the costs, motor sports could become prohibitively expensive for the average race fan.”

R.J. Reynolds’ Robertson estimates tickets to a NASCAR event would rise from the current average of $51 to as high as $91 if the FDA’s proposal is implemented.

Detractors argue that drivers would also lose. Some could not compete without a series sponsor and the remaining drivers would have to compete for smaller purses. NASCAR Winston Cup drivers face losing the $5.5 million in purse and bonus funds that R.J. Reynolds invests. NHRA drivers could also be hit hard as $2 million of Reynolds’ money might have to be replaced.

Fans and drivers are groaning, and so is the tobacco industry at the thought of losing its most valuable source of advertising.

Because of the reluctance of most sports to align themselves with the industry, it has never been a wide, wide world of sports for the tobacco firms. Motor sports have been the industry’s only link to television since the 1971 federal ban on tobacco advertisements on TV and radio, a link that has produced a plethora of exposure.

Statistics compiled by the Goodyear Tire and Rubber Co. show that more than 14 million people paid to watch big-time auto racing in 1994. Also, all 17 Indy car events will be televised this year, as will the majority of NASCAR events. The FDA’s proposal estimates that the tobacco industry received $68 million worth of exposure for the 354 motor sports broadcasts in 1992.

“Motor sports turned out to be extremely profitable for those companies,” IEG’s Ukman said. “To lose that would be to lose touch with a great deal of their customers.”

Some believe the proposed restrictions would also be taking away a racing tradition.

The Winston Cup, those associated with the sport say, is as much a part of racing as tires and engines.

“My series sponsor is definitely affected,” NASCAR driver Brett Bodine said at Watkins Glen. “I’m upset about the way it affects Winston and R.J. Reynolds because of what they have meant to the sport.”

The tobacco industry also has its hand in other sports. U.S. Tobacco is a major sponsor of Professional Rodeo Cowboy events; R.J. Reynolds sponsors the senior PGA Vantage Championship; and U.S. Tobacco funds tennis’ Virginia Slims Legends Tour. All those events, as well as local venues such as the Coliseum and Sports Arena that have tobacco advertisements that under the proposal would have to be changed, will have to wait and hope that it is still worthwhile for the tobacco industry to foot the bill.

The industry is not letting the decision be made without its objections. All the major companies have already filed lawsuits to stop the restrictions, and they are campaigning hard against the FDA’s claims.

Fans were encouraged to sign petitions at last weekends’ Marlboro 500 in Michigan and NASCAR’s New England Grand Prix. And both the industry and racing officials have been citing a survey done by the Simmons Market Research Bureau that found 97% of NASCAR race spectators to be 18 years of age and older.

“Our fans are adults who have already made the decision to smoke,” Craig said. “Indy car and most racing has a far higher proportion of smokers than other sports. That is why it is attractive to tobacco companies, because they can advertise and try to get them to switch brands. It has nothing to do with the reaching out and influencing younger people to smoke or getting non-smokers to start.”

The FDA and Clinton see it in a different light. They believe the image conveyed to young fans is that smoking is cool--as hip as the Marlboro Man and Smokin’ Joe Camel--and that some children get that idea from motor racing.

“Teen-agers don’t just ‘happen’ to smoke,” Clinton said. “They’re the victims of billions of dollars of marketing and promotional campaigns designed by top psychologists and advertising experts. These campaigns have one inevitable consequence--to start children on a lifetime habit of addiction to tobacco.”

Robertson disagrees. “When you walk around at a Winston Cup event you may see signs that say ‘Chevy--Heartbeat of America’ or ‘Budweiser--The King of Beers,’ but you won’t see signs saying ‘Winston--full rich tobacco flavor,’ ” he said. “It is outside of the events, at the point of sale, where we say to adults who have already decided to smoke, ‘Buy our product because we sponsor your favorite racing series.’ ”

Both the industry and race officials, as well as sponsorship analysts, say this may be the first such restriction. If the name Winston Cup influences children to smoke, then what about the beer companies who seem to play a role in every sport?

“Happens to be tobacco today, could be cheeseburgers tomorrow, and certainly beer tomorrow,” Robertson said.

Said Bodine: “This will be the first domino to fall in a series of dominoes, and we can’t let that happen.”

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Up In Smoke

A proposed Food and Drug Administration ban on tobacco advertising is seen as a major roadblock in the industry’s continued support of motor sports.

The Proposed Ban

Tobacco companies are restricted from sponsoring all sporting events under their product names.

Hats, shirts, golf tees and other such paraphernalia would no longer be permitted if carrying the brand name.

Tobacco companies would be allowed to sponsor cars, boats, etc., but the image on the vehicle would be text only and in black and white print. Also, a description of the product (cigarettes, moist snuff, etc.) would have to be included in text half as big with the phrase “A Nicotine-Delivery Device.”

Contributing to Auto Racing

Estimated contributions of tobacco industry to major motor sports for 1995:

NASCAR: More than $15 million, including $5.5-million Winston Cup purse and bonus funds.

INDY: About $50 million, including Marlboro Grand Prix and Marlboro 500, plus Philip Morris/Marlboro sponsorship of Penske racing team ($7-9 million) and U.S. Tobacco’s sponsorship of team owned by A.J. Foyt

NATIONAL HOT ROD ASSN: More than $10 million, including Winston/R.J. Reynolds $2 million purse and bonus fund.

Note: Figures are all estimates.