Posted on August 29, 2009 by David Oxenford

No FCC Rules Against Beer Ads, But NCAA and Other Program Suppliers May Have Their Own Limits

Many broadcasters have had the conception that there are FCC rules against liquor advertising,  As we wrote in 2007, the FCC has never directly regulated liquor ads.  Many years ago, the FCC did ask broadcasters seeking a license if they would rely on the NAB Code of voluntary conduct, which set out limits on broadcaster advertising for alcoholic beverages (essentially forbidding hard liquor ads).  When the Code was declared unconstitutional in the 1980s, there was no longer any FCC review, direct or indirect, of any alcoholic beverage advertising.  But that is not to say that there were no restrictions, as many programming providers and rights holders themselves limited the kinds of ads that could accompany their programs and, as we wrote in our previous post, the alcoholic beverage trade associations had voluntary codes of conduct, which the FTC looks to in determining whether advertising is an unfair trade practice.  The rightsholder restrictions were demonstrated this past week, when the University of Wisconsin reportedly banned beer advertising on broadcast coverage of its school's football games.  Private contracts from program suppliers and rights holders, including sports programming from schools and colleges, often include restrictions against certain types of advertising which, if breached, can carry contractual penalties including the potential for the cancellation of a station's authority to continue to carry the programming.  Especially where such rights were the subject of competitive bargaining, broadcasters want to insure that they do not violate these restrictions and put their valuable programming rights at risk.

Some of the broadest restrictions on advertising accompany sports programs.  On Friday, there was a story in Inside Radio (subscription required) about the NCAA's requirements for broadcast advertising.  With college football season up us, we thought that we'd look at some of those advertising restrictions.  Those restrictions can be found on the NCAA website, here.  The NCAA has a list of specific products that are permitted to be advertised, with guidelines on how those presentations should be made when the product is pitched.  In addition, the list includes certain products that should not be advertised on NCAA games.  For instance, while beer advertising is permitted, the NCAA says that such ads should not take up more than 60 seconds of commercial time per hour (one 60 second ad or two 30 second ads).  The ads should feature no "gratuitous and overly suggestive sexual innuendo, no displays of disorderly, reckless or destructive behavior."  The ads also should include a "drink responsibly" message.  Hard liquor, on the other hand, cannot be advertised in NCAA programs.  Similarly, there are prohibitions on gambling ads of any kind (including ads for casinos or race tracks); firearms; adult entertainment locations including pool halls; adult movies and video games (with NC-17 ratings); ads promoting any products containing NCAA banned substances (including ginseng); and ads for controversial and political issues.  

The guidelines for the NCAA, and those for other organizations, are meant to preserve a certain image of the organization.  Even professional sports leagues look at their image in deciding what advertisers to permit to accept their brands (see the NFL standards, here), and which are carried over into advertising restrictions within broadcasts of games (see example, here).  Thus, to avoid inadvertently violating any contract provisions, stations need to use care in reviewing their contractual advertising restrictions on all programming that they broadcast to insure that they act accordingly when choosing the spots to run in such programming. 
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Posted on November 30, 2007 by David Oxenford

Will You Drink to That? - Advertising Liquor on Broadcast Stations

The New York Times recently published an article about NBC's owned and operated station in New York City acceptance of advertising for liquor.  While ads for beer and wine have been a staple on broadcast stations (though see our discussion of the limits on that advertising, here), ads for other alcoholic beverages ads have been less frequent.  Many broadcasters have for years believed that such ads were prohibited by the FCC or some other government agency.  In fact, alcohol ads have not been prohibited by law, but instead by voluntary actions of trade associations representing broadcasters and the alcoholic beverage industry .

Until the early 1980s, the National Association of Broadcasters had a voluntary code of conduct for broadcasters, suggesting good standards and practices for broadcasters: limiting some broadcast content while encouraging broadcasters to air other programming perceived to be in the public interest.  Among the conduct that the Code prohibited was the advertising of hard liquor. While the NAB Code was not mandatory for broadcasters, in filing many routine applications for new stations and for the acquisition of existing stations, the FCC in the past had requirements that the potential broadcasters explain how their programming would serve the public interest.  Most applicants would shorthand their compliance plans by simply promising to abide by the NAB code, in effect binding themselves to the code through those representations made to the FCC.  The Code was in place until the early 1980s, when the Department of Justice became concerned that code provisions suggesting maximum commercial loads and similar matters functioned as a restraint of trade in violation of the antitrust laws, and the NAB Code was abandoned.

Even though the NAB Code was abandoned, most broadcasters continued to act with respect to liquor advertising as if the Code was still in place, either prohibiting such ads or channeling them to late night hours.  Also, as pointed out by the Times article, the alcohol industry itself had a voluntary code until the early 1990s that prohibited advertising on broadcast stations.  But, as these voluntary bans lifted, from time to time certain alcohol manufacturers would make a push to get their ads onto broadcast stations, and get some acceptance here and there, though many broadcasters, fearing re-regulation by Congress, consumer complaints, or for other reasons still shied away from such ads.  But gradually, as a new generation of broadcasters who don't remember the NAB Code head broadcast sales forces, the fears of running these commercials are gradually dissipating - leading to the network stations (which have been among the last hold-outs even when running ads for Viagra and other products which would never have been dreamed of when the NAB Code was in existence) finally beginning to accept such ads.

Note that, though there are not FCC regulations on alcohol advertising, there are still some limits on those ads.  Like the beer ads about which we recently wrote, there are voluntary guidelines from alcohol trade groups (often used as a guide by the FTC in making a determination as to whether an ad is unfair or deceptive) that restrict alcohol advertising to stations and programs where children are less likely to be in the audience (shooting for audiences where at least 70% of the listeners or viewers are above legal drinking age).  FTC decisions and the trade association voluntary rules also stress showing safe, not abusive, drinking in ads.  Many states also have restrictions through law or regulation on certain types of alcohol ads (e.g. happy hour ads, two for one specials, even liquor-by-the-drink ads), so broadcasters and other electronic media companies should do a little research before taking every ad that comes their way.  But, for the most part, the acceptance now of these ads by network-owned stations show that any bar to such ads is close to completely falling. 

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