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SBD Global/October 18, 2012/Marketing and Sponsorship

Anheuser-Busch Joins Nike, Radio Shack In Dropping Armstrong Sponsorships

Headlines about Lance Armstrong scroll across news wires in New York's Times Square Wednesday.
Anheuser-Busch InBev has joined Nike and RadioShack in dropping "their sponsorship deals with Lance Armstrong," according to Steel & Kassel of the FINANCIAL TIMES. The fallout from the doping scandal surrounding "the disgraced cyclist," once one of the world’s most-endorsed athletes, is escalating as AB InBev, which sponsors Armstrong under its Michelob Ultra beer brand, said it would not renew its relationship, which expires at the end of this year. Armstrong earned an estimated $15.3M from sponsors in '11, according to Burns Entertainment and Sports Marketing. His contract with Nike alone was worth between $8M-$12M annually. AB InBev said in a statement: "We will continue to support the Livestrong Foundation and its cycling and running events." Other sponsors include Trek bicycles, which could not be reached for comment, and Oakley sunglasses, which said it was reviewing its deal with Armstrong (FINANCIAL TIMES, 10/17).

'INSURMOUNTABLE EVIDENCE': In a statement, Nike said it was terminating its relationship with Armstrong due to the “seemingly insurmountable evidence” that he participated in doping and, in the process, “misled” the company. Nike: “Nike does not condone the use of illegal performance enhancing drugs in any matter.” The company will continue supporting Livestrong initiatives (Nike). Nike in a statement said that it will "change the name of the Lance Armstrong Fitness Center" at its HQs in Beaverton, Ore. The AP's Michelle Chapman noted Nike traditionally has "stuck by the athletes that it has endorsed in the past during tumultuous times in their lives," including Tiger Woods. The company "distanced itself" from Eagles QB Michael Vick "following a dog-fighting scandal, but by last year, it was backing Vick once again" (AP, 10/17). In Milwaukee, Don Walker noted Nike "has had a history of sticking with its stars," but the company "obviously felt it had to act" after USADA issued its report last week outlining the allegations against Armstrong (JSONLINE.com, 10/17). USA TODAY's Christine Brennan wrote if people still believe Armstrong "didn't cheat and didn't take drugs, you are now officially notified that he did" by Nike's move. Brennen: "Nike knows. Lance did it. Otherwise, it would still be standing by him. ... When Nike drops an athlete, you know he or she has done something terribly, irreparably wrong. That's because Nike has supported, defended and continued to pay all kinds of athletes in trouble," including Woods, NBA L.A. Lakers G Kobe Bryant, NFL Pittsburgh Steelers QB Ben Roethlisberger and former NFL QB Brett Favre (USATODAY.com, 10/17).

RADIOSHACK ALSO CUTS TIES: The WALL STREET JOURNAL's O'Connell & Albergotti reported RadioShack announced it also has "ended its relationship" with Armstrong. A RadioShack spokesperson said, "I can say that RadioShack has no current obligations with Lance Armstrong." The company has been "closely aligned with Mr. Armstrong since it signed a sponsorship agreement with the cyclist" in July '09. RadioShack last week said that it was "monitoring the situation" after the release of USADA's report (WSJ.com, 10/17). AD AGE's Michael McCarthy noted A-B Monday “issued another public statement of support for Armstrong,” with whom it signed a deal in ’09. A-B VP/Marketing Paul Chibe said, "Our current relationship with Lance remains unchanged" (ADAGE.com, 10/16). But CNBC's Joe Kernen said, "I would bet my life that you do not see another Michelob Ultra commercial with Lance Armstrong” (“Squawk Box,” CNBC, 10/17). Trek Bicycle Corp., which "features Armstrong prominently" in its Wisconsin-based HQs, has declined to comment (JSONLINE.com, 10/17).

LEAVING LIVESTRONG POSITION
: Armstrong said that he is "stepping down" as Livestrong chairman, so the group can "focus on its mission instead of its founder's problems." The AP's Jim Vertuno reported Armstrong's duties "leading the board will be turned over" to Vice Chair Jeff Garvey, the organization's founding chairman in '97. Armstrong will remain "on its 15-member board." Livestrong VP/Communications & External Affairs Katherine McLane said that the decision "turns over the foundation's big-picture strategic planning to Garvey." Garvey will assume "some of the public appearances and meetings that Armstrong used to handle," though Armstrong is "expected to speak at Friday night's 15th anniversary gala for Livestrong in Austin" (AP, 10/17).

TWITTER REAX
: NBC News' Andrea Mitchell wrote on her Twitter feed, "Nike fires #Lance Armstrong they never fired Tiger and rehired Michael Vick. Takes a lot to loose the swoosh." The L.A. Times' Bill Plaschke wrote, "It took Nike 8 months to take Joe Paterno's name off their child development center..that they quit on Lance shows how far he's fallen." Marathon runner Paula Radcliffe, a Nike endorser, wrote, "A lot of people were deceived. The Nike I know represents the spirit and ideals of true athletes and would never condone doping." ESPN.com's Bonnie Ford wrote, "Nike just did it."
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