Backseat Blonde - We May Cheer Beer, But Will Liquor be Quicker?

November 10, 2004
Fans May Cheer Beer, But Could Liquor be Quicker?
By Allison Wagda

Beer’s semi-monopolistic grasp on the NASCAR circuit
ended today as stock car racing’s governing body ruled
in favor of allowing hard liquor sponsorships in the
sport.

Within hours, premium liquor company Diageo, (makers
of premium liquors such as Bailey's, Guinness, Smirnoff,
Crown Royal, Captain Morgan, Johnny Walker, and
Seagrams), announced it would participate in NASCAR's premier series in 2005 with
Roush Racing, although specifics of the sponsorship relationship were not
disclosed.

“Spirits companies are recognized as leaders in
responsibility and are encouraging adults who choose
to drink, to do so responsibly,” said Mike Helton, president of NASCAR, in a
teleconference with reporters this morning. “We are confident that the spirits
companies entering our sport will come to apply that same level of responsibility to
their involvement in NASCAR, and will communicate the same responsible
marketing and messages that beer companies have exhibited in the sport for the
past 25 years.”

The decision further fueled rumors of impending announcements by Richard
Childress Racing and Roush Racing. Both teams have been in discussions with
distilled spirits companies to sponsor race cars.

The move shouldn’t come as a big surprise to anyone, as NASCAR’s roots are
steeped in moonshine. Yet the victory was hardly a walk in the park for liquor
companies and the teams hoping to benefit from their deep pockets.

This past January, the official stance from NASCAR seemed concrete when NASCAR
spokesperson Jim Hunter said, “We've always felt like it would be detrimental to the
sport to allow hard-liquor advertising.”

Then, in June, NASCAR rejected a sponsorship deal for Jeff Burton (then driver of the
#99 for Roush Racing) with Diageo. But comments from NASCAR President Mike
Helton at the time indicated the organization was continuing internal discussions
about hard liquor sponsorships for the future - the first serious sign NASCAR’s policy
could change.

Soon after, NASCAR faced charges of hypocrisy from fans (including yours truly)
when the organization’s sister company, International Speedway Corp. (Nasdaq:
ISCA), signed Crown Royal to a sponsorship deal as the “Official Whiskey” of
Daytona International Speedway. Why was it okay for a liquor company to market to
fans at the track and not those safely ensconced at home in front of their TV?

The answer, in my opinion, ended up being two-fold. NASCAR has been
implementing change after change this season to make the sport more entertaining
and family friendly. Obvious aggression on the track has been heavily discouraged,
and the accidental cuss word uttered in a TV interview, once overlooked, has
become a serious infraction. By allowing hard liquor, NASCAR doesn’t quite appeal
to those soccer moms.

NASCAR also had to gain approval from its broadcast partners, most notably FOX
and NBC. According to Helton this morning, how cars will be shown on TV will
remain up to the networks.

Despite the widespread belief to the contrary, the federal government has never
actually banned hard liquor advertising on TV. The distillers themselves observed a
voluntary ban for more than 50 years. But by 1996, they ended their self-imposed
exile from the airwaves and appealed to the television industry to allow responsible
hard liquor advertising. The distillers were battling for market share with beer and
wine companies, both high-profile television advertisers, and needed a new medium
to promote their products.

A few cable networks began accepting the ads, but with the economy prosperous,
the networks continued to refuse their ads with the exception of malt liquors like
Smirnoff Ice and pre-mixed drinks like Bacardi Coolers.

In 2001, facing a declining economy and reeling from the sudden loss of marketing
revenue produced by the dot-com industry, NBC became the first network to accept
liquor ads. Soon after, they reversed their decision due to mounting pressure from
advocacy groups.

So, one of NASCAR’s primary broadcast partners had already been burned by this
issue. I would imagine they were reluctant to agree to re-enter that fray, even in the
form of a sport’s sponsorship.

And there is a very real possibility NASCAR, NBC and FOX could face a barrage of
negative publicity over this decision.

With costs rising exponentially for teams and the power in the sponsorship struggle
firmly in the hands of the sponsors due to the slow economy, teams are in desperate
need of a new market segment to tap. Liquor makes sense.

Despite the “family-friendly” image, NASCAR’s fans are primarily adults. Actually,
approximately 90% are over age 25, well above the legal drinking age. Beer and wine
cause the same societal problems. The sport already shamelessly plugs male
enhancement drugs, casinos, and potentially addictive depression drugs. Since
these cars often run side-by-side with Sponge Bob, Bugs Bunny and Wonder
Woman, I don’t see how hard liquor is any worse.

And lest we all forget so soon, tobacco made the sport what it is today.

Helton also pointed out the distilled spirits companies will face strict guidelines
determined by NASCAR, even more so than the beer companies. The rationale? The
beer companies have already proven themselves responsible partners.

Yesterday, in anticipation of a possible announcement, Burton told reporters, “It's my
opinion that we live in an environment today that alcohol is out there, it's not hidden.
Responsible advertising is perfectly acceptable with alcohol. I do believe, though,
that the alcohol companies should go the extra mile to represent their product for
what it is, that's a quality product, but also a product that does have some dangers to
it.”

Since NASCAR sealed off any possible future telecom/wireless deals for teams with
an exclusivity contracts when it signed title sponsor Nextel, something had to be
done to keep teams competitive.

NASCAR, at this time, has determined they will not have a liquor company as a
corporate sponsor of the sport. The announcement applies to individual teams
hoping to secure financial backing from the industry.

In January, IROC announced a three-year title sponsorship deal with Crown Royal,
with little hoopla or discord. With NASCAR being the first major U.S. sport to permit
hard liquor sponsorships, the controversy surrounding the decision could be intense.

In order to try to stem a potential firestorm of negativity, NASCAR did conduct
discussions with organizations like Mothers Against Drunk Driving (MADD) and the
National Commission Against Drunk Driving in its due diligence. Additionally,
NASCAR reached out to industry groups such as the Distilled Spirits Council of the
United States (DISCUS) and The Century Council. NASCAR based its guidelines on
the input received from these groups.

Regardless, it is certain that some extremist advocacy groups will make a lot of
noise over this announcement. But it is a reasonable decision by NASCAR – fair to
liquor companies looking to compete against other alcoholic beverage companies
and necessary for teams looking to survive a difficult economy.

Have a comment? Post it in our new forum!

© Copyright 2004 BackseatBlonde.com. All Rights Reserved, Any copying, redistribution or
retransmission of any of the contents of this service without the express written consent of
BackseatBlonde.com is expressly prohibited.