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Armstrong Is Dropped By Nike And Steps Down As Foundation Chairman

The New York Times, October 17, 2012

By Ken Belson and Mary Pilon

His career as a competitive athlete already in shambles from a doping scandal, Lance Armstrong fell further from grace Wednesday. He announced he was stepping down as the chairman of Livestrong, his cancer foundation, and Nike, the sports brand most closely associated with his racing days, was among several companies severing ties with him.

Armstrong’s resignation from the foundation came a week after the United States Anti-Doping Agency made public its evidence in a doping case against him, saying he was at the center of an organized doping program on his Tour de France-winning teams. Armstrong said in a statement that he wanted “to spare the foundation any negative effects as a result of controversy surrounding my cycling career.”

Nike’s decision to abandon its deal with Armstrong was more curious because the company had stood by him for years as he fended off doping accusations. It publicly came to his defense only last week. Nike has a record of standing by athletes whose reputations have been damaged, Tiger Woods and Kobe Bryant among them, even as other sponsors shunned them. The company bet heavily on Armstrong years ago as he battled cancer, and it embraced him so wholly that it named a building after him on its campus in Beaverton, Ore.

Two weeks ago, before Usada released its report, Armstrong attended a Nike event in Portland and met Phil Knight, the company’s chairman.

But in a sign of how tattered Armstrong’s reputation has become, Nike all but accused him of hiding information from the company. “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,” the company said in a statement.

“Nike does not condone the use of illegal performance enhancing drugs in any manner.”

Nike declined to discuss why it made such an abrupt about-face after a decade and a half of working with Armstrong. On Tuesday, the company called Armstrong’s longtime agent, Bill Stapleton, and told him it was ending its agreement with Armstrong, thought to be worth millions of dollars. The company did not leave room for negotiation.

“We were Nike family,” Stapleton said in an interview.

Nike was not the only sponsor to abandon Armstrong on Wednesday; several others followed suit, and it could cost him millions.

Anheuser-Busch said that it would not renew its sponsorship with Armstrong. RadioShack ended its personal services contract with Armstrong, a person with knowledge of the deal said. Trek, Armstrong’s bicycle maker, Giro, the helmet manufacturer, and FRS, a sports drink maker, are ending their relationships with Armstrong, according to published reports. Honey Stinger, an energy bar maker, also dropped Armstrong.

Oakley, the sunglasses maker, said it was reviewing its relationship with Armstrong. Another sponsor, Johnson Health Tech, a sports equipment maker, reaffirmed its partnership with Livestrong.

Nike said it would continue to support what it termed the “Livestrong initiatives,” though it did not say how. What is clear is that Armstrong’s value to the world’s largest sporting goods company has diminished. Armstrong, who retired from competitive cycling last year, was stripped of his seven Tour titles when he chose not to contest the Usada doping accusations. He has also been barred for life from competing or having any official role with any Olympic sport or other sport that follows the World Anti-Doping Code. As a result, he was less likely to help Nike sell its co-branded hoodies, shoes and Dri-Fit workout gear.

“The cynical side of me says that they are not making any money off of him and the evidence has piled up so there’s no point in sticking with him,” said Bob Dorfman, who analyzes athlete endorsements at Baker Street Advertising in San Francisco.

Nike stood by Woods and Bryant, Dorfman said, because their controversies were off the field and not directly linked to their performance. Nike cut its ties to Michael Vick, who was convicted of participating in a dogfighting ring, but re-signed him after he returned to the N.F.L.

The allegations against Armstrong undermined his success as a cyclist and prompted a small group to protest outside Nike’s headquarters Tuesday. In recent years, Nike stopped sponsoring Marion Jones and Justin Gatlin, two sprinters entangled in doping scandals.

“When you look at these relationships, the primary factor you choose an endorser for is their performance,” said Jim Andrews, senior vice president at IEG, a sponsorship consultant. “The primary benefit Tiger brings to Nike is his performance as a golfer. When he had his indiscretions, you could decide that he was still going to perform and excuse the character issue. With Lance, you don’t have that avenue because everything he did as a cyclist has been discredited.”

To an unusual degree, Armstrong transcended his racing career because of his well-publicized battle with testicular cancer. He not only survived the disease but also went on to win the Tour, a grueling three-week race. His accomplishments prompted millions of people to buy and wear yellow Livestrong wristbands.

Nike was along for the ride, starting in 1996, when it agreed to endorse Armstrong, who would wear its shoes and gloves. Armstrong said in his book “It’s Not About the Bike: My Journey Back to Life,” which he wrote with Sally Jenkins in 2001, that Nike “didn’t desert me” during his cancer treatment. “As I got sicker, it meant everything.”

Armstrong said that one of the first people he spoke to about his cancer was Scott MacEachern, the Nike representative assigned to cycling in the late 1990s.

While Armstrong chose not to contest the charges against him because, he said, it would have taken too much of a toll on his family, the report by the antidoping agency has affected his foundation. It has raised nearly $500 million since 1997 and plans to celebrate its 15th anniversary in Austin, Tex., this weekend, with nearly 2,000 people expected to attend, including stars like Sean Penn, Maria Shriver and Ben Stiller.

Armstrong, who reportedly is worth $125 million, transferred his duties as chairman of Livestrong to Jeff Garvey, a founding chairman and vice chairman of the foundation. Garvey is a founder of Austin Ventures, a venture capital and growth equity firm with $3.9 billion under management.

While some of Armstrong’s closest confidants — including many of his former teammates — have fallen out of favor with him over the years, Garvey, an avid cyclist, is one of the few people who remain in Armstrong’s inner circle. Armstrong acknowledged him in his book “Every Second Counts,” thanking him for his “unvarnished advice and ever-sure friendship.”

Garvey, who has been involved in the leadership of cycling in the United States for more than a decade, expressed his support for Armstrong after the Usada report was released last week.

The accumulating accusations have helped draw a dividing line between Livestrong supporters and opponents, a trend that continued Wednesday after Armstrong stepped down as chairman.

The blog post announcing the decision on Livestrong’s Web site quickly drew comments from Armstrong’s fans such as, “He is a giant among men!” and “LIVESTRONG not about the bike, or any of the controversy. Nothing can change the fact that it was founded by one of the toughest survivors on the planet. Its mission has always been real.” Thousands also weighed in on Livestrong’s Facebook page, saying that they will continue to wear their yellow wristbands, one of the most popular symbols tied to a nonprofit.

A few, however, were dismayed. “A total fraud,” one person said. “It’s about time this joke of a hero started facing some consequences,” another wrote.

One Web site,, features a petition and donation option for people to support Armstrong. The site identified itself as being paid for by the Restore America’s Voice Foundation, a conservative super PAC, according to data from

“It’s devastating for them,” Daniel Borochoff, founder and president of CharityWatch, a Chicago-based nonprofit watchdog group, said of Livestrong. “They certainly have a steep hill here to climb.”

CharityWatch gave Livestrong an A- grade, fueled by the percentage of its dollars that go toward programming, Borochoff said. Because the foundation derives much of its revenue from royalties and licensing, the concern is the cash infusions could decline as Armstrong’s brand fades, he said.