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Trek, Nike, Anheuser-Busch Cut Ties With Armstrong

Journal Sentinel, October 17, 2012

By Don Walker

In 1998, one year before he won his first Tour de France, cyclist Lance Armstrong, cyclist Lance Armstrong signed a long-term deal with Trek Bicycle Corp., the Waterloo-based bike company.

As Armstrong continued to pile up victories in the Tour while riding a Trek, an executive was asked about the company's marketing plan.

"Quite simply," the executive said, "Lance is our marketing plan."

Not any longer. On Wednesday, Trek, which made millions with its long affiliation with Armstrong, announced it was ending its relationship with the seven-time Tour winner.

"Trek is disappointed by the findings and conclusions in the USADA report regarding Lance Armstrong. Given the determinations of the report, Trek today is terminating our long-term relationship with Lance Armstrong. Trek will continue to support the Livestrong Foundation and its efforts to combat cancer."

Trek's announcement, which came late Wednesday afternoon, ended a day in which several companies, including Nike and Anheuser-Busch InBev NV, announced they were cutting ties with Armstrong.

Nike, which has a reputation for staying with its fallen sports stars through scandal, issued a statement early in the morning. Anheuser-Busch InBev NV soon followed suit, saying it was ending its partnership, as did Giro Helmets.

Perhaps anticipating the fallout from the U.S. Anti-Doping Agency report, Armstrong said he was stepping down as chairman of Livestrong, through he plans to serve on the charity's board.

"This organization, its mission and its supporters are incredibly dear to my heart," Armstrong said in a statement obtained by The Associated Press. "Today therefore, to spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship."

Nike's move was somewhat surprising, given that it expressed support for Armstrong last week. Nike has had a reputation for sticking with its superstars, including basketball superstar Kobe Bryant, who was charged with sexual assault in 2003, and golfer Tiger Woods, who was accused of infidelity three years ago.

"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 said in a statement. "Nike does not condone the use of illegal performance enhancing drugs in any manner."

Armstrong has continued to say he has never tested positive for a performance enhancing substance. The USADA report accused Armstrong of operating the "most sophisticated, professionalized and successful doping program that sport has ever seen."

Anheuser-Busch InBev NV said it would not renew its contract with Armstrong when it expires at the end of the year. Armstrong endorses Michelob ULTRA beer.

Trek, Nike and Anheuser-Busch all said it would continue to support Livestrong. The charity is known for its bright yellow bracelets worn by supporters.

Armstrong's deals with Nike and Anheuser-Busch are worth millions of dollars a year. According to Forbes magazine, Armstrong earned $21 million two years ago, making him one of the highest-paid athletes in the world.

Like Nike, Trek's decision to sever ties with Armstrong came after an initial statement of support. In August, after the USADA said it would vacate Armstrong's titles, Trek issued a statement saying it would continue to support Armstrong.

"Trek has had a long-standing relationship with Lance Armstrong and the Livestrong Foundation; as an individual he has made remarkable contributions to the sport of cycling and the fight against cancer. We are hopeful that Lance will continue to compete and make a positive contribution to the sport. Trek plans to continue to support Lance's athletic endeavors and his efforts to combat cancer."

Jim Andrews, senior vice president for content strategy at IEG, a major sponsorship consulting firm, said he was dumbfounded by Nike's decision to pull away.

"It came so close to their statement last week supporting him," Andrews said. "Something happened internally that we are not privy to."

Shortly before Trek made its announcement, Andre Mika, executive vice president for creative at TBA Global, a marketing engagement firm, predicted more companies would back away from Armstrong.

"His resignation from Livestrong as well as Nike's decision is a defining blow for any product/brand ties, and until Lance sits down with the media and public to admit what happened and offer an apology, his days as an endorser are over."