Scandal may hurt Livestrong

2010-08-03 20:02

New York - Lance Armstrong has overcome cancer, rival cyclists and nagging allegations of doping to become one of the world's best-paid athletes and a sought-after pitchmen.

He's also turned the Lance Armstrong Foundation, better known as Livestrong, into one of the top 10 groups funding cancer research in the United States. Since its inception in 1997 it has raised more than $325m, and become synonymous with the 72 million yellow bracelets it has sold bearing the Livestrong name.

The Armstrong brand is one of the best in sports.

Yet everything the seven-time Tour de France champion has created is now threatened by a new opponent: a federal investigation. Philanthropy experts say the foundation, in particular, is at risk of losing future donations if its namesake and chairman is dragged down in scandal.

Federal prosecutors have been investigating pro cycling since Floyd Landis, a former Armstrong teammate who was stripped of his 2006 Tour title, admitted this spring that he used performance-enchancing drugs. Landis also accused many others in the sport, including Armstrong, of doping too.

Last week, prosecutors subpoenaed documents from a 2004 case in which a Texas company with business ties to Armstrong tried to prove he used drugs in order to avoid paying him a performance bonus.

Armstrong has long denied - vehemently - that he used performance-enhancing drugs, and he has not been charged.

The foundation has not been accused of wrongdoing, but it is so closely linked with Armstrong it could be hurt.

"They are not going to be able to thrive if the person who is the spirit behind it is in trouble," said Ken Berger, CEO of Charity Navigator, which analyzes more than 5 000 nonprofits in the US "It is just going to devastate them.

Just the mere juxtaposition of Armstrong with prosecutors seems to already be harming his image.

Although the investigation is ongoing, public opinion may be starting to shift. Words such as "scandal" and "lie" and "steroids" are now the most popular phrases used to describe Armstrong, according to Zeta Interactive, a marketing firm that tracks online sentiments.

In 2008, when Armstrong was the fourth-most talked about athlete, words used to describe him included "hero" and "legend" and "Nike" - a reference to one of his main sponsors.

"Anyone or anything associated with Lance Armstrong should be very worried right now," Zeta Interactive CEO Al DiGuido said. "He has faced these kinds of allegations before, but the fuel really seems to be kicking in this time."

Fifty-eight percent of online sentiments about Armstrong remain positive, according to Zeta's rating system, but that's down from 86 percent at the beginning of July and the first time that it has fallen below 60%.

Armstrong still has legions of fans too, including 2.6 million Twitter followers that track his musings on racing and life.

And his sponsors, for now, are standing behind him. Armstrong's endorsements include deals with Nike Inc., RadioShack Corp., Oakley sunglasses, 24-hour Fitness, Nissan, Anheuser-Busch InBev's Michelob Ultra, FRS energy drinks and Trek bikes. Several of them also support Armstrong's foundation, which he started after he beat cancer.

FRS, a privately held company, is expanding its commitment to Armstrong and the foundation. It plans to feature Armstrong, an FRS investor and board member, in national television ads this October. FRS also recently agreed to support the foundation for at least three more years.

"We believe very strongly in Lance and his cause," said FRS CEO Carl Sweat. "The work he has done to get the (cancer-fighting) movement where it is much bigger than what he has accomplished in cycling."

As in his cycling career, Armstrong appears to be past his prime as a pitchman. That means the stakes aren't quite as high for his personal fortune as they were for golfing superstar Tiger Woods, whose marital infidelities cost him lucrative deals with Accenture LLP and AT&T Inc.

Woods remained the top-paid athlete on a recently released Forbes list showing him with earnings of $105m during the year ending in June. Armstrong was the 15th highest-paid athlete in the same period with estimated income of $20m. That's down from $28m in the year ending June 2005, just before he won his seventh straight Tour de France.

Armstrong was never going to make as much money as Woods or basketball star LeBron James because his sport is more of a niche, said John Sweeney, director of sports communication at the University of North Carolina at Chapel Hill's School of Journalism and Mass Communication. What's valuable about him is his personal story of overcoming cancer.

"Lance is an inspirational story. He's the man who beat cancer and then won the Tour de France," he said. "I can't think of too many people who you'd say transcended into an inspirational category."

Armstrong's story still resonates with so many people that his foundation sold out of all 130 000 bracelets that it took to France in July, a 30% increase from last year, Ulman said.

Those $1 bracelets, meant to be a testament to courage and determination, could become a symbol of shame if it's proved Armstrong cheated, said DiGuido, of Zeta Interactive.

Armstrong says that won't happen because the allegations are unfounded.

"No one on our foundation team is going to be distracted by this witch hunt," Armstrong said in a statement to The Associated Press.

The Lance Armstrong Foundation, which adopted Livestrong as its operating name last year, ranks among the largest cancer charities in the US.

It was the nation's 10th largest cancer foundation, based on revenue in 2008, according to the most recent data from research firm GuideStar. The 82-employee foundation, which is based in Austin, Texas, grew even larger last year, with $41.8m in revenue, up 30% from 2008, according to its tax records. And through the first half of this year, donations were up 25% from the same time last year.

"The foundation is as strong as it has ever been, just not financially, but in terms of the impact that we are having," said foundation CEO Doug Ulman, who remains in regular contact with Armstrong. "Lance has been, and continues to be, this beacon of hope and inspiration for millions of people around the world."


  • Mike T - 2010-08-03 20:35

    I wear a yellow wrist band and always will! As far as I am concerned Lance is the greatest cyclist of all time and I believe this "witch-hunt" is a matter of jealousy as people cannot believe that a former cancer sufferer could win the Tour 7 times. I suffered from the same disease as he did, and he will remain my mentor and hero forever. Lance you are the greatest!!!

  • Ken J May - 2010-08-03 20:38

    The man has done so much for so many and inspired so many hopeless soles but now some stupid analist wants to not only kill the man but also kill the brand! How F@#K-UP are they?

  • Lancet - 2010-08-04 08:28

    The lesson is clear: never become too successful, or every loser will turn on you. 99.9 % of Lance's accusers have achieved nothing worthwhile in life, yet they are eager to get in on the action by devoting their lives to destroying him and all he has achieved in life. By the way, what "scandal"? - Does it mean that if a bunch of idiots keeps repeating the same old tired baseless accusations, it suddenly turns into a scandal? And don't come with that pathetic adage of where there's smoke, there's fire. In reality it's a case of the more smoke there is, the less fire there is - a clean burning fire causes little smoke compared to a smouldering one that is constantly fanned by someone.

  • Truth - 2010-08-04 10:22

    I always laugh when I see people getting so emotional, and how it clouds their judgment. The truth will come out eventually. If he's innocent, that's great. If he's not, then that's just life. But if he's found guilty, I hope all you die-hard Lance fans are prepared to admit that he's not as great as the adverts and books and tv programs have made out to be. And just because he had cancer, it doesn't make him untouchable.

  • Doep - 2010-08-04 11:57

    Boy oh boy is Lance going to have a field day when he sues his accusers for slander after this whole farce is over!

  • Troll - 2010-08-05 13:05

    It is so sad to see adults fawning in child-like adoration and blind adulation of another human being. Surely you should be welcoming this investigation to prove once and for all that la is innocent? As for the greatest cyclist of all time, that title belongs to Eddy Merckx, who entered and won many more races and grand tours than just the TdF. In fact, even the Exalted Great One said as much himself.

  • Di B - 2010-08-23 11:37

    What a waste of effort and money. Lance has not t-e-s-t-e-d positive or caught with drugs. Lance is incredible and no-one can take away what he has achieved, sports wise or personally, drugs or no. Landis, the RAT, sure has N-O-T-H-I-N-G to be proud of and does not know how to spell sportsmanship. He deserves to have lost his crown and public respect.

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