British American Tobacco (BAT), the global cigarettes and financial services group, is expected to buy the Tyrrell Formula One racing team and fund it with 300m over the next five years, the first time a tobacco company has actually bought an F1 team.
The move comes after the Government unexpectedly decided to exempt F1 from its proposed ban on tobacco advertising.
The controversy was further fuelled when F1 boss Bernie Ecclestone admitted he donated 1m to the Labour Party before the election. The Labour Party returned the donation this week.
BAT is expected to make an announcement on December 2. The racing team is likely to keep the Tyrrell name but the holding company for the group will change from Tyrrell Racing Organisation to British & American Racing.
This will be the first time that a tobacco company has bought a team, despite the fact that Gallaher with Benson & Hedges, and Philip Morris with Marlboro have long-standing relationships with the sport.
Tobacco sponsorship contributes 100m a year to F1, which is a third of the money it takes to run the sport.
The new team is not expected to take to the track until 1999. It will race with separate branding on the two team cars: one liveried with Lucky Strike, which sells heavily in Latin America; and the other with its budget brand 555, which sells well in the Far East.
The deal between BAT and Tyrrell is thought to have been broked by Craig Pollock, who is agent for F1 World Champion Jacques Villeneuve. Pollock is understood to be close to BAT, and there may be a chance of attracting him to the team in due course.
The cars are expected to be built by Reynard, the racing car manufacturer, which produces every kind of racing car from F1 to Indy cars.
Previously BAT has been linked with the Minardi team, while other F1 observers thought it would set up a team from scratch.
An F1 marketing director comments: “It makes sense. Tyrrell has an established name, and BAT has the money.”
A BAT spokesman says: “We are actively looking at resuming our relationship with F1.” He refuses to comment on whether the corporation will make an announcement about its future in motorsport on December 2.
The Tyrrell team has raced in F1 since 1968, has won two World Championship titles (1971 and 1973), but has not won an F1 race since 1983.
Tobacco giants Philip Morris and Rothmans have been found guilty of breaking sponsorship rules in their efforts to advertise their brands at the British Grand Prix.
Anti-tobacco lobbyist ASH complained the manufacturers deliberately tried to sidestep voluntary restrictions on tobacco sponsorship by painting symbols and colours on cars. The complaint has been upheld by the Government backed Committee for the Monitoring of Agreements on Tobacco Advertising & Sponsorship (Comatas).
The decision means the famous red and white Marlboro chevron, painted on the Philip Morris-sponsored Ferrari car, and Rothmans’ use of the word “Racing” on the Williams car, cannot be used again at Silverstone.
News Analysis, page 23