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News
Tobacco regulation fallout
August 23, 1996: 7:41 p.m. ET

President's decision could mean new rules for the advertising industry
From Correspondent Sean Callebs
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NEW YORK (CNNfn) - President Clinton's decision to declare nicotine an addictive drug drew swift opposition from an industry that could be hard hit by the decision: advertising.
     At a Washington news conference Friday, industry leaders called the action unconstitutional and promised an aggressive fight in court.
     One of the many places that tobacco advertising is prominent is at NASCAR stock car races. RJ Reynolds sponsors the Winston Cup, the crown jewel of the sport's top racing circuit. Ad executives say RJR pumps at least $10 million annually into the sport.
     The president's proposal would slam the brakes on tobacco sponsorship at all sporting events. It would also end associated marketing of brand names on hats, shirts and other apparel.
     Tobacco companies turned to sponsoring televised sporting events after commercials were banned from television in 1971. Sponsoring popular events gave the companies a way to still get their names out to a large number of people.
     Jim Andrews, vice president of International Events Group, said sponsoring sporting events gave tobacco companies a way to maneuver around the ban.
     "This gives them brand exposure to a large segment of their target audience and then continuous exposure during the races on their broadcast on major networks and cable networks. So it's been a way for them to, in some ways, get around the advertising ban on tobacco," he said.
     Advertisers and tobacco companies are already planning stiff court challenges to the election year assault on tobacco.
     Hal Shoup of the American Association of Advertising Agencies, said the president's decision could have an enormous and widespread impact on his industry. (134K WAV) or (134K AIFF)
     Ad companies say jobs and business opportunities would be eliminated. Slick color ads in magazines would go away and be replaced by black and white text-only messages which the government hopes will be less appealing to young people.
     Also, any billboards within 1,000 feet of a school would have to come down.
     Washington is taking the matter so seriously that the Justice Department is trying to corral the Marlboro Man high atop the Atlanta Braves' baseball stadium to keep the symbol from winding up in television shots.
     Attacks on tobacco are nothing new. The government has considered cracking down on the industry before and backed off. But if this push succeeds, by one industry estimate, it could chop some $600 million from tobacco's $6 billion a year marketing budget.Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.