The Justice Department last week sued Philip Morris USA, accusing the tobacco giant of illegally advertising on TV through stadium signage, and then immediately settled the case with Philip Morris' agreement to move the signs to areas less conspicuous to TV cameras.
Tobacco critics said racing is the next target and expressed anger it wasn't included in the agreement.
"Auto racing has been allowed to go scot-free," said Alan Blum, founder of Doctors Ought to Care. The group promised to push for action against racing next.
A Philip Morris spokeswoman noted racing "was not at issue" in last week's agreement, adding, "There are no implications at all for racing. It is very different."
Eugene Thirolf, director of the Justice Department's Office of Consumer Litigation, was less certain.
"This does not preclude us from getting into any other venue," he said.
Both Philip Morris and R.J. Reynolds Tobacco Co. are heavy sponsors of race cars or events, with combined spending that may top $30 million.
Philip Morris sponsors the Penske Team and has two Indy cars with Marl-boro colors and logos. RJR sponsors the Nascar Winston Cup series and also some cars. In addition, the marketer sponsors the Nascar Winston Cup Series, a Camel car and offers $3.5 million in prizes to top drivers.
"Any time this topic comes up, we obviously take great interest because of our affiliation with a tobacco company. We're looking at the issue," said Kevin Triplett, media coordinator for Nascar. So far, he said, the association hasn't been contacted by the Justice Department.
Mr. Triplett contended Nascar's sponsorship of the racing series doesn't constitute Winston TV advertising because the signage that does get TV play is a graphic specific to the Nascar Winston Cup Series, not the brand.
Eric Wright, VP of Joyce Julius & Associates' Sponsors Report, Detroit, said that based on his company's examination of TV tapes, Philip Morris and RJR last year got nearly $40 million in free TV time from their auto racing sponsorships.
Mr. Wright said his company compares announcer mentions and TV display of company logos on cars or stadium signage with the cost of commercials in the individual telecasts.
Not included is the benefit of less prominent displays like the appearance of a red and white Marlboro car with blurred logo spinning around the track.
A spokesman for Championship Auto Racing Teams (IndyCar) had no comment other than IndyCar was aware of the Justice Department's action and was reviewing it.
The racing industry has formed A Coalition for Entertainment in Sports Sponsorship to research efforts by government agencies and other organizations that support the banning of cigarette companies from the sport.
Both Philip Morris and the government prosecutor described the suit filed in U.S. District Court in Washington as about signs in baseball, football and basketball arenas. The two sides had been in negotiations for several months. Philip Morris earlier settled a case involving Madison Square Garden.
"We have tried in expressing this to send a message to a whole range of arenas, to tobacco manufacturers and to broadcasters, that this statute is there and needs to be paid some attention to," Mr. Thirolf said.
He said the Justice Department filed the suit because it felt tobacco companies were using stadium signage to get around the ban on TV tobacco advertising enacted in 1971, and noted signage at basketball stadium scorers tables and on football stadium end zones wound up being on TV for long periods.
"If you look at the pictures and the way they come on television .... if the signs weren't placed that way, the odds of coincidence are mind boggling," he said.
Philip Morris said it settled the case because it viewed the stadium signage as being aimed at fans attending games and felt the advertising could still reach those fans by being in positions less noticeable to TV cameras. The company, however denied it was violating the law, saying similar signs had been in existence before the law was passed and had never before been challenged.
Advertising groups were quick to criticize the Justice Department's action.
"One would hope that Justice has more important things to do," said Hal Shoup, exec VP at the American Association of Advertising Agencies. "Apparently they don't and feel it is a high priority. We are not troubled by Philip Morris filing a consent decree but by the vagueness in the definition of what constitutes broadcast advertising."