Wednesday
Oct172012

In Tiger Woods Fashion, Marketers Put Brakes On Alliances With Lance Armstrong

By Barry Janoff

October 17, 2012: Nike, home of LeBron James, Jordan Brand, Kobe Bryant and other global icons, is no longer the home of Lance Armstrong.

The sports footwear, apparel and lifestyle brand, which has been aligned with Armstrong since 1996, led a fire drill evacuation of marketing partners that have severed ties with the retired pro cycler reminiscent of the scene in 2010 when Tiger Woods lost more than $40 million in endorsement deals.

The movement is a direct result of a U.S. Anti-Doping Agency report released last week that detailed the widespread used of prohibited performance-enhancing drugs by Armstrong and teammates, which included his seven consecutive Tour de France wins from 1999-2005.

A bevy of other partners, including RadioShack and Anheuser-Busch's Michelob Ultra, also are distancing themselves from their alliances with Armstrong. Michelob, which signed with Armstrong in 2009, said it would not renew its deal when it expires at the end of the year.

Armstrong has also lost deal's with FRS energy drink, Giro, Honey Foods and Trek Bicycles. Armstrong earned about $15 million from endorsements in 2011, according to industry analysts.

The marketing exodus is the largest for one athlete since Woods' personal life went public in 2010 and he was dropped by companies including AT&T, PepsiCo's Gatorade, Tag Heuer and Gillette; General Motors had previously ended its alliance with the pro golfer. Over the past year, Woods has been able to sign some new deals.

Nike Golf stayed with Woods following his scandal and Nike remained with Bryant in 2003, following a sexual assault complaint against him. Bryant lost an estimated $10-$15 million in endorsement deals from such companies as McDonald's and Nutella, and had ad campaigns either pulled or withheld from marketers including Spalding, Coke and Nike. Bryant's case was eventually settled out of court.

Nike dropped NFL quarterback Michael Vick following his dog-fighting scandal but has since returned as a marketing partner.

Armstrong himself has resigned his position as chairman of LiveStrong, which he founded and which has raised some $500 million to raise awareness and find a cure for cancer. The organization is moving ahead with 15th anniversary festivities planned for this weekend. He is expected to remain on its 15-member board.

The USADA, whose report includes sworn statements from 26 witnesses, including 11 former teammates, has banned him from cycling for life and decreed that 14 years of career results, including the Tour de France wins, be erased.

Armstrong has vehemently denied the use of any prohibited substances, claiming that he never tested positive in upward of 600 drug tests he took during his pro career.

"Due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade, it is with great sadness that we have terminated our contract with him," Eugene, Ore.-based Nike said in a statement. "Nike does not condone the use of illegal performance enhancing drugs in any manner."

Nike, which has been most closely aligned with Armstrong via its yellow LiveStrong wristbands and a line of LiveStrong shoes and clothing, stressed that it "plans to continue support of the LiveStrong initiatives created to unite, inspire and empower people affected by cancer."

Nike also said that it plans to remove Armstrong's name from its Fitness Center on the Nike campus.

Anheuser-Busch echoed Nike's statement with one of its own.

According to Paul Chibe, vp U.S. marketing for Anheuser-Busch, "We have decided not to renew our relationship with Lance Armstrong when our current contract expires at the end of 2012. We will continue to support the Livestrong Foundation and its cycling and running events."

Nike initially supported Armstrong but seemingly left the door open for the move that ultimately ended its relationship with him. "Lance has stated his innocence and has been unwavering on this position. Nike plans to continue to support Lance and the Lance Armstrong Foundation, a foundation that Lance created to serve cancer survivors," Nike said in a statement last week. However, the company added, "We are saddened that Lance Armstrong may no longer be able to participate in certain competitions and his titles appear to be impacted."

His Twitter site, which has more than 3.7 million followers, and his Facebook page, with more than 2.4 million likes, still describe him as the "7-time Tour de France winner."

"To spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship."

“In 1996, as my cancer treatment was drawing to an end, I created a foundation to serve people affected by cancer," Armstrong said in a statement. "It has been a great privilege to help grow it from a dream into an organization that today has served 2.5 million people and helped spur a cultural shift in how the world views cancer survivors. This organization, its mission and its supporters are incredibly dear to my heart.

“I have had the great honor of serving as this foundation’s chairman for the last five years and its mission and success are my top priorities. Today therefore, to spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship."

LiveStrong said that vice-chairman Jeff Garvey would now serve as chairman.

Armstrong's resignation is not expected to affect LiveStrong's naming rights deal with LiveStrong Sporting Park, home of Major League Soccer's Sporting Kansas City, which were donated for free in 2011 by the Lance Armstrong Foundation. The team has been working to support the Foundation by donating a portion of ticket sales and stadium revenues and via other efforts to raise money and awareness.

"We stand by the LiveStrong message," said Rob Thompson, evp-communications for Sporting Kansas City. "We have no statement [regarding the situation with Lance Armstrong]."

At the time the deal was unveiled, team executives said their plan was to raise a minimum of $7.5 million over the next six years.

“Long before he became a household name, Lance Armstrong created a foundation to serve others facing the same fears and challenges he struggled to overcome as a result of his cancer diagnosis,” Doug Ulman, LiveStrong president and CEO, said in a statement. "Today, thanks to Lance’s leadership, that foundation has had the privilege of raising close to $500 million to serve people affected by cancer . . . We look forward to celebrating 15 years of progress with Lance and his family this weekend and recommitting ourselves to the work of the cancer community for the years ahead.”

The USADA said it undertook extensive moves before releasing its report last week regarding Armstrong and others who raced as part of the U.S. Postal Service Team.

According to a statement from Travis Tygart, CEO for USADA, "The USPS Team doping conspiracy was professionally designed to groom and pressure athletes to use dangerous drugs, to evade detection, to ensure its secrecy and ultimately gain an unfair competitive advantage through superior doping practices."

Back to Home Page