State AGs Claim Reynolds, NASCAR violate 1998 Settlemetn

State AGs Claim Reynolds, NASCAR Violate 1998 Settlement

Argue that signage at tracks are breach of the 'event' clause

New York, May 2, 2001 -- Attorney generals in four states have brought separate suits against R. J. Reynolds Tobacco Co. for violating a clause in the 1998 tobacco settlement with state governments. They claim the company's year-round signage at race tracks around the country is in violation of the settlement.

At issue is a clause in the settlement, which dictates tobacco companies can post outdoor advertising 90 days before and 10 days after a sponsored motor-sports event. The definition of what constitutes an event is at the middle of the argument. According to the attorney generals of California, Arizona, New York and Washington, a single Winston Cup Race is an event. R. J. Reynolds defines their sponsorship as the entire NASCAR Winston Cup and NHRA Winston Drag Racing series. The series runs from February to November, with their signage placed permanently on the race tracks. If it is determined that an event is defined as a single Winston Cup Race, then the company is in violation of the settlement and could cause the company to reconsider its relationship with NASCAR and NHRA. The company has invested approximately $40 million a year into the sport of racing.

Additionally, the 1998 tobacco settlement limits manufactures to one brand sponsor after 2001. This too could effect the thirty-year-old relationship between R. J. Reynolds and NASCAR. Currently, the company sponsors NASCAR, NHRA Drag Racing Series and golf's Vantage Championship.

At this time, there has not been any reported agreement or settlement of the issue. Also, R. J. Reynolds has not made a decision regarding its future sponsorship agreements.

Sources:

Fish, M. "No smoke screen." CNNSI.com April 25, 2001.

Fish, M. "What's in a name?" CNNSI.com April 25, 2001.

Charlene Wilson