Nike is terminating its nine-year merchandising partnership with Livestrong Foundation, the nonprofit organization for people affected by cancer that disgraced bicyclist Lance Armstrong founded in 1997 but is no longer affiliated with, after having earned more than $100 million for the charitable brand and redefined the way corporate sports partnerships operate.
“Nike has made the decision to stop producing new Livestrong product after its Holiday 2013 line,” Nike spokesman KeJuan Wilkins says in a statement cited by ESPN’s Darren Rovell. “We will continue to support the Livestrong Foundation by funding them directly as they continue their work serving and improving outcomes for people facing cancer.”
In the New York Times sport pages, Juliet Macur immediately delves into the point at which Nike apparently draws the line on its jocks’ transgressions.
“Nike stuck by Tiger Woods in the wake of his infidelity and gave Michael Vick an endorsement deal after Vick had served time in prison for his role in a dogfighting ring, which included killing dogs that underperformed,” Macur writes. “But this week, the company emphasized that there is one transgression it cannot tolerate: cheating.”
And not only lying about that cheating so forcefully for so long but also for, perhaps, using his charitable work as a foil.
“Nike and other sponsors -- including Oakley and Trek -- backed Armstrong right up until all of his legal options ran out, forcing him to confess to using performance-enhancing drugs and methods throughout his career, Nathaniel Vinton points out in the New York Daily News. “Before then, Armstrong skillfully deflected accusations about his doping by changing the subject to his charity work.”
Armstrong stepped down as chairman of Livestrong In October, a week after the United States Anti-Doping Agency publicly charged him with systematically taking performance-enhancing drugs over the course of his riding career, and he later walked away from the charity completely. Nike terminated its personal contract with Armstrong that same day “due to the seemingly insurmountable evidence that [he] participated in doping and misled Nike for more than a decade.” It said at the time that it would “continue support of the Livestrong initiatives created to unite, inspire and empower people affected by cancer.”
But consumers evidently have not. “Last week, Dick's Sporting Goods Inc. blamed poor sales results in part on its heavy inventory of Livestrong-branded clothing and exercise equipment that failed to sell,” Shelly Banjo and Vanessa O’Connell report in the Wall Street Journal.
“With 87 million distributed worldwide since 2004, Livestrong's yellow bracelet once was considered a cool thing to wear,” reads Brent Schrotenboer’s lede in USA Today. “Not anymore.”
Livestrong will continue to produce the $1 bracelets through a contractor in China, he reports, and the Nike logo will remain on its packaging until a contract expires in December 2014. But Nike’s extensive product line of sneakers, shirts, shorts, running bras, hoodies and jackets for men, women and kids will be discontinued.
"Sales of the product have not met our expectations," Nike spokesman KeJuan Wilkins tells Schrotenboer.
Livestrong’s slice of the Nike pie has accounted for about a quarter of its average yearly revenue since 2004, the WSJ reports. Altogether, “the foundation historically has derived one-third of its budget from corporate and licensing partners, one-third from events and one-third from general fundraising,” CEO Doug Ulman tells the New York Times. However the math actually shakes out, that’s a lot of lost moolah.
“This news will prompt some to jump to negative conclusions about the Foundation’s future,” Livestrong says in a statement. “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.”
The foundation also thanks Nike “not only for the time and resources it invested in helping us improve the lives of people affected by cancer today, but also the creative drive it brought … to the partnership.”
In March, the charity attempted to dull its links to Armstrong through a rebrand, Sebastian Joseph points out in the U.K.’s Marketing Week. “It changed its official name from the Lance Armstrong Foundation to Livestrong and unveiled a new logo.”
Robert Boland, a professor of sport management at New York University's Tisch Center, tells Reuter’s Phil Wahba that Nike is making the right move in pulling away from “from the scandal-stained athlete.”
“Their relationship with Livestrong was so based on Lance Armstrong and his story that it's almost impossible to separate them from a branding standpoint,” Boland says. “The chief thing that is motivating Nike is they're looking to move on and put their years with Lance Armstrong behind them."
I think just about everyone will be relieved to see Lance pedal off towards the sunset but it would be even better to see Livestrong survive his tainted stewardship. Is any company gutsy enough to step up?