SBD/May 24, 2011/Marketing and Sponsorship

Lance Armstrong's Marketing Portfolio Excels Despite Reports Of PED Use

Nike, A-B both offer support to Armstrong after latest allegations
Lance Armstrong's business portfolio is "stronger than ever" despite mounting speculation that his "golden name is getting smeared by the day and that his strong business empire is slowly crumbling," according to Darren Rovell of CNBC.com. Two former teammates in recent days have spoken "out against him" regarding his alledged use of performance-enhancing drugs -- including Tyler Hamilton during a highly publicized appearance on CBS' "60 Minutes" -- and a federal investigation into Armstrong's alleged use continues. But Armstrong's sponsorships are "even more lucrative" now than during his cycling career because he "lent his name to smaller companies, like Honey Stinger and FRS, for an equity stake, instead of a one-time fee." In addition, his Nike Livestrong line "has grown from 80 million rubber bracelets sold to a significant business of apparel and shoes" that is expected to hit $75M this year. Nike Dir of Media Relations Derek Kent: "Our relationship with Lance remains as strong as ever." Rovell noted as of now, Armstrong's business "has been as bulletproof as his adamant responses that he never took performance enhancing drugs" (CNBC.com, 5/23). In addition to Nike's support, a rep for Anheuser-Busch said that Armstrong "will continue to be a spokesperson for Michelob Ultra" (HOLLYWOODREPORTER.com, 5/23).

MELLOW YELLOW? In Philadelphia, Rich Hofmann writes under the header, "Does Armstrong Controversy Taint Livestrong?" The "power of celebrity in our culture is often derided, and for good reason," but Armstrong was different because "he used his celebrity for something greater." Through Livestrong and his cycling success, Armstrong "inspired people on an individual level, people fighting against a terrible disease, and he created this great charitable edifice as well." But Hofmann adds, "What if the fuel for his celebrity was enriched by deceit? The great cause is still great and the good works are still good -- but what happens if another grand jury brings another indictment against another sporting icon? ... The yellow wristbands make this one different" (PHILADELPHIA DAILY NEWS, 5/24).
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