Cheating does have consequences. Just ask Michael Waltrip and his Michael Waltrip Racing (MWR) organization. It was announced by Napa Auto Parts that they are dropping their sponsorship – a relationship with Waltrip that goes back over a dozen seasons.
This circumstance stems from the end of the regular season race at Richmond less than two weeks ago where MWR manipulated the results of the race by having two of their other team cars – Brian Vickers and Clint Bowyer – create problems that eventually caused yellows, allowing #56 of Martin Truex a chance to get back in the points battle which he ultimately did, winning a spot in the Chase on a tie-breaker. However, NASCAR penalized the team and Truex was knocked out of the Chase, although he personally hadn’t done anything wrong.
There are a lot of losers in this situation beginning with Truex Jr., who has not only lost the sponsor of the car he drives but also he obviously lost out on a shot at the NASCAR Sprint Cup championship, plus he may not have a job come 2014. Another loser was Michael Waltrip who lost $300,000 in fines, plus one of his cars was eliminated from contention and maybe biggest of all, he lost a longtime marketing partner. Which brings up an interesting irony.
Having been involved in marketing and race sponsorships for decades, I’ve always respected Michael’s ability to acquire partners and hold on to them even though he seldom if ever won and in his earliest years of owning his own organization, losing miserably and often. However, he was able to offer the sponsor quality branding that wasn’t just a name on the side of a car that needed to win for exposure purposes.
This contradiction of sorts worked well and in fact, companies like Napa Auto Parts were happy enough with the partnership that they had signed on with MWR for a three-year extension of their marketing contract – valued at roughly $16 million a year (source: Sports Business Journal). And note that Napa Auto Parts is one of the very few NASCAR sponsors that funds a full season. Except that has now gone away and Waltrip will be hard-pressed to replace a sponsor of that significance in what in this business is a relatively short period of time. The 2014 season starts in February.
Can MWR weather another storm?
Waltrip is keeping a stiff upper lip but the results of his teams actions may create a severe consequence on his team’s abilities to continue. He has apologized and taken full responsibility for the cheating but the results of this scandal must be having an effect on the team as a whole. Waltrip struggled for the first few years he owned his team but with the investment of co-owner and billionaire banker Rob Kauffman, the organization has prospered. Yet, this cheating brings back bad memories for Waltrip because this isn’t the first time he was caught cheating. Back in ’07 during his first season as an owner, Toyota and MWR were nailed for a major infraction with an illegal fuel additive. Napa stayed with Michael on that occasion.
Sponsors have ethics clauses in their contract and that’s more than likely what Napa Auto Parts used to remove themselves from their MWR funding commitments. If Michael doesn’t want to lose another sponsor, he had better get a clear picture in his mind that the moral structure in his organization has to improve or he won’t make it in the motorsports business.
For now, no other sponsor has shown any obvious moves towards leaving MWR. However, Napa’s exit should send a message that winning at all cost isn’t such a great plan of action.
Memo to Michael: Cheating matters.