NON-TOBACCO SPONSORS COULD FILL MOTOR VOID;NASCAR POPULARITY EXPANDING, LIKELY TO MAKE UP $50 MILLION HIT

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Although the motorsport industry is publicly fuming about the proposed Food & Drug Administration regulations on the marketing of tobacco, it probably can survive any loss of cigarette sponsorships.

NASCAR SEES GAINS

Nascar, for one, has seen gains in non-tobacco sponsors. A plethora of marketers, drawn by the sport's growing throng of passionate and sponsor-appreciative fans, are becoming official Nascar sponsors or underwriting teams.

The past year has seen many high-tech/communications companies join Nascar as team or official status sponsors, including Hayes Microcomputer Products' modems, Primestar and Prodigy. Even Turner Broadcasting System's Cartoon Network sponsors a car.

NASCAR NUMBERS UP

Attendance at Nascar races jumped 47% last year, to 10 million, and TV viewership was up 23% from 1994, to 120 million combined viewers in 83 events. Nascar and its various racing teams will see licensing revenues jump from $650 million in 1995 to about $1 billion for 1996.

But R.J. Reynolds Tobacco Co. and Philip Morris USA are longtime racing sponsors, and racing industry executives are fretting over the fate of smaller race venues.

"It's the smaller tracks supported by tobacco, located in smaller markets that aren't as attractive to another marketer, that are going to take the hit," said Dave Jacobson, editor of IEG Sponsorship Report.

More than $50 million is spent each year on motorsports by the two tobacco giants.

According to IEG Sponsorship Report, RJR-through its Sports Marketing Enterprises-spends $33.4 million on motorsports, including title sponsorships to the Winston Cup stock-car racing series and the National Hot Rod Association's Winston Drag Racing Series. Philip Morris spends $18.3 million on Marlboro's support of IndyCar teams and events.

ARENAS AT RISK

The FDA regulations also would affect the professional billiards tour, sponsored by RJR's Camel, and RJR's various powerboat sponsorships. Also at risk are a slew of stadium and arena signage deals, even though an increasing number of venues are beginning to refuse such deals or are now prohibited by local ordinances from doing business with tobacco companies.

But motorsports get the most money. Through its new political action group, The American Motosports Public Affairs Council, the industry has responded by announcing it intends to build grass-roots support for federal legislation that would exempt motorsports from the FDA marketing regulations.

LITIGATION LIKELY

The likelihood of drawn-out litigation over the regulations will delay the impact for a few years.

Although racing associations for the most part have declined to comment definitively on the new regulations' effects, some in the racing business believe their industry should support their long-time tobacco sponsors.

"Would it be catastrophic for Nascar if Winston went away? No, it wouldn't," said John Story, director of public relations for Daytona International Speedway. "But that doesn't mean we aren't going to fight."

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