News24

Armstrong faces financial loss

2012-10-23 12:11

Paris - World cycling's decision to strip Lance Armstrong of his record seven Tour de France wins could cost the shamed US rider millions, amid calls for tougher action to restore the sport's shattered image.

The International Cycling Union (UCI) on Monday gave its backing to a damning US Anti-Doping Agency (USADA) dossier that placed the Texan at the heart of the biggest doping programme in sport, erasing his record back to August 1, 1998.

But as the 41-year-old's major triumphs were scrubbed from the history books and officials vowed to up the fight against banned substances, moves began to recoup his prize money, bonuses and other pay-outs.

Tour de France director Christian Prudhomme on Monday said they would seek the repayment of nearly 2.95 million euros ($3.8 million) from Armstrong's successes in cycling's most gruelling and celebrated race between 1999 and 2005.

During Armstrong's dominant period, Tailwind Sports, the parent company of his US Postal Service team, took out a policy with sports insurance firm SCA Promotions, paying a premium to cover bonuses paid for his Tour victories.

SCA withheld a $5 million bonus due after Armstrong's sixth Tour win in 2004 because of doping allegations in Europe. The rider took the Dallas, Texas, firm to court and was awarded the cash, plus $2.5 million in legal fees and interest.

The firm's lawyer, Jeffrey Dorough, told AFP: "Mr Armstrong is no longer the official winner of any Tour de France races and as a result it is inappropriate and improper for him to retain any bonus payments made by SCA."

The Velonation cycling news website reported that SCA paid out a total of $12 million in bonuses to Armstrong over the years. Dorough said he could only confirm the lower figure but added: "Any sum that was paid by SCA would be in play."

Elsewhere, Britain's Sunday Times newspaper has said it is considering legal action against Armstrong to recover money spent defending a defamation case over doping allegations, which was settled in 2004.

The settlement was not disclosed but reports have suggested the case cost the weekly newspaper one million pounds ($1.6 million, 1.2 million euros).

Armstrong, who reportedly has an estimated net worth of $125 million, has already taken a financial hit, as high-profile sponsors including sportswear firm Nike have dropped him from marketing campaigns.

Business magazine Forbes said on its website on Monday that Armstrong could lose $15 million a year in endorsements and speaking fees.

On the legal front, he could yet fact court action for perjury after swearing on oath that he never doped. If any charge is pursued, the maximum penalty is up to 30 years in prison and a fine of up to $1.5 million.

The Armstrong case has cast a dark cloud over world cycling, with its most recognisable star fallen from grace and the USADA dossier outlining the extent and scope of the use of banned substances in the sport in the late 1990s and early 2000s.

Current and former cyclists have spoken of how they have felt deceived by Armstrong, who battled back from life-threatening cancer to stage what was billed at the time as the greatest comeback in sport.

That Armstrong deceived everyone for so long has also hit the credibility of the UCI, who have been accused of, but strongly deny, turning a blind eye to his activities and even accepting donations to cover up positive tests.

The head of the World Anti-Doping Agency, John Fahey, said on Tuesday that the sport's administrators had to take responsibility for that time when "everybody doped", despite UCI chief Pat McQuaid's insistence that only riders were to blame.

"Is that period gone? That's something which I think the jury is out on and I think UCI are meeting this Friday to consider a number of aspects, including what their response must be, going forward," the Australian told ABC Radio.

In a separate interview with Australia's Fox Sports, Fahey added that cycling would only regain credibility when the senior officials on watch during the "debacle" were removed.

"I don't think there's any credibility if they don't do that and I think they need to get confidence back into the sport, so that its millions of supporters around the world will watch and support the sport going forward," he added.

AFP

Comments
  • vernon.annandale.7 - 2012-10-23 12:33

    amid calls for tougher action to restore the sport's shattered image? Has this sport not always had a bad rep for failed drug test? Don't think there is much of a image to restore

  • michael.hughes.165470 - 2012-10-23 12:37

    Please note - I'm not a supporter of Armstrong (and don't give a flying f**k about cycling in general), but this is an interesting legal issue. If sponsors etc. demand money back from Armstrong, will they in turn return all the cash to consumers who purchased products from them during that period based on the fact that they were sponsors? In other words, if Armstrong financially benefited improperly from his fraudulent victories, did the companies that sponsor him benefit improperly from increased sales as well? Can consumers demand refunds on this basis? Interesting...

      andrew.mufema - 2012-10-23 13:16

      Michael i think you dismally failed to comprehend the substance of this article. Its not the sponsors who want their money back but its the insurance company that got defrauded out of millions of dollars in payouts on policies taken out by Armstrong on the premise that he would win consecutive TDF titles fairly and cleanly!

      michael.hughes.165470 - 2012-10-23 13:28

      Thanks Andrew - strangely enough, I do actually (admittedly after much angst and concentration) comprehend the article. My comment was made generally, based on a number of other current articles/comments discussing the fact that a variety of sponsors were looking to recover money from Armstrong. It was a matter of convenience that I posted my comment to this article, as I just happened to consider the issue while reading this article. Next time, to avoid any confusion on the part of other readers, I'll be sure to ensure that my posts directly relate to the substance of the article and nothing else. I would hope that other contributors do likewise, and also post replies to comments that talk only to the substance of the comment, and do not introduce any other extraneous, pedantic issues.

      richard.barnes.3914 - 2012-10-24 12:02

      I don't see how Armstrong's doping taints the products that his name sold. The basis of compliance with standards is that the product meets safety requirements, is fit for purpose and offers redress, i.o.w. if the product breaks within the warranty period, you can return it. Armstrong doping does not affect any of those factors. Nike customers are buying sports gear, not moral purity. If the gear performs to the expected requirements, then they have got their money's worth. On what basis could they return the product and claim a refund?

  • martin.gee.godfrey - 2012-10-23 12:44

    Surely there should be an enquiry into the UCI's role in the doping scandal. If so many people allegeldy knew that Armsrong was doping, how then did the UCI NOT know? Are they guilty of covering up too? I think the rot goes a lot deeper than just Armstrong.

      martin.gee.godfrey - 2012-10-23 14:04

      @watchman - My other issue is that they can't retrospectively prove doping based on testing protocols used in the past compared to the advanced testing protocols today. If a concoction (drug) was not deemed to be illegal in 1995 but is now, and a cyclist used it then (and won), how can he be penalised under todays rules? As you so rightly say, one man is being the fall guy for a host of others who have knowingly used illegal substances. I also think that even without the illegal substances that Armstrong allegedly used, he may not have won but he probably would still have been up there with the leaders. Sadly now, we'll never know.

  • andrew.mufema - 2012-10-23 13:23

    This guy built a legacy by winning dirty at all cost ... he was the bully and the mastermind who pressured teammates to also dope in order to assist him to win , he deserves all thats coming to him. The fact that he is arrogant and still denies everything in the face of damning evidence makes it hard to sympathise with him!

      roy.wadhams.1 - 2012-10-23 13:59

      Agree with everything you say Andrew. Lets hope that all steps are taken to recover every cent he "earned" because of his arrogance.

  • Khetha Hlophe - 2012-10-23 13:23

    I have 4 nikes in my wardrobe inspired by him.\r\nNow that my inspire doped,can they pay me back and take the shoes as well?

      richard.barnes.3914 - 2012-10-24 12:36

      Do the shoes perform as expected? If so, the product is not faulty and there is no basis for returning it. If you expected to become a top cyclist purely because you had the same shoes as the then champion, then think of the purchase price as a naivety tax.

  • Pete7930 - 2012-10-23 13:28

    drugs or no drugs, he pedaled his way to victory in those races!

  • Jordi - 2012-10-23 13:42

    So who are all the runner ups of the TDF during the period of his wins and will they get the prize money that is deserved to them ?

      johan.blertsie.cilliers - 2012-10-23 14:21

      The runner ups (20 of them if you only take podium places into account), were all already directly linked to doping scandals themselves

  • leonard.w.gray - 2012-10-23 14:41

    With fraud comes damages caused by such fraud. Armstrong is a sitting duck for such legal action. Him not defending the doping allegations was financial suicide. For me, this is another clear indication of his guilt.

  • Werewabbit - 2012-10-23 15:07

    If everyone a the top end of the sport was doping, would that not be a fair contest then?

  • phae.rayden - 2012-10-23 15:10

    Apologies to James Clark but this Tour de Farce has overtaken yours.

  • viva.lebok - 2012-10-23 20:14

    This is ridiculous. If everyone was doping then why only attack Armstrong. Amstring is stripped so the second guy gets the top prize who was also doping. Where is the logic in that. If they want to rectify the situation they strip everyone or noone and move forward.

      nomsa.shabangu.79677 - 2012-10-24 18:34

      I blve ths guy had ova a hundred teammates and only 11 cme 2 testify agnst him.isn't tht a\r\na case of plain jealousey.bsds,al riders we're using\r\ndrugs as his former teammate said,so tht shuld be\r\na level playing fit

  • frans.dutoit.52 - 2012-10-23 22:09

    Sover het niemand nog gese dat hy nie in n posisie was om die verbode middels van lance ontvang te weier nie, maw lekker saam met alles gegaan toe raak iets suur, almal wat geld van lance ontvang het behoort saam met hom te hoes.en laastens as die ding sover terug as die laat negetigs ondersoek is moet hulle maar dalk maar nog n paar dekades terug gaan, dalk moet greg le mond en eddie merxs ook hulle medaljes teruggee, die vraag is eintlik wie was ooit eintlik skoon?

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