TCS Daily

A Grand Shame

By John Spiridakis - August 18, 2003 12:00 AM

Next June, for the first time in over 25 years, there will be no Canadian Grand Prix in Montreal. While the 2004 Formula One calendar will not be officially released until October, race organizers in Canada were notified in a letter last week from the promoters of the sport, Formula One Management (FOM), that "pending the outcome of various issues," the annual auto race which attracts over 300,000 fans over 3-days, will not be held.


The initial two-paragraph letter did not explicitly detail which "issues" have lead to the cancellation, leading to much speculation. However according to statements made last week by the head of FOM, Bernie Ecclestone, it is now clear that the 1997 federal anti-tobacco advertising legislation is to blame.


When the law was passed in 1997, the Canadian Grand Prix was granted a six-year grace period before the strict ban on tobacco advertising at sporting events would be enforced. The deadline for this reprieve is October 1 of this year. The Formula One teams have agreed to a self-imposed ban on tobacco advertising, effective 2006. Yet, with few exceptions, the teams refuse to race in countries with bans currently in place. Most of the newer Grands Prix on the calendar are being organized in countries such as China and Bahrain, where tobacco advertising is not an issue.


The news of the demise of their largest tourist event has hit Les Montréalais hard. The French-Canadian city relies heavily on tourism and along with a horde of race fans, the annual Grand Prix brings in an estimated US$60 million of revenue. The event has traditionally been one of the most popular on the 17-race calendar and receives large support from European advertisers, as it is one of the few throughout the season to air during prime time in Europe, home to a majority of the sport's fan-base.


Predictably, there has been a huge outcry from local businesses leaders who have quickly organized themselves into a group called the Coalition for the Preservation of the Canadian Grand Prix. They have already begun planning and staging public demonstrations, demanding a relaxation of the anti-tobacco law. Specifically there are calls for an annual 3-day exemption from the law for the race, modeled after the work-around that Australia has devised for its Grand Prix under similar circumstances.


Pressure has also begun mounting on the Canadian political leadership to act. So far many provincial and federal leaders, including Canadian Prime Minister Jean Chrétien himself have waded into the debate, vowing to save the race. However they have explicitly ruled out any changes or exemptions to the law to make it happen. Representatives from Ottawa and Quebec, as well as government, business and tourism representatives, will be traveling to the Hungarian Grand Prix in Budapest next week to directly lobby the teams and sponsors for support. As it is the teams that are the direct beneficiaries of the tobacco sponsorship money, the representatives face an uphill struggle.


Fully half of the ten teams on this year's grid are sponsored by tobacco brands. For example Ferrari's two high-profile cars, one driven by the 5-time world champion Michael Schumacher, run a red livery emblazoned with large advertisements for Altria Group's Marlboro cigarettes. In fact, the team's official name is "Scuderia Ferrari Marlboro."  Multi-year deals between top teams such as Ferrari and their tobacco sponsors can run well into the hundreds of millions of dollars. Formula One's constant technological innovations as well as its ultra-competitiveness come at a hefty price. Annual budgets for the top teams can be well in excess of US$400 million and these tobacco deals have become an indispensable lifeblood for them. The recent global advertising recession has only heightened their importance.


Formula One Management's sudden cancellation of a Grand Prix is not without precedent. Belgium found itself in a similar situation in 2002 after unilaterally pressing forward with a tobacco-advertising ban of its own, a full three years ahead of the self-imposed 2005 EU ban. Faced with the reality of the cancellation of the 80-year old Belgian GP, Brussels was successfully pressured into easing restrictions and the race will once again be run in 2004.


Prime Minister Chrétien's current refusal to entertain any suggestions that the Canadian law will be amended makes it unlikely that such an easy solution will be found for Montreal. News of early unwillingness by Ottawa to do what is necessary to save the Canadian Grand Prix surely will not be taken well by the local business leaders who are desperate for a compromise to save the event. It is their hope that Ottawa will realize that the need to enforce existing law must be balanced their right to earn a livelihood.


The author is a writer living in Boston and winner last March of the Driscoll 500 race at F1 Boston. 


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