Nike to Drop Livestrong Product Line

Andrew Klips |

livestrong black and yellow by wall e psThe repercussions from Lance Armstrong’s lies about blood doping throughout his infamous cycling career rippled a little further today as Nike, Inc. (NKE) said that it will stop making Livestrong brand products after its Holiday 2013 line.

Nike, who has a history of standing by athletes like Kobe Bryant, Tiger Woods and Armstrong while the general population, sponsors and the sports world is ripping them apart for their behavior, severed sponsorship ties with Armstrong last October after the United States Anti-Doping Agency publicized evidence in a doping case against him. With the evidence, Armstrong was stripped of his 7 Tour De France titles and banned from sanctioned cycling events forever. In a statement at that time, Nike made it clear that they felt Armstrong had lied to them for more than a decade.

Apropos, Kathy LeMond, wife of cyclist Greg LeMond, testified in 2006 that Nike had paid-off a former International Cycling Union president to hide a failed drug test by Armstrong, an allegation that Nike denied.

The USADA accused Armstrong of running the most elaborate doping scheme that the sport had ever seen.

Nike embraced Armstrong during his battle with prostate cancer to the degree that it even named its fitness center after him at their headquarters in Beaverton, Oregon. With the scandal, the name was removed.

Essentially every other sponsor abandoned Armstrong as well, including bike maker Trek, Radio Shack (RSH), Anheuser Busch (BUD), helmet maker Giro and sunglass company Oakley.

Nike did maintain its relationship with the Livestrong Foundation, a charity founded by Armstrong to raise money for cancer research even though the foundation renounced their founder as Armstrong resigned as chairman late in 2012. Nike helped the foundation raise more than $100 million dollars through retail sales of the Livestrong brand and the sale of yellow rubber bracelets for $1 each with the entire proceeds going to the charity. About 87 million of the bracelets were sold throughout the nine years of the partnership. The apparel and shoe giant said it will continue to support the foundation through direct funding.

The majority of retail sales of Livestrong products were at Dick’s Sporting Goods (DKS). Dick’s said in March that it is discounting the brand to make space for other products.

Nike wasn’t the only one that Armstrong had lied to as the shamed cyclist hid behind a do-gooder persona adamantly denying allegations, despite – in Nike’s words – “seemingly insurmountable evidence” that he was taking performance enhancing drugs throughout his whole career.

In January, Armstrong, his reputation in complete tatters, the good guy turned villain finally came clean in an interview with Oprah Winfrey. Armstrong admitted to starting doping early in his career with cortisone, then moving on to EPO (erythropoietin - a hormone that increases red blood cell production), using blood transfusions and more as he collected Tour De France and other titles.

On a bright note, the Livestrong Foundation will continue with its philanthropic efforts to fight cancer. It said it is “deeply grateful” to Nike for all the company has done together with them.

In a statement on Tuesday, the foundation, which has raised more than $500 million in the last decade and holds an A- rating with the American Institute of Philanthropy’s Charity Watch, said,

“This news will prompt some to jump to negative conclusions about the Foundation’s future. We see things quite differently. We expected and planned for changes like this and are therefore in a good position to adjust swiftly and move forward with our patient-focused work. Because of our sound fiscal health, the Foundation is well-positioned to continue to grow our free services for cancer patients and survivors that improve quality of life and access to care.”

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Companies

Symbol Name Price Change % Volume
VSN.DB.B:CA Veresen Inc. n/a n/a n/a 0
NKE Nike Inc. 51.72 0.17 0.33 5,869,828
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 103.54 0.89 0.87 2,199,097
DKS Dick\'s Sporting Goods Inc 60.28 -1.15 -1.87 1,447,787

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