Lance Armstrong Gets Dumped

Nike, RadioShack, Others Distance Themselves From Cyclist Amid Drug Scandal

Nike terminated its contract with Lance Armstrong, citing "seemingly insurmountable evidence" that he doped. Vanessa O'Connell and Reed Albergotti join Markets Hub with details and to discuss whether brands get dented when an iconic spokesperson takes a fall. Photo: Getty Images.

Commercial fallout from doping allegations against Lance Armstrong hit Wednesday, as Nike Inc., RadioShack Corp., RSH +2.95% Anheuser-Busch InBev NV, the makers of Trek bikes and Giro helmets, and others distanced themselves from the former cycling champ.
Nike was particularly harsh, citing what it described as insurmountable evidence that he participated in doping and misled Nike for more than a decade.
The clothing and footwear company said it would continue to support Mr. Armstrong's cancer charity and carry Livestrong- branded products. The Lance Armstrong Foundation, known as Livestrong, for years has had a partnership with Nike, allowing it to license the Livestrong brand for a collection of clothing, shoes and other merchandise. Mr. Armstrong in the past made appearances at retailers and trade shows on Nike's behalf, to promote the Livestrong line.
Analysts say Livestrong branded products—profits from which go to the charity—represent a tiny portion of Nike's $25 billion in revenue.
Mr. Armstrong said Wednesday he resigned as chairman of his foundation. The charity said the decision was made by Mr. Armstrong after consultation with his family. A spokeswoman for the foundation said the former professional cyclist continues to deny the allegations that he used performance-enhancing drugs, adding that he will remain on the foundation's board.
A Nike spokeswoman said she wouldn't comment on whether Nike had asked Mr. Armstrong to step aside from his chairmanship after the U.S. Anti-Doping Agency last week detailed the allegations against him.
Nike's relationship with Mr. Armstrong began in 1996, and when previous allegations that Mr. Armstrong doped surfaced, Nike had consistently backed Mr. Armstrong following his denials. Even last week, after the report, Nike issued a statement that it was standing by the athlete.
In 2000, Nike portrayed Mr. Armstrong to the public as a clean athlete, when it began airing commercials in which Armstrong is shown taking a blood test in front of reporters and then addressing allegations that he doped. "What am I on? I'm on my bike, six hours a day, busting my ass," he said, in the spot.
"We used to joke that they were the untouchables—[Michael] Jordan, Tiger [Woods] and Lance—the upper echelon of Nike," said Slate Olsen, the general manager of cycling club Rapha North America and a former Nike employee who worked on the Livestrong brand in the 2000s. "After the bracelets launched around 2004 there was even talk about trying to move the corporate color from Nike orange to Livestrong Yellow."
The stampede of marketers away from Mr. Armstrong on Wednesday included Trek BicycleCorp., energy drink maker FRS Co., energy foods maker Honey Stinger and Easton-Bell Sports Inc., which manufactures the Giro helmets Mr. Armstrong often wore.
FRS said Mr. Armstrong also resigned from its board.