Lesson For The Day - Do Your Research!

I'm sure if you haven't seen the article about the company ROKiT and their failed sponsorship deals (https://www.sportico.com/business/sponsorship/2022/rokit-nfl-nba-deals-1234690627/), you most likely will. There is a lesson to be learned from all of this and I want to share with you what I learned several months ago about ROKiT and their failed commitment to Tatiana Calderon and A.J. Foyt Racing (https://www.dhirubhai.net/pulse/my-take-tatiana-calderons-sponsorship-issues-daryl-curtis/).

I was really bothered by what happened to Tatiana. Essentially two months into a year long commitment of being the sole sponsor on the newly formed third IndyCar Team at A.J. Foyt Racing, ROKiT stopped making payments. By July the car was sidelined and two drivers, and essentially a full time race team, were out of a job. What happened? That was the question I asked myself. How did A.J. Foyt Racing and Tatiana Calderon get blindsided by this ordeal? Why did ROKiT stop making their payments? All of that I go into detail in my article. Of course, all of what I wrote about is pure speculation and mostly still is as I have no first hand knowledge. Then this article emerges two days ago outlining the failed sponsorship deals that ROKiT has been involved with - and my suspicions / theories were finally validated.

As a motorsports marketer and someone who is searching for that elusive sponsor, I rely on my research skills and abilities. I also rely on my intuition, common sense and understanding business practices. So, I researched the ROKiT company. It literally took me all of one hour to find all I needed to know. ROKiT was a risky business / sponsorship venture and had a person actually done their due diligence they would seriously question anything that ROKiT was proposing.

ROKiT is, by and large, a private company so there are not a lot of public financial filings to gather information from. However, if you are persistent and dig you will find what you need to start forming a picture of the company and it's overall financial health. It was not good.

The conundrum for me was how in the world are they involved in so many sponsorships on such a massive scale globally if they are operating in the red? How in the world does, by all appearances, a small company with a rather small revenue able to afford the large variety of top dollar sponsorships? It was quite a dichotomy to me. All of these things pointed to a company that was spending beyond its means, more interested in creating brand exposure but at the same time leaving a trail of broken contracts left and right. And, more confusing to me was why were there not any articles talking about this bad situation? Maybe I was completely wrong about them. But, I trusted my instincts. The situation with Tatiana Calderon and A.J. Foyt Racing, then, made a lot more sense. And this recent article validated all my questions and concerns.

So, what lessons did I take from the A.J. Foyt / Tatiana Calderon sponsorship debacle? Let me outline them here for you to read and take what you will from them.

1. Do your research.?Even when you think you have - go back and look some more. Don't take things on face value. Look for those things that might be an indication of bigger issues. Maybe you need to bring in people that can help you see things that you missed.
2. Have contingency plans.?If you started a third team, hired a staff to run that team and then hired a driver / drivers, make sure that you can provide security (well, as much security as you can have in the motorsports industry) to those people. That means have secondary sponsors or money in reserve where you can do what you say you are going to do. If you can't, then don't!
3. Leave yourself an out.?If you are the driver, seat time and exposure is so critical to your career. If you are left sitting on the sidelines not earning a paycheck, you are also not getting that all valuable seat time. You are also not staying in the headlines (for the right reasons).?Have a contingency plan.?Make sure you have sponsors that, if possible, will follow you to another team that can provide you a job. If you are the race team, make sure you have an out if the sponsor leaves you high and dry. How embarrassing and demoralizing is it to have to lay off people and shutter a race team because you didn't do your job?
4. Don't put all your eggs in one basket! One of the major issues with the A.J. Foyt Racing / Tatiana Calderon situation is that there was one sponsor for that racing effort. Everything relied on that mutually agreed upon commitment. And when things started falling apart, it took down two drivers and a race team. The only one that did not suffer was ROKiT. As a side note, ROKiT as an associate sponsor on a second team with A.J. Foyt. Luckily the other sponsor on that car was enough for that driver and team to finish out the IndyCar season.
5. Look out for number one.?Loyalty is something that is long gone from the motorsports industry. Learn to be hard hearted and focus on yourself. After all, racing is a business first and foremost. In this day and age, the driver with the money and connections will survive. If you don't have the money, learn how to find it - and keep it. If you don't have many connections, start networking and promoting yourself - now! Long gone are the days when the race team will do whatever to keep you as a driver. They are interested in keeping their team in business - with or without you. As it is, you could pay the ultimate price for the team and the sponsor being less than prepared for what they have committed to. After all, time is not a driver's best friend, and neither is absence from the spotlight.

So this is an extreme case, but a very important one to learn from. And granted, hindsight is 20/20. If we knew then what we know now we would have never entered into this agreement. Right? Even if you are not at a racing level that requires the type of funding that an IndyCar team requires, the lessons apply to any level of racing or business transaction. Beware at all times, and as the saying goes, "Fool me once, shame on you. Fool me twice, shame on me."

If you like what you read, please let me know and if you want to know more, reach out and let's talk. Until then, I will see you around the track.