SBD/October 29, 2012/Marketing and Sponsorship

UCI Asks Lance Armstrong To Return Nearly $4M In Tour De France Purse Money

Armstrong has an estimated net worth of $125M
The Int'l Cycling Union (UCI) BOD on Friday at a meeting in Geneva “asked Lance Armstrong to return the nearly $4 million the disgraced cyclist earned from the seven Tour de France victories that were stripped because of doping,” according to Michael O’Keeffe of the N.Y. DAILY NEWS. UCI’s Management Committee said that it "will not award the Tour de France titles stripped from Armstrong to any other riders, acknowledging in a press statement that a ‘dark cloud of suspicion’ remains over the period between 1999 to 2005, when Armstrong dominated the sport” (N.Y. DAILY NEWS, 10/27). In N.Y., Paul Sullivan noted Armstrong has an “estimated net worth" of $125M. Independent advisers and lawyers said that he is “likely to hold on to most of that wealth -- though he may have to give up" his Tour de France prize money. Boston-based law firm Day Pitney partner David Newman said that a sponsor who “wanted to test the contract could demand its money back.” Newman: “They’d have to spend a lot of money to prove these allegations. From a return on investment, you’d spend a lot of money on lawyers and lawsuits, and more publicity can’t help your product.” When asked what Armstrong would do if his sponsors sued him for damages, Armstrong’s lawyer Tim Herman said, “We don’t have a plan for that, because I do not expect that to happen.”

SPINNING OUT: Sullivan noted for a “big company like Nike,” the loss of Armstrong “is no big deal.” Sullivan: “But I expected more anger from smaller companies like FRS, which makes an energy drink that was closely associated with Mr. Armstrong.” Armstrong’s image, until “recently, was featured prominently in the company’s advertising.” FRS CEO Carl Sweat said, “It’s awfully difficult to not be very disappointed, having believed in all aspects of the relationship. Two years ago, before any of this was out, it would have been a different conversation. He helped us build our brand.” Sweat said that the company was now using Jets QB Tim Tebow, who has a “squeaky-clean reputation, as its main pitchman.” Sullivan wrote there are "two areas, though, where Mr. Armstrong is at risk of losing a little or a lot of money.” The case against him that is “getting the most attention is being pursued by SCA Promotions, a company in Dallas that insures potentially costly but unlikely events.” SCA Corporate Counsel Jeffrey Dorough said that the firm was “sending a letter to Mr. Armstrong demanding that he return $12 million -- the $7.5 million and an additional $4.5 million it paid for a previous victory." Meanwhile, Sullivan wrote, "The biggest threat to Mr. Armstrong’s wealth is a False Claims Act lawsuit against him and Tailwind Sports, the limited liability corporation that owned his team” (N.Y. TIMES, 10/27). In Boston, Bob Ryan wrote, “Over and above the personal prestige and financial damage he has done to himself, Armstrong has besmirched the entire sport of cycling” (BOSTON GLOBE, 10/28). 
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