Buried underneath the controversies of stage racing and Monster Energy girls we find one of NASCAR’s most popular drivers stuck in the middle of a confusing lawsuit.
Without getting into all of the legalities – Stewart-Haas Racing (SHR) sued Nature’s Bakery for $31 million for a breach of their contract. In return, Nature’s Bakery has submitted a counterclaim providing details on why they terminated the contract.
I find those details surrounding the case interesting and somewhat troubling.
First, to keep it simple…Nature’s Bakery fired Danica Patrick and SHR. When you read the reports of the counterclaim as found in an ESPN article published on February 25, 2017, Nature’s Bakery said Danica and SHR didn’t do their job. If Nature’s Bakery kept good documentation and have proof of this allegation, they will easily win this lawsuit.
Breach of contract lawsuits are never fun and can be unpredictable. For me personally, I live every day in corporate America and I’m driven by contracts based on service level goals. In every contract there’s a clause stating if our company doesn’t fulfill our obligations set forth in the agreement, clients can terminate the relationship. To help with this we’ve added a remedy clause – giving us a specific time frame to resolve client issues and if we still can’t resolve the issue, we lose our client. It’s pretty simple.
So what’s happening here? The answer – this is a money play, period. SHR was counting on being paid through the term of the contract, which was three years. And now after one year the contract has been terminated and it financially hurts their company. If they delivered and I mean fully delivered on all aspects of the agreement as SHR stated in a FOX Sports article on February 7, 2017 the judge could make a decision in their favor.
Earlier I said I was troubled – let me explain.
The prospect of SHR losing this suit could have far reaching consequences for not only SHR, but Danica Patrick and NASCAR. When was the last time you heard of a sponsor leaving a NASCAR team for simply off the track management issues? I can’t remember. Most of the time, sponsors change teams or they end up leaving the sport at the end of an agreement. It’s rare a team and driver are fired for not performing off the track – allegedly in this case. The effect could hurt a team’s reputation and ability to secure future sponsorships . It could also bring challenges to the sport by raising a red flag with current and future sponsors – giving them additional leverage with off the track performance goals (especially with social media) they don’t currently enjoy. The consequences should make NASCAR and team owners nervous.
Let’s dig deeper in my troubled mind.
It’s getting ugly. The language and actions by Stewart-Haas Racing, Nature’s Bakery and the media should be concerning to all of us. One side paints a picture that the other couldn’t pay its bills. The accusations are met with cries of being bullied. And some in a very soft NASCAR media interjects by planting seeds in the minds of NASCAR fans against a company that they’ve determined had no means of paying their bills. It’s a game…the media can create a perception because everyone knows perception is reality, right? If we’re honest with ourselves we’d admit – with favoritism comes closed mindedness. Like with most things personal, in this sport we’re guilty of being overly critical of those who stand against our favorite team and drivers – even when our favorite team or drivers are wrong. And sadly those embedded within the sport are aware of this social weakness currently found not only in NASCAR but throughout our country.
Allow me to give you a little flavor. Before the counterclaim was filed by Nature’s Bakery, printed in one story by a major NASCAR news outlet was, “Nature’s Bakery Double Chocolate Brownie Twin Packs sell for less than $3 each at Walmart.com. With economics like that, it’s hard to fathom exactly how the sponsor could move enough extra product to afford the annual $15 million sponsor tab.”
It’s an amazing statement and one I’m not sure is a fair measurement when vetting a potential sponsor. And honestly, if the above statement is correct you’ve got to ask yourself why did SHR move forward with a three-year deal in the first place?
I won’t claim to know the true intentions of the writer, but the consequences of the statement caused many NASCAR insiders and fans to believe Nature’s Bakery couldn’t pay for their sponsorship. The counterclaim as detailed by NBC Sports published on February 25, 2017, states Nature’s Bakery “paid over $17 million to SHR in 2016.” If this is true, we certainly have some trust issues to deal with in our sport.
Nature’s Bakery also detailed their challenges with Danica Patrick. If their claims are true, Danica was rightfully fired. If their claims are true, SHR could not control Danica – which will most certainly give additional ammunition to her critics. If their claims are true, sponsors may take notice and could act to protect themselves from future issues or they could place expectations on social media usage by drivers and teams. The ramifications of losing this suit for SHR could change the landscape of how sponsorship relationships are handled in NASCAR. But for NASCAR and SHR the loss would be survivable.
For Danica, her brand could…and I say could, be hurt. She’s extremely popular and with larger sponsors not needing the same level of engagement as a smaller company, she’ll most likely be fine. But she’s finished inside the top-10 only 4% of the time at NASCAR’s top level causing her to lose some brand leverage – add a damaged reputation from this Nature’s Bakery fiasco and her value could take a hit.
For Nature’s Bakery, if their counterclaim is not accurate – untruthful – it will be devastating. I don’t know if they had the financial means to continue their sponsorship or not, but if you unfairly accused a company and a person of wrongdoing as they did in this case, not only should they pay the full sponsorship costs, they will most certainly lose the public trust. It’s a recipe for a slow and painful company death.
As a society we should be fair to all parties involved in this lawsuit. NASCAR nation, stay open minded and don’t allow some in the media, favorable to our sport, point you down the wrong path. Hopefully at the end of the day, all parties will sit at the table, enjoy a fig bar together and quietly work it out.
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