Tobacco ad bans could put auto racing in the pits
In many ways, Montreal hosted a typical Grand Prix Formula 1 race last weekend. Some 317,000 fans poured into the Circuit Gilles-Villeneuve to watch the world's best drivers handle the world's fastest cars. The temperatures soared, the engines roared, and Germany's Michael Schumacher, ranked No. 1 in the world, took the checkered flag.
But something was very different. Instead of "Lucky Strike" on its cars, Honda displayed its team logo and the words "Look Right." In place of "Marlboro," Ferrari painted huge blocks of white over the deep red car bodies. And instead of the words "Benson" and "Hedges" on its cars, the Jordan-Ford team blanked out certain letters to spell "Be on edge."
Unlike most of the 18 Grand Prix races around the world this year, tobacco advertising was conspicuously absent in Montreal.
Formula 1 costs each of the 10 teams anywhere between $40 million (team Minardi's budget) and $400 million (Ferrari's budget) annually, and tobacco companies have been heavily subsidizing several teams since the late 1960s. Though exact numbers are not known, estimates put annual payments at about $415 million. Canada's recent ban on tobacco advertising threatened to keep the Grand Prix from stopping through Montreal this year.
In the end, after much haggling between Bernie Ecclestone, who owns the commercial rights for the sport, and city officials, the event - which pumps $58 million into Montreal's economy - proceeded without big tobacco, costing each team unreported sums and the government $8.7 million.
Canada is the latest country to ban tobacco from Formula 1 races, following Britain, France, and Austria. If the trend continues, and as the European Union's scheduled 2005 ban on all tobacco advertising nears, observers say the sport will need to find other sponsors with deep pockets or it could quickly face a financial crisis.
"The teams can't afford to pay the huge prices [that come with touring] if they don't get their sponsors," says Chris Economaki, editor of National Speed Sport News and a racing analyst for 50 years. "Formula 1 is unique in that there is only one race a year in each country, Italy [and Germany] being the exception. So it's a very important sporting event in every country it visits."
In several countries - Belgium, Austria, and the US, for instance - advertising at races is being banned or severely limited. Even the French Grand Prix in Magny-Cours will host its race in July without any tobacco sponsorship.
Tobacco advertising will be limited at the US Grand Prix in Indianapolis this weekend. The 1998 tobacco settlement with states' attorneys-general permits only one sports sponsorship per tobacco brand. Teams like Ferrari, whose Philip Morris backers are already involved with a team in the Indy Racing League, will appear without tobacco logos.
Some of the teams themselves have begun to look for money elsewhere. BMW-Williams emblazons drugmaker Glaxo SmithKline's NiQuitin smoking-cessation patch on its cars and jerseys.
While many applaud minimizing tobacco advertising, others worry that the sport will not be able to survive a complete ban. Tobacco is the major sponsor for half of the sport's teams, four of which are title sponsors. Honda, for instance, is called Lucky Strike BAR Honda, and Renault is called Mild Seven Renault F1.
The World Health Organization condemned the sport in 1996, calling it a "nonstop commercial" for cigarettes. It even called for a global ban on the broadcasting of tobacco advertising "masquerading" as sports sponsorship. And the EU, which first considered such a step in 1990, is set to impose a complete ban by the end of 2005.
Not to be deterred, Mr. Ecclestone is already taking the sport to countries where tobacco sponsorship is not an issue. The two newest tracks are in China and Bahrain. And yet those countries pose their own challenges for officials. In Bahrain, there was no traditional spraying of champagne from the winner's podium, and there is already talk of a ban on trackside tobacco ads in Shanghai for September's race.
But Mr. Economaki says that losing giant sums from tobacco companies would actually help the sport. "Historically, racing drivers won races," he says. "Now, with all the money pumped in, the cars win the races. No matter how good a driver you are, there's nothing you can do about it."