Takeaways from the Stewart-Haas Racing lawsuit against Nature’s Bakery

Stewart-Haas Racing filed a lawsuit in North Carolina Superior Court on Friday, suing sponsor Nature’s Bakery for breach of contract. The news was first reported by the Associated Press.

After looking through a copy of the lawsuit, here are some takeaways of interest:

— SHR was skeptical from the start Nature’s Bakery would be able to pay the bills. During the initial negotiations, SHR said it “expressed significant concern that Nature’s Bakery would be unable to afford a primary sponsorship of the magnitude it requested.” But Nature’s Bakery owner David Marson “provided repeated assurances” the company had enough cash to pay the $15.2 million per year sponsorship through 2018.

— Before last season even started, Nature’s Bakery told SHR it was having cash flow issues and requested to modify the payment due dates. So instead of big payments like $5 million and $3.4 million, SHR spread out the payments into smaller increments like $2.5 million and $1 million.

— SHR received a letter in December in which Nature’s Bakery claimed Patrick was endorsing competing products (she sometimes posts photos of protein powder, but SHR contends that’s not a competitor to fig bars). Nature’s Bakery also claimed Patrick didn’t endorse its products enough on social media. At the end of the letter, Nature’s Bakery said it needed to transition out of its sponsorship and SHR would need to find a new sponsor for 25 races this season. The letter “shocked” SHR, which was already well down the road of preparing for 2017.

— As part of the lawsuit, SHR included dozens of Patrick’s Instagram posts which were “liked” by Nature’s Bakery (including the protein powder ones). The lawsuit contends Nature’s Bakery was totally fine with Patrick’s posts (and demonstrated so publicly) until it became necessary to create an excuse to terminate the sponsorship.

— SHR is suing for more than $31 million, which includes the cost of the sponsorship for the next two seasons. Nature’s Bakery has already missed payments of more than $1.3 million and would be even more if SHR hadn’t modified the agreement.

— In a statement, SHR said it is committed to running the car regardless of sponsorship this season:

“Nature’s Bakery is in material breach of its contract with Stewart-Haas Racing. It is an unfortunate situation, as the team has delivered on all aspects of its contract and was prepared to do so again in 2017. Ultimately, this is a situation that will be resolved in a court of law.

“Stewart-Haas Racing remains focused on its preparation for the 2017 NASCAR season where it will again field four entries in the Monster Energy NASCAR Cup Series while also introducing a full-time NASCAR Xfinity Series team. The litigation with Nature’s Bakery will not impact the organization’s on-track efforts.”

Danica Patrick won’t be driving this car any longer. (Photo courtesy of NASCAR)

48 Replies to “Takeaways from the Stewart-Haas Racing lawsuit against Nature’s Bakery”

  1. Wow! This is kind of shocking news. btw, congrats Jeff on your new venture. Looks like it’s going well!

  2. Wonder why NB did not try to claim that her performance on the track was the reason, instead of a few tweets at least they could have the results
    I

  3. Telling that Danica attracted a shaky sponsor.

    One would think dozens of High Profile fashion/body care brands would be interested in her. Instead they got a shady granola company owned by a father and son.

    What happened to the bag of money she was bringing to SHR?

  4. One of the biggest takeaways for me is seeing just how expensive it is to sponsor a Cup Series race team. I knew it was expensive, but to actually see the numbers is eye-opening.

  5. If Danica is as marketable as she’s reported to be, why would SHR accept this deal basically on little more than the word of NB’s CEO, despite their clear concerns for NB’s ability to pay? This sponsorship seemed destined to fail from day 1, as their reported $100M in gross revenue wasn’t even close to being able to absorb a sponsorship of this magnitude.

    For the sponsorship to generate a positive ROI they would have likely needed to double (if not more) their pre-Danica revenue, and that was clearly far too much of an undertaking in an incredibly crowded market. Now both SHR and NB are going to be out millions, with the former scrambling to fill a 25 race hole and the latter scrambling to avoid bankruptcy.

    1. NB was over zealous in thinking they could get the exposure first and build revenue with that publicity and it backfired on them.

  6. As bad as the products taste I am shocked they are even in business. The brownies taste like nature, and by nature I mean dirt.

  7. I agree with SHR needing to do what they have too. But a outside company wanting to come into the sport this may worry them.

  8. This really sucks not really perfect timing on this as the new season is upon us hope it all works out an danca has an awesome season

  9. Good bye “Go-Daddy”…
    Good bye “Natures Bakery”….

    Are we now finally going to say “good bye” to someone who was only a “pretty face” ?

    One of the biggest problems with NASCAR is the fact that we are watching 40 (not 43) of the most “marketable”, not BEST, stock car drivers.

    Ernie Irvan, Sterling Marlin, MarK Martin, etc. were not the best looking people, but they could wheel the hell out of a stock car, along with DW, Dale SR, Wallace…..

    The “Heroes” of NASCAR are gone, replaced with corporate cowboys like Johnson who could win championships amid less formidable competition……as soon as Dale Jr. retires so goes the future of this sport…….

    1. I was feeling this up until the comment on Johnson. He’s definitely the most talented driver in the field, and is incredibly transparent and real with his fans. I agree with a lot you said but I feel Johnson is a bad example.

    2. Since when has Dale Jr been the future of the sport? That’s the funniest thing I’ve ever heard.
      He’s nowhere near as talented as many other drivers, other than at superspeedways.

      And speaking of marketable, who’s more marketable than the most popular driver 13 years in a row? …. Mostly due to his dad. And that’s precisely the reason Hendrick let Kyle Busch go and signed Junior.

      But, yes, all in all NASCAR is more about sponsorship and he ability to get it, as opposed to talent.

      And if it was a guy in Danica’s place, he’d have been gone a long time ago. SHR takes in money because of her and is willing to run the car without sponsorship, if necessary. Nothing to do with her talent or lack of it …..

      To be fair though, Junior is way more talented than Patrick. So, settle down. 😉😉

    3. “As soon as Dale Jr retires so dies the future of this sport “. Do you seriously believe that statement ? I was a fan of Sr and have watched the sport devolve from what it used to be and I hate it. But, to believe Jr is all that is left, is laughable.

      1. Are all of you aware of what the ratings were for the second half of last season when Jr WASN’T driving? ABYSMAL!

        Junior brings fans. Both to the track and to the TV. Mainly because he is a throwback to the days when you could ACTUALLY RELATE to a driver. He appeals to the “working man” not unlike his father did. Funny that he is widely know for his respect and affection for NASCAR’S past as well.

        When he is gone, so will go a great portion of those who root for him. His father was bigger than the sport. Junior inherited those fans (myself included) whether or not he is out there winning a TON of races. But there is no denying his talent even outside of Daytona/Talledega…(multiple wins at Phoenix, Texas, Pocono, Michigan, all the short tracks, etc. etc.)

        But this debate is NOT about his talent. Its about his “star power”. Johnson is a great driver, as is Kyle Bush. But neither is “star enough” to prop up an audience for NASCAR once Junior is gone!

        Junior is also a sponsor magnet.

        NASCAR used to have MULTIPLE stars in the field. It was not just the Earnhardt Sr. show when you had Elliott, Allison, Wallace, Waltrip, Petty’s, Kulwicki, in the show as well. People like Jimmy Spencer got rides in NASCAR despite being less than physically attractive because they could RACE! ALL of those drivers had much bigger followings than exist today. Mainly because they were DRIVERS first, sponsor bait second….

        The sport just has not found a way to replace these type of drivers in its quest for corporate support. And this sport is unique among American sports in that NASCAR fans support drivers-NOT teams.

        I am a “life long” RAMS fan (Los Angeles or St. Louis) no matter who is coaching or quarterbacking. NASCAR just does not work this way. And as much as I have rooted for Childress racing with Dale Sr., I just have not become the Austin Dillon fan I was hoping I might. I may NEVER find another driver that I root for as passionately (with the accompanying $$ spent) as I have rooted for in Earnhardt Sr. and Jr.

        When Jr goes will I still be a “Hendricks” fan? Doubtful…I may not even be watching….

        So this sponsor trouble is just more proof positive that NASCAR is losing the corporate support it uniquely needs to survive. While stick and ball sports seem to do fine with ticket sales and TV revenues, NASCAR does not.

        Unless NASCAR some how begins to attract drivers that we can all relate to, “working man” types instead of corporate drones. People who used to draw in fans first, with their “derring-do” (see Mr. Excitement as mentioned above) and not their ability to look good for “xyz”incorporated, then their will never be a return to the height of the sports popularity as it existed in 1998…..

        One more thing……If SHR wants to employ a REAL competitive FEMALE driver, maybe they should look no further than Milka Dunno. Look her up and you will find a gorgeous driver that has actually WON races and championships…Just saying….

        1. There are ALOT of drivers that have the talent that Martin, Marlin, etc….Harvick is a phenomenal driver. I agree with what NASCAR has become, but the afore mentioned drivers popularity was due as much because of WHEN they were driving as it was how well they drove. With the exception of who is crowned champion these days, the talent is every bit as good. The fans have changed every bit as much….That’s something to remember as well.

          1. I have interesting anecdotal evidence about todays level of driving talent versus what existed in the past:

            Mark Martin said, “I forgot what good driving was until I started driving in the truck series. Much better drivers THERE than what we have in cup these days…”

            Who was driving trucks at that time? Musgrave, Skinner, Sprague, Sterling Marlin, Ken Schrader, as well as a slew of drivers deemed “too old” or unmarketable.

            There are some GREAT DRIVERS in Cup these days-just not as many today than before. I believe that Harvick and Kyle Bush as well as a few others, would be successful in ANY NASCAR era……much of the rest of the field-not so much…

    4. That Is Bull , Jr. Should Already Have Been Retired , Maybe Someone Else Could Get Some Reckonition From Nascar & The Media.There Is More Capable Drivers Out There Racing Their Hearts Out Besides One Driver , He Is Good But There Is A Lot Out There Better .

    5. So is jr a “hero” or just a pretty face. After all he does win all the time. Competitive every week always in contention. Oh my bad there is only one Hendrick driver that does that and he doesn’t quit halfway thru season with a headache. JR MOST OVERRATED IN NASCAR. can’t wait for him to retire so I don’t have to hear about him anymore. Maybe he can go do family time with the other quitter in nascar

    6. She needs to step up her game and win races or at least some top finishes. Pretty face only goes so far when your talking that many millions. Can’t really blame the sponsor if it was not paying off. She was not producing either

    7. Can’t blame danica she’s smart and has made a ton of money.not a bad job.
      I agree,dale jr gone is death of nascar

  10. A contract is a deal and in my day I did a handshake for thousands… If you can’t pay it don’t say it…

  11. I thought along the lines of SHR when the deal was originated. You have to sell a lot of protein bars to cover that expense. Especially from a product that I had never heard of. And when I went to the spring Richmond race and went to their display trailer my thoughts were verified. All they had was a pick up truck with an enclosed trailer. They were handing out samples. Not much of a display for a primary sponsor in Cup.

    Another factor that has not been mentioned is the fact that while Danica remains very popular with the fans she has lost the tv coverage she received the first two years in Cup. Her in tra.k performance just doesn’t warrant the coverage she was receiving.

    Let’s face it. Tv ratings are in decline along with attendance at the races. The value of sponsoring NASCAR race teams is decreasing. NASCAR is trying to cut costs to race for the teams but unless things turn around soon the sponsor pool will shrivel even more. The writing is on the wall. Look at the Charters being sold, swapped or leased. Petty and Roush reducing team size. This year may be a pivitol one for the sport. The sport cannot continue on this downward spiral.

    1. She’s smart to ride her popularity as long as she can.she’s made tons off it.nascar is gona lose many big name drivers in next 5-10 yrs not goodoing for them at all.they’ve shrank seats.and not many show up anymore to races.sponsors are seeing no turn around in money. I don’t see nascar cup series lasting or they will keep it and drop truck and nationwide serise to keep it alive.
      But it’s not gonna be a big thing 5 yrs down the road.the sponsorship just won’t be there to keep it afloat .sad but I said when my favorite and best driver ever Dale Sr past.that it wouldn’t ever be the same and now with jrs retirement just around the corner it’s inevitable.
      Jimmy johnson,harvick,
      Kenseth ,Kurt busch,hamlin,truex, and I’m sure more are going to be following not to muchave longer.after that there’s just not enough big names left to carry it.so sad

  12. As the cars roll out for the start of the 500 Danica should be cleaning up her tailgate party and getting to her seat with the other spectators.

  13. There have been dozens of fly-by-night Cup Series sponsors over the decades and it is impossible to filter them out.

    The personal animosity against Danica I see everywhere is unwarranted. Sad.

    1. I agree,Danica has been in an awesome spot and used what the good Lord gave her to the best of her ability and any of you guys that are shunning her are just jealous.
      No shes nothe a great driver but she’s batter then a lot of guys out there and that’s imprestive cuz I’m sure she’s doing something none of your critics could do.its not an easy thing to drive that fast and like your on ice for 4 or 5 hrs and finish a lot of races and some in top 15 and better at times . So ease up on a brilliant young lady that has done very well for her self. Was she just suppose to stop driving cuz you morons don’t want her out there? There has been many times she was wrecked by guys.so criticize then.
      Besides she is sexy as hell

  14. Jeff you do a really good job of keeping us fans updated. I truly believe that this is what happens when your driver under achieves. When is SHR going to give up this losing experiment and realize Danica Patrick is a failed experiment?

  15. The main problem is the cost of racing in NASCAR. If the lower that more sponsors, and eventually fans will show up.

  16. SHR must of been desperate for a sponsor .. a company that has a $100,000, 000 in revenue per year says they will pay you 15 mill + per year. shoulda seen it commin

  17. I would have to agree with Carl, does anyone remember when DW was sponsored by Speedblock? it was some sort of concrete block thing but they never paid him. ZLoop, Lycos and so on…

    Not that I am defending Danica’s poor performance but it seems if you can bring sponsor dollars to the team you can drive the car or “Pay to Play.”

    Sad but some of these drivers dont belong in the series in the first place but if you can bring money then ah what the hell right?

  18. Nature’s bakery was definitely a weird sponsorship choice. I guess they thought, if we align ourselves with Danica, she’ll boost our recognition, just like Go Daddy. Seems like they bit off a little more than they could chew.

  19. Jeff, do NASCAR teams employ Background Investigation firms to vett potential sponsors? Maybe not a Lisbeth Salander or Gavin de Becker but certainly there has to be some research into potential investors/sponsors to avoid ‘situations” like this that are not good for anyone involved on all sides.

    1. SHR didn’t have many choices. You could do a due diligence if you had several choices. I understand they had other offers but they were weaker then Nature’s.

      Once Monster signed for bargain basement money every sponsor is looking at the ROI.

      If I can sponsor the entire series for less than it costs to sponsor a single car I really have to rethink what I’m spending.

    2. Jerry, I believe they do and SHR was leery of Natures Bakery in the first place. Clint Bowyer took a proposal to Childress with and Energy drink that lasts five hours. RC told him the numbers he brought would not work. Clint left and with other monies from multiple sponsors he made it work at MWR.

      But then you get the Fly By Night car owner like J.D. Stacy, the Team III embelezlement scandal, The Freedlander team with it money laundering issues, Gillett Motorsports and Tyler Jet Racing.

      The way to end up with a small fortune in racing is start out with a large fortune.

  20. Great, now we’ll never get to try those Danica Victory Donuts that Nature’s Bakery wanted to promote.

  21. Jerry, SHR was probably so desperate to find a sponsor for DP that they more than likely took the NB $$ because there were no other sponsors willing to give DP any money. Beggars can’t be choosers.
    Cale, I don’t think there is personal animosity towards DP. I think the informed people who presently follow this sorry series now and the great racing series it was in the past recognize a hack when they see one. Bringing DP into the series was a bare faced marketing ploy which failed almost immediately. You notice that Indy Car let her go without a struggle and the Andretti’s have been sucking on lemons since she left trying to get the smile off their faces.

    1. THANK YOU so much David! YOU hit the nail DIRECTLY on its head!

      I am a 50 year old fan that has been following this sport since 1986. I have seen this sport in decline in a HUGE way, and I know it because I was there when NASCAR was beginning to compete with the NFL in cultural significance…..

      Now its barely a sport “after thought”.

  22. Are all of you aware of what the ratings were for the second half of last season when Jr WASN’T driving? ABYSMAL!

    Junior brings fans. Both to the track and to the TV. Mainly because he is a throwback to the days when you could ACTUALLY RELATE to a driver. He appeals to the “working man” not unlike his father did. Funny that he is widely know for his respect and affection for NASCAR’S past as well.

    When he is gone, so will go a great portion of those who root for him. His father was bigger than the sport. Junior inherited those fans (myself included) whether or not he is out there winning a TON of races. But there is no denying his talent even outside of Daytona/Talledega…(multiple wins at Phoenix, Texas, Pocono, Michigan, all the short tracks, etc. etc.)

    But this debate is NOT about his talent. Its about his “star power”. Johnson is a great driver, as is Kyle Bush. But neither is “star enough” to prop up an audience for NASCAR once Junior is gone!

    Junior is also a sponsor magnet.

    NASCAR used to have MULTIPLE stars in the field. It was not just the Earnhardt Sr. show when you had Elliott, Allison, Wallace, Waltrip, Petty’s, Kulwicki, in the show as well. People like Jimmy Spencer got rides in NASCAR despite being less than physically attractive because they could RACE! ALL of those drivers had much bigger followings than exist today. Mainly because they were DRIVERS first, sponsor bait second….

    The sport just has not found a way to replace these type of drivers in its quest for corporate support. And this sport is unique among American sports in that NASCAR fans support drivers-NOT teams.

    I am a “life long” RAMS fan (Los Angeles or St. Louis) no matter who is coaching or quarterbacking. NASCAR just does not work this way. And as much as I have rooted for Childress racing with Dale Sr., I just have not become the Austin Dillon fan I was hoping I might. I may NEVER find another driver that I root for as passionately (with the accompanying $$ spent) as I have rooted for in Earnhardt Sr. and Jr.

    When Jr goes will I still be a “Hendricks” fan? Doubtful…I may not even be watching….

    So this sponsor trouble is just more proof positive that NASCAR is losing the corporate support it uniquely needs to survive. While stick and ball sports seem to do fine with ticket sales and TV revenues, NASCAR does not.

    Unless NASCAR some how begins to attract drivers that we can all relate to, “working man” types instead of corporate drones. People who used to draw in fans first, with their “derring-do” (see Mr. Excitement as mentioned above) and not their ability to look good for “xyz”incorporated, then their will never be a return to the height of the sports popularity as it existed in 1998…..

    One more thing……If SHR wants to employ a REAL competitive FEMALE driver, maybe they should look no further than Milka Dunno. Look her up and you will find a gorgeous driver that has actually WON races and championships…Just saying….

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