Events going up in smoke?

Sometimes the doomsayers are right....

Sometimes the doomsayers are right.

Ever since the federal government passed its controversial Bill C-71 – legislation that severely restricts the sponsorship marketing activities of tobacco companies – critics have warned of potentially dire consequences for many major sporting and cultural events.

So when the organizers of the annual du Maurier Classic golf tournament announced that the event had lost its status as a major championship on the Ladies’ Professional Golf Association Tour and faced imminent termination, it seemed confirmation of all the worst predictions.

The news came just days before Oct. 1, when the new restrictions were scheduled to come into effect. Organizers said they’d fallen short in their efforts to find long-term sponsors to replace du Maurier, and had no assurance of being able to cover the tournament’s $7-million operating cost past 2001.

Is this a harbinger of things to come?

Quite possibly, suggests Roy Roedger, president of Toronto-based sports marketing agency Second Dimension International. Because of long-standing federal regulations that limit the scope of their mass-market advertising activities, he says, tobacco manufacturers have traditionally been key players in the sponsorship marketing arena.

‘The reality is that tobacco companies couldn’t spend a lot on advertising, so they had disproportionate amounts of money to put into sponsorship. That’s why it’s going to be tough to come up with the same dollars, let’s say, as du Maurier was putting into tennis or the LPGA event.’

But not everyone sees it quite that way. While the loss of tobacco industry cash is undeniably a blow to many event properties, experts point to potential sources elsewhere – mainly in the burgeoning high-technology and communications sectors – that could more than make up for this.

Bill C-71 effectively prohibits the likes of Imperial Tobacco (maker of the du Maurier brand), JTI-Macdonald and Rothmans, Benson & Hedges from taking title sponsor positions at live events.

Under the provisions now in effect, tobacco companies are forbidden from signing any new sponsorship deals. In the case of properties they currently sponsor, the manufacturers must restrict their messages to the bottom 10% of all event signage. Off-site support advertising, meanwhile, must be confined to bars, direct mailings and magazines with predominantly adult readership.

By 2003, even these limited activities will no longer be permissible, and tobacco companies will find themselves out of the sponsorship game altogether. In many cases, however, the manufacturers aren’t even bothering to wait – they’re opting out now.

Is anyone else likely to opt in?

Sure, says Keith McIntyre, president of Mississauga, Ont.-based event marketing agency K. Mac & Associates. The most likely candidates, he contends, are the so-called convergence players – deep-pocketed multimedia giants such as Rogers Communications and BCE that need access to content for their various broadcast, online and print properties.

There’s been a real upsurge in sponsorship marketing activity within this sector of late, McIntyre says. ‘I’ve seen a lot more action. All of a sudden, they’re entering the fray.’

Consider the example of Rogers. This past April, the company’s wireless subsidiary signed a six-year deal with Tennis Canada. Rogers AT&T Wireless will serve as co-title sponsor, along with AT&T Canada, for the Canadian Open women’s tennis championships – an event formerly sponsored by du Maurier.

Paul Allamby, vice-president, market management with Rogers AT&T Wireless, says du Maurier’s departure opened up a rare opportunity to buy into a premier international sporting event at the top tier.

Rogers, he says, plans to continue involving itself in more sponsorships, as part of its overall convergence strategy.

‘We’re a multimedia company, and sports is terrific content,’ he says.

The fast-growing high-tech sector is another potential source of new sponsorship dollars. Nortel Networks, for example, recently signed on to replace du Maurier as title sponsor of the Spruce Meadows Masters of Calgary, an internationally renowned equestrian competition.

David Buffett, Nortel’s account vice-president for Western Canada, says the company had been involved with the event in a lesser capacity for seven years, but seized the opportunity to claim title position because of its international profile.

Event organizers looking to replace tobacco industry dollars with cash from other sectors may find that they have to adjust their strategies.

Certainly that’s what Hugh Wakeham, president of event marketing agency Wakeham & Associates Marketing, has discovered in his work with the Toronto Downtown Jazz Festival. To ensure its long-term viability, he says, the festival can no longer afford to rely on a single major sponsor, as it did when du Maurier held the title position. So organizers have created a secondary tier to accommodate as many as three prime sponsors. (The new sponsorship line-up is expected to be announced in the next few weeks.)

In addition, Wakeham says, the festival is working to create sponsorship packages that offer greater marketing value to partners.

Right now, for example, the festival is talking to one unnamed telecommunications provider about setting up a ‘cyber café’ in conjunction with the event, to help showcase that company’s Internet service capabilities.

The Montreal International Jazz Festival took a similar approach when it signed on General Motors of Canada as premier sponsor this past summer. The package gives the auto maker scope for activities such as offering minor car maintenance on-site at the festival, and providing branded strollers to families with infants.

Tobacco companies, of course, continue to bemoan Ottawa’s move to restrict their sponsorship initiatives. John McDonald, spokesperson for Rothmans, Benson & Hedges, says Bill C-71 will eliminate an estimated $65 million in support for sports and arts events.

Rothmans itself has already pulled out of Montreal’s Just For Laughs comedy festival, and is now pondering the fate of its annual fireworks festival, the Symphony of Fire – a proprietary event that the company created several years ago.

‘The government is really taking away the viability of doing these world-class events,’ he says.

Federal officials, however, say their concern is with the well-being of Canadians – not the well-being of golf tournaments and show-jumping competitions.

‘Tobacco and smoking is the main cause of preventable disease in Canada,’ says federal Ministry of Health spokesperson Andrew Swift. ‘So the goal is to protect young persons and others from inducements to use tobacco products. And young people are especially susceptible to this type of indirect messaging, which associates popular or much-loved events with the product.’