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Nike Shoe Drops as Lance Armstrong Resigns From Livestrong [Updated]

Posted by Mark J. Miller on October 17, 2012 10:29 AM

A week after the United States Anti-Doping Agency let loose a thousand pages of painful details about how Lance Armstrong and pretty much every other top American bicycle pro of the last decade doped, Nike has finally released its own news on the matter.

Following a protest at its Beaverton, Ore., HQ yesterday, Nike this morning confirmed it's dropping the athlete with two terse paragraphs, serving up a serious financial blow to Armstrong even though still continuing to support the Livestrong philanthropic brand he founded. The sports giant just released a limited-edition collection to celebrate the 15th anniversary of Livestrong, which promotes cancer awareness and healthy living, as part of a licensing deal that will continue.

Just as Joe Paterno's name was scrubbed from the Nike campus, Armstrong will also see his name removed from the fitness center on the Nike campus in Oregon, as CNN is reporting that Nike will remove his name from the building. In tandem with Nike's news, the disgraced cyclist also announced this morning that he was stepping down from his role as chairman of Livestrong.

The news prompted a mass exodus from Team Armstrong. On the heels of Nike's announcement, sponsor Anheuser-Busch announced it's dropping the cyclist when his deal as a Michelob Ultra brand ambassador ends on Dec. 31st. The Giro brand, which produced a custom $15,000 bike helmet for Armstong's 2010 Tour de France race and a branded line of helmets, also quit Team Armstrong, along with the Honey Stinger brand and, as the Wall Street Journal reports, RadioShack .

In all, Bloomberg estimates that Armstrong stands to lose $30 million as his sponsors flee.

"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," Nike's press release stated about the athlete, which the brand sponsored along with the U.S. cycling team. "Nike does not condone the use of illegal performance enhancing drugs in any manner."

Armstrong's statement on his resignation from Livestrong was announced on his Twitter feed, where his bio still calls him "7-time Tour de France winner," which the International Cycling Union may overturn by the end of this month:

"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."

Losing Nike and Livestrong in one fell swoop (or swoosh) must have particularly stung for the cyclist, whose lawyers have no doubt been dealing with his numerous endorsement contracts since the USADA report came out last week. And hours after Nike's announcement today, other sponsors including Anheuser-Busch announced that they're distancing themselves from Armstrong, too. As USA Today points out, not all sponsors will make an announcement, but just stop using Armstrong.

"We have decided not to renew our relationship with Lance Armstrong when our current contract expires at the end of 2012," said Paul Chibe, VP of US marketing for Anheuser-Busch, which had used Armstrong in ads to sell its Michelob Ultra beer. Like Nike, Anheuser-Busch will stand by the Livestrong foundation. Why?

As the Wall Street Journal writes about Nike's involvement with Livestrong,

Analysts say Livestrong branded products represent a tiny portion of Nike's $25 billion in revenue. Clothes and shoes with the Livestrong emblem were mostly sold through Nike stores and its website, rather than the sporting goods stores that sell most of Nike's gear, with all profits going to the foundation. "I'd be surprised if it the Livestrong brand was as big as $100 million," said Matt Powell, an analyst at consultancy SportsOneSource. "The Livestrong brand was more about the foundation and fighting cancer than it ever was about Lance Armstrong."

The sponsor exodus comes a week after the USADA released its report, when Nike and all of Lance’s other sponsors appeared to collectively shrug. Nike, in fact, re-released a press release that it had put out this summer about how it was sticking with Lance. But things changed in the last week as the brand grappled with its association with Armstrong, and finally stripped its hallowed swoosh from Armstrong's personal and professional, if not philanthropic, brands.

Some athletes that Nike has stood be in rough times include Kobe Bryant when he was on trial for rape, Michael Vick (dropped then reinstated) and Tiger Woods when he went through his extremely public divorce that resulted from his numerous extramarital relationships. They're just lucky they didn’t dope.

Below, WSJ.com debates the the issue of sponsor slip-ups damaging a brand, plus some of Nike's past campaigns featuring Armstrong — the first one of which deals with doping:

Comments

Mrs. Jolie Pitt United Kingdom says:

Every major cyclist and athlete is on SOME form of substance, so Lance Armstrong did nothing wrong. Everyone was on an equal playing field ... and lest we forget, he never tested positive!!

October 17, 2012 01:30 PM #

Montgomery United States says:

Yes an equal playing field of cheaters... Somehow yes that seems fair ... To the cheaters.  But not to the ones who weren't cheating but were cheated out of a fair chance to win....

October 18, 2012 03:44 AM #

Mike United States says:

The last paragraph says it all for me.  Our collective sense or right and wrong as a society is so out of whack.  Doping is wrong, and Armstrong should be stripped of his wins.  But when you compare what he did to the actions of  Michael Vick and Kobe Bryant - it doesn't come close.  Those two don't deserve to continue to compete in professional sports and be afforded the millions of dollars they get in endorsements.  Yet Lance Armstrong suffers more dyer consequences for taking performance enhancing drugs.  I don't get it.

October 18, 2012 11:07 AM #

hurtigt lån United States says:

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October 22, 2012 03:17 PM #

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