Sports Essays – Formula One
Sports Essays – Formula One

Sports Essays – Formula One

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  • Pages: 15 (3929 words)
  • Published: August 26, 2017
  • Type: Research Paper
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This article aims to explore the impact of the European Union's ban on tobacco advertising in Formula One. It begins by evaluating whether tobacco advertising in Formula One is hazardous to health. Next, it compares the steps taken by FIA and Formula One management to enforce the ban with the implementation process of the European Union's ban. Additionally, it examines how Formula One management dealt with potential financial losses resulting from the advertisement ban.

We aim to analyze the political issues relevant to the determinations made by the FIA and also examine the mechanisms they have used to address them. We will then outline the impact of the European Union's ban on tobacco advertising and its effects on Formula One racing. Formula One racing is a popular and captivating sport that is followed by millions of people worldwide.

The text discusses the imm


ense influence of Formula One and its controversial history of advertising tobacco products. For the past 37 years, Formula One has received significant advertising revenue for tobacco products, despite the ethical and health considerations associated with such sponsorship. The relationship between tobacco advertisement and Formula One dates back to 1968 when Gold Leaf sponsored the Lotus 49 racing car in exchange for prominent display of its logo. The car, often referred to as the "fag package on wheels," attracted both negative and positive attention, generating extensive promotion and awareness for the tobacco company. The financial value of the original sponsorship remains unknown, but its promotional significance was tremendous.

This relatively modest beginning marked the start of a 45-year-long dispute that continues to this day and may even be gaining strength currently. The introduction of the

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first black and gold logo on a racing car had far-reaching consequences, leading to the lucrative marketing of various highly valuable assets such as car panels, driver's overalls, and helmets. These developments have played a role in determining the location and timing of Formula One Grand Prix races. Furthermore, this issue has impacted the governments of most participating countries in Formula One, prompting the European Union to pass legislation specifically addressing this problem. While publicly declaring certain positions, Formula One has secretly pursued alternative objectives which have had significant ramifications. In fact, it nearly caused Tony Blair's government to collapse and greatly damaged his reputation and credibility. Extensive literature exists on this subject matter including official European Union documents, academic analysis, as well as numerous viewpoints expressed in newspapers.

In this reappraisal, we will critically analyze a significant portion of it and attempt to analyze all of the main positions that have been taken on the issue. A good starting point is the excellent and comprehensive paper by Dewhirst and Hunter (2002) which is widely acknowledged as an impartial overview of the field. It is referenced by many other papers as an authority. It offers a fairly up-to-date review of the status of tobacco advertising and sponsorship across the entire range of motor sports.

The text discusses the analytical nature of a noteworthy article that explores the role of sponsorship in various aspects. It focuses on the benefits obtained by tobacco companies through their association with sports and advertising, as well as the advantages received by racing teams through financial support. The article also delves into the evolution of Formula One's culture regarding tobacco advertisement, starting from

its inception to the clampdown on advertising through broadcast media and newspapers, and ultimately the gradual reduction in public acceptance of smoking. Additionally, the paper provides a financial analysis of the costs and benefits attained by tobacco companies from their exposure in Formula One. Our article quotes this analysis and acknowledges its well-written and clear content.

In this article, the focus is on a specific aspect of the issue: Marlboro's ability to overcome the effects of the television ban on tobacco advertising. Blum (1991) examines how Marlboro managed to obtain 5933 images or direct verbal references of its logo in a positive context during the 1989 racing season, both in the USA and in Europe.

This text discusses the impact of nationwide exposure on the tobacco industry. Seigel (2001) conducted a study to analyze the consequences of this observation. It was quickly discovered that the tobacco companies were effectively evading the advertising restrictions implemented in different states. As a result, the Master Settlement Agreement was established between the tobacco companies and various media outlets, including television. This agreement was voluntary and limited the tobacco companies' advertising to their 1999 level of exposure.

Seigel’s paper reveals how tobacco companies publicly claimed to adhere to regulations while secretly violating them. It provides detailed examples of instances where these companies made marketing decisions based on economic factors, but disguised them to appear acceptable to the public. Another recent study by Carlyle et al (2004) focuses on the role of British American Tobacco and how they have made Formula One sponsorship their primary method of targeting young men. This study also examines the impact of the Asian markets, which have minimal advertising

regulations, on tobacco companies' marketing strategies. It identifies a new trend where tobacco companies find it profitable to own Formula One brands.

With the acquisition of BAR, British American Tobacco became a major player in the global conflict with governments over public health. The ownership allowed them to control their image and marketing within the region. Kawane (2004) further examines this statement, focusing on the influence of tobacco advertising in the Asian market, particularly Japan. He contrasts this with the public health initiatives implemented in Japan and refers to a new development in advertising.

Japan baccy has sponsored several Mobile dawdlers which it sends to auto race associated locales ( where public smoke is banned in Japan ). These conversationally named "SmoCars" allow tobacco users a oasis where they can smoke lawfully in public topographic points. He remarks on the signifier of give voicing used by the companies to warrant this new going. Japan Tobacco claims that SmoCar has been developed as portion of the company's enterprise for increased coexistence between tobacco users and non-smokers in public spaces. Two documents on really similar topics - the illegal cargo of baccy merchandises to Asia and China - reflect both the direct impact that baccy advertisement has and besides the size of the possible market that there presently is in these states. It shows the less than glamourous side of the statements that we have been showing in this article. Lee, ( et al.2004 ) analysis the impact from 1979 to 2000 when the market place was efficaciously opened to the baccy companies after their ejection in 1950.

Supporting their statements, the authors extensively cite paperss that were filed many

years ago but were only made public after several successful lawsuits in the USA. Collin, et al. (2004) examine another aspect of the same issue, providing an analytical perspective on the clear collaboration between the Chinese Government and tobacco companies.

The survey states that "BAT paperss demonstrate that smuggling has been driven by corporate aims, indicate national steps by which the job can be addressed, and highlight the importance of a coordinated planetary response via WHO’s Framework Convention on Tobacco Control." These documents support points in our main article and are well-written and informative. Hasting & MacFadyen (2000) offer a unique perspective with their article titled "A day in the life of an advertisement man." Despite its light-hearted title, the article provides a serious review of various documents from tobacco industry advertising agencies. It ultimately concludes that voluntary agreements have no value for the tobacco industry except as a temporary smoke screen and that statutory enforcement is the only way to regulate it.

Watson (1997) discusses the European Union's prohibition on tobacco advertisement, tracing its development from initial hopes to a weakened and poorly enforced ban in 2006. The author explores the various factors hindering the implementation of the prohibition and highlights the challenge of creating effective legislation across all member states while respecting those with existing complete bans on tobacco advertising.

In countries where a complete advertising ban has been successfully implemented, per capita consumption of tobacco products has decreased by 14-37%, as compelling evidence presents. The legal aspects of the EU's tobacco advertising ban are examined in a detailed paper published in the European Journal of Law and Economics.

This analysis remains relevant as it delves into

the consequences following a European Union Court ruling that determined the EU lacked authority to impose a complete ban due to opposing national legislation.

The text supports the sovereignty of individual states in regulating economic activity. It suggests highlighting an article by Chapman (2002) in the Literary Review. The author discusses the unspoken contradiction in beliefs and starts with an example of Jacques Villeneuve's car causing a fatal accident during the 2001 Melbourne Grand Prix. The writer mentions the extensive investigation conducted, including an international review team and media coverage, raising concerns about the safety of the 2002 race. The main objectives of this article can be summarized concisely.

We are analyzing the effects of the European directive on censoring tobacco advertisement and associated sponsorship in Formula One. Our examination of literature in the country has yielded pertinent information for our investigation. We will utilize this, along with other sources, to explore the motivations behind our inquiry. Our objective is to recognize the different issues involved, including whether Formula One tobacco advertisement presents an actual or perceived risk to public health. Furthermore, we will assess the financial ramifications and political outcomes of these determinations.

We will examine the history and evolution of the European Union's tobacco advertising ban and its impact on Formula One.

Does advertising on Formula One cars pose a genuine threat to Public Health?

In recent decades, there has been extensive debate surrounding the potential health risks associated with smoking. However, it is important to consider relevant factors. Over the years, smoking trends have significantly fluctuated, with a 40% decrease in smoking prevalence for the general population since 1960 (CDC 1993). In the UK, this declining

trend has stabilized over the past 15 years.

(Dobson et al., 1998) There has been a significant increase in cigarette consumption among adolescents and young adults (Nelson et al., 1995) (NCHS, 1995), which is important to recognize.

Among individuals aged 20-24 years, the highest prevalence of tobacco users is observed, with 42% of males and 39% of females reporting regular smoking (NCHS 1995). Other studies consistently confirm these findings, strengthening our confidence in their accuracy. Smoking rates typically reach their peak at age 21 (Paavola et al 2004), while the highest alcohol consumption tends to occur around age 28. These results will be further discussed later.

According to the survey, a noteworthy finding is the correlation between smoking rates and frequent television viewing. This may be attributed to the regular broadcast of Formula One racing on TV channels. Another research conducted by Van Den Bree (2004) revealed that teenagers are more inclined to smoke and drink if their peers approve of these behaviors. It is undeniable that Formula One racing has aspirational qualities, reminiscent of young people aspiring to become train drivers half a century ago.

The notion can be made that racing drivers now possess a comparable esteemed position, being viewed as glamorous, skilled, and noble in their chosen field - attributes typically valued by their peers. The purpose of this section is to establish grounds for the argument that tobacco companies jeopardize public health by supporting Formula One. There is minimal uncertainty that young adults (the largest group of smokers) and teenagers (the most vulnerable group) are the two most crucial and potentially lucrative targets for tobacco companies in their advertising endeavors. This has been clearly evidenced

in notable instances in the USA, which led to the disclosure of numerous tobacco company documents to the general public.

( Phelps 1998 ) ( Schwartz 1998 ) both confirmed that tobacco companies were intentionally targeting the young adult and adolescent market to build brand loyalty, using Formula One as a suitable medium ( For reasons already outlined ).

Significance of Younger Adult Smokers

So, why are younger adult smokers important to RJR? Younger adult smokers are the only source of replacing tobacco users. Surveys conducted by the government ( Appendix B ) have consistently shown that: ? Less than one-third of smokers ( 31 percent ) start after turning 18. ? Only 5 percent of smokers start after reaching age 24. This means that the smoking behavior of today's younger adults will largely determine the industry volume trend in the coming decades.

If young adults stop smoking, the tobacco industry will suffer because a population that does not have new smokers will eventually decrease in numbers. To maintain a positive sales trend, Reynolds Johnson (RJR) would need to achieve substantial market share gains or significantly increase prices, even though this may result in reduced sales volume (Schwartz 1998). The entire focus of RJR's advertising efforts is clearly aimed at the young adult population, which is most represented at Formula One events. Therefore, sponsorship of Formula One is a crucial asset for the tobacco advertising industry (Phelps 1998). The primary purpose of attaching tobacco advertisements to Formula One is to enhance brand awareness, reinforce the brand's image, and hopefully increase market

share. By associating the particular tobacco product with the glamourous and exciting image of Formula One described above, it is expected that consumers will perceive the product as "Cool, glamorous and exciting" (Cornwell et al 1998) (Irwin et al).

In 1994, the FIA (World Motor Sport Council) commissioned a study in December 1998 to examine the reasons behind tobacco companies' relentless pursuit of recruiting young smokers. According to the findings, tobacco companies had an obsessive need to attract a large number of new smokers, including underage individuals, to meet market demands. In the UK alone, they required 300 new smokers every day. For decades, tobacco companies targeted young people, including those too young to legally buy their products. Market research conducted by these companies focused on teenagers, some as young as 12 or even as young as five years old. Studies revealed that most smokers start using tobacco during their teenage years. Few people start smoking in their mid-twenties. However, those who started smoking around ages 12 or 13 often expressed a desire to quit by the age of 16 due to concerns about the negative impact of smoking on their athletic performance.The tobacco companies sought to attract and addict kids to cigarettes at a young age, while their desire to quit is still weak. They did this by engaging in sponsorship deals with sports, in order to minimize any concerns about the health risks of smoking. It was known that brand preferences are established during the early teenage years, and increased exposure to tobacco products can influence these preferences. The sponsorship of Formula One racing is considered the most valuable for tobacco companies, as it

is a highly successful and glamorous global event that has the potential to reach young people through televised events and associated merchandise. This evidence clearly indicates that promoting their products to young people is advantageous for tobacco companies, as they are more susceptible to their advertising and likely to continue smoking once they start.

Their strategy is to promote smoking as an acceptable interest, supported by glamorous high-profile athletes who effectively counter the numerous and opposing messages that smoking is detrimental to athletic performance. There is further evidence to support this claim. According to a study on teenage boys (Smee 1992), those who identified Formula One as their favorite televised sport were more inclined to choose Marlborough and Camel cigarettes (brands associated with Formula One) compared to other brands. These boys were also more likely to start smoking within the following year (Andrews; Franke 1991). The same study revealed that among 12-13-year-old boys in the UK, only 7% smoked, but this percentage increased to 13% for those who cited Formula One as their favorite sport.

Additionally, several important retrospective studies have examined the impact of removing tobacco advertising in France, New Zealand, Finland, and Germany from 1975 to 1993. These studies revealed a decrease in cigarette consumption (per capita) ranging from 14 - 37%. Based on the evidence presented thus far, it is reasonable to conclude that tobacco advertising associated with Formula One racing poses a threat to public health. This type of advertising appeals to young people who may wish to imitate their peers and appear "cool, sophisticated, and glamorous," which is precisely the message tobacco advertising aims to convey by linking itself with the "cool,

sophisticated, and glamorous" sport of Formula One motor racing. There is no doubt that tobacco smoking is a major health obstacle. Therefore, it is clear that the current policy pursued by Formula One has a harmful impact on global public health.

How much money is involved?

The issue of Formula One advertising only gained public concern and sparked debate when the banning of tobacco advertising on terrestrial television became an issue.

In 1965, this occurred in the UK, in 1971 in the USA, and in 1972 in Canada. Since then, it has occurred in most western states. However, it is important to note that a significant proportion of the far east still does not have any effective restrictions on tobacco advertisements in various media forms. As a result, tobacco advertisers had to find alternative methods for promoting their products. They turned to sponsoring major sporting events that would be broadcasted. (Ledwith 1984) (Stoner 1992).

Formula One holds a virtual monopoly over the global broadcast rights to their races, allowing them to control what and how the general public views their events. According to a survey conducted on the topic, Marlboro was able to secure approximately 3.5 hours of prominent exposure during the 15 races of the 1989 Formula One season. This same study revealed that Marlboro's name appeared or was mentioned 5933 times during that season. In comparison, tobacco companies collectively achieved 169 hours of advertising exposure in the United States alone between 1997 and 1999, amounting to around $411 million in advertising value. It is worth mentioning that tobacco companies are not usually the sole sponsors of teams or events.

The high costs of running Formula One teams in

2001 are significant. Ferrari spent $284.4 million, McLaren spent $274.6 million, and BAR Honda spent $194.5 million (Formula 1 Magazine 2001). The breakdown of expenses is more challenging to quantify, but an estimate suggests that Philip Morris (Marlboro) spent $23 million on Michael Schumacher's salary and an additional $65 million for the privilege of having their logo strategically placed on the car, drivers' overalls, and helmets (Saward 2001) (Donaldson 2001). Similar amounts were invested by other teams' sponsors. Reemtsma (West) sponsored the McLaren team with $37 million for prominent branding (Saward 2001). British American Tobacco, the main sponsor of BAR, invested approximately $47 million in the 2000 season (Donaldson 2001). The total amount of tobacco sponsorship money in Formula One in 2000 was estimated to be $250 million (Grange 2001). However, tobacco advertisers value not only race-day exposure but also visibility through "third party" images and co-sponsors. The presence of other high-prestige products alongside tobacco further enhances the prestige of the tobacco product.

An authoritative example of this occurred when Philip Morris (Tobacco) co-sponsored a Formula One team with TAG Heuer watches, providing timekeeping at Formula One races. TAG Heuer placed numerous newspaper and poster advertisements, featuring the Philip Morris logo on the Formula One car. This would be prohibited if it were advertising tobacco, but since it claims to advertise watches, it circumvents this particular restriction. Similarly, Benson & Hedges also sponsors the Honda BAR and Jordan teams, gaining significant visibility through Honda advertising. This type of relationship carries risks from a Public Relations standpoint, both for the co-sponsors and the Formula One racing teams. If we consider the impact that the withdrawal of tobacco

advertisement revenue would have on Formula One, we should examine the recent case of TAG Heuer and Reemtsma (manufacturers of West cigarettes), which did no one any favors.

In June 2001, the French newspaper Le Monde criticized TAG Heuer for a Formula One advertisement that prominently featured the West logo on a saccharide. TAG Heuer was accused of violating French laws regarding tobacco advertising. However, TAG Heuer defended itself by arguing that as an official sponsor of McLaren, it was contractually obligated to use official team images. This situation did not provide favorable publicity for any of the parties involved, including TAG Heuer, West, or Formula One. Although the financial impact of tobacco advertising on Formula One racing is evident from these figures, we have not yet considered the opposing argument.

The sponsorship agreement establishes a specific period of time and a set fee for a sponsor. However, these agreements also require sponsors to incorporate the racing team's images and other visuals into any promotional materials that associate them with the sport. This aspect, which is not widely publicized, is another consequence of ending tobacco advertising sponsorship in Formula One. It is interesting that renowned brands like Hewlett-Packard and TAG Heuer are bound by sponsorship agreements with products that may not seem to align with their brand image. The significance of tobacco advertising for Formula One, or conversely, the importance of Formula One for tobacco advertising, cannot be underestimated.

When one takes into account the vast amount of money involved, it becomes clear just how much trouble Formula One would face if tobacco advertisers were no longer allowed to sponsor the industry. Despite their public statements, the significant

financial loss that would occur if Formula One voluntarily distanced itself from the tobacco industry is starting to be understood.

The development of the current tobacco prohibition by the European Union

The European Union's Directive on the prohibition of tobacco advertising in print, radio advertising, and event sponsorship by tobacco companies will go into effect on July 31st, 2005. This directive has been the result of a prolonged and complex campaign from various sources and has many potential implications for both the sport of Formula One and its followers. Let's highlight some important events in the development of this directive. The directive was first published in 1997 with the intention of being enforced in 2005. In November 1997, Health Secretary Frank Dobson stated on Radio during an interview with John Humphries that the government would ban all sports sponsorship by tobacco companies. In March 1998, at the Australian Grand Prix, the FIA announced that it would ban tobacco advertising starting from 2002.

Four years before the European Union's ban on tobacco advertisement became mandatory, the FIA released a statement known as the Melbourne Declaration. This statement was in response to media pressure following the announcement of the ban. The Melbourne Declaration stated that if evidence of a direct connection between tobacco advertisement/sponsorship and smoking was provided, Formula One would take steps to eliminate tobacco advertisement/sponsorship.

The FIA discussed and expressed its intention to responsibly consider the issues presented to them by the British Government and other agencies. They mentioned their ongoing discussions with the World Health Organization (Hills 1996). They also highlighted that they had set the date of 2002, which coincided with the termination of the Concorde Agreement

between the teams and the FIA. Additionally, they emphasized that any ban on tobacco advertising would apply to all Grands Prix, regardless of whether they were in the European Community or not. In response to pressure from various governments and advocacy groups, Mr. Max Mosley, Chairman of the FIA, published another document at a press conference during the Monaco Grand Prix in May 1998. This document outlined the proposed process for examining the evidence. Some may argue that the FIA was trying to delay the decision, as there seems to be a weakening of their Melbourne Declaration, replacing the date of 2002 with a reference to the European Union's ban on tobacco advertising in 2006.

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