Coca-Cola Red Flags its Relationship with the NHRA

This critical incident describes a dilemma faced by the National Hot Rod Association (NHRA) and its president, Glen Cromwell. On August 12, 2020, the Coca-Cola Company accused the National Hot Rod Association (NHRA) of a material breach of the sponsorship agreement between the two parties. As NHRA president, Cromwell knew the venerable relationship was on shaky ground. The Covid-19 pandemic had caused numerous race cancellations and postponements. Cromwell, however, had not anticipated Coca-Cola, with U.S. sponsorship spending approaching $300 million, would suddenly terminate the long-time partnership. Without the sponsorship revenue, the NHRA faced a challenging financial situation. On September 21, 2020, the NHRA took legal action against Coca-Cola. Students are asked to evaluate the situation from both organizations’ perspectives and decide if they support the legal action taken by the racing series.