Armstrong gets dumped
Nike is a cloth and footwear company with products that have gained high recognition for their design and quality. Lance Armstrong is a former seven time champion of the Tour de France cycling championship. Lance Armstrong has been the Nike’s iconic figure for a long time. The long term relationship between Nike and Armstrongstarted in 1996, but was cut short by allegations that Armstrongwas involved in drugs during his race events. It is quite evident that Mr. Lance Armstrong was facing serious drug related allegations. It was good for sponsors to terminate the relations between themselves and the athlete to avoid a bad reputation for the company (Albergotti, O’connell&Vranica, 2012).
Armstrong gets dumped
The partnership between Armstrong and Nike had been extended to Armstrong’s foundation known as Livingstone. For a number of times, Nike had been on record defending Armstrong on drug related allegations. Recently, the United States Anti doping Agency issued a conclusive report accusing the champion of a massive team doping scheme. This report was more conclusive than the other reportsthat had been issued in the past. Following the conclusive report being released to the media, Lance resigned as chairman of the board. This was after lengthy consultations with his family. Nonetheless, Lance Armstrong continues to deny the allegations (Albergotti, O’connell&Vranica, 2012).
Since 2000, Nike had portrayed Mr. Armstrong as a diligent athlete. However, the drug related allegations stretch far back and Mr. Armstrong has been adamant in denying the same. Through many commercials that showed Armstrong taking a blood test followed by comments on how he used to practice, Nike implied that the champion never used drugs to enhance his performance (Roth, 2012).
The accusations by the Anti doping agency seemed to create a waiver on Nike’s belief on the athlete ’s integrity levels. Apart from Nike, Trek, which is the company that made all bikes that Mr. Armstrong rode, ended their relationship with the athlete after registering their disappointments. Mr. Armstrong had been given a stake in the company, and like all the other partners, Trek decided that Armstrong could keep his stake in the company. This stake had been accorded due to sheer goodwill (Doeden, 2006).
Radio Shack was the other corporation that had signed a sponsorship agreement with the athlete. The relationship between the athlete and Radio Shack started in 2009. With the release of the drug related report, Radio Shack ended its relations with the athlete. As of June 2008, Mr. Armstrongwas regarded as the 60th most effective product spokesman alongside Brad Pitt. After the release of the report, his rankings dropped to 1410 along side Nicki Minaj. This shocked the marketing experts, and the sporting fraternity as a whole was dismayed by the news (Albergotti, O’connell&Vranica, 2012).
As a result of these events, many companies have withdrawn the sponsorship contracts they had signed with the star athlete. As for the validity of their actions, the companies were legally protected. In this case, the sports icon had indulged in an illegal activity and thus lacks any grounds to sue. There are still pending litigation made against the Anti doping agency by Mr. Armstrong’s lawyers. However, if the report is true, Mr Armstrong should be thankful to his sponsors for not taking any legal action. In fact, some have even allowed him to maintain his share in their companies (Vertuno, 2012).
It is quite evident that Mr. Armstrong was facing serious drug related allegations. To avoid bad company reputation, it was best for sponsors to terminate such relations between themselves and the athlete. For Nike and Radio Shack, after terminating the contract, they still let Mr. Armstrong maintain his stake in their companies. This was quite considerate. Since the matterconcerns an illegality, compromise would not be a viable option. As such,MrArmstrong should be grateful that no lawsuit was filed against him.
Albergotti, R., O’connell, V.&Vranica, S. (2012). Lance Armstrong Gets Dumped: Nike, RadioShack, Others Distance Themselves From Cyclist Amid Drug Scandal. Retrieved from: http://online.wsj.com/article/SB10000872396390444868204578062313532317222.html
Doeden, M. (2006).Lance Armstrong. Minneapolis: Twenty-First Century Books.
Roth, D. (2012). A Long Day for Brand Armstrong.Retrieved from: http://blogs.wsj.com/dailyfix/2012/10/18/lance-armstrong-nike-a-long-day-for-brand-armstrong/
Vertuno, J. (2012). Judge questions USADA, Armstrong lawyers.Retrieved from: http://www.usnews.com/news/sports/articles/2012/08/10/armstrong-doping-case-in-federal-court?s_cid=related-links:TOP