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Armstrong Back-Pedals From His Foundation

By Mark Hrywna - October 17, 2012

Days before the charity he founded celebrates its 15th anniversary, Lance Armstrong announced he is stepping down as chairman of the foundation that bears his name. Minutes after the statement was released this morning, sports shoemaker Nike announced it has terminated its contract with him.

The Austin, Texas-based Lance Armstrong Foundation (LAF) is set to begin a series of events tomorrow to mark its 15-year anniversary.

In a 578-word statement released this morning, Armstrong makes a passing reference to recent allegations about performance enhancing blood doping. Testimony from 11 former teammates is included within a report released last week by the United States Anti-Doping Agency (USADA). “To spare the foundation any negative effects as a result of controversy surrounding my cycling career, I will conclude my chairmanship.” (The full statement is available: http://blog.livestrong.org/2012/10/17/lance-armstrong-to-step-down-as-chairman-of-livestrong/)

Barely two months ago, Armstrong was defiant in railing against the USADA, describing a process that he said was biased, unfair and one-sided and promising to no longer address the doping issues. Foundation leadership has since reported a spike in donations. He continues to deny the charges.

How long Armstrong remains a general member of the organization’s 16–member board is up to him; as founding director, his term does not expire. He is voluntarily stepping down before his term as chairman expires, to be replaced by Vice Chairman Jeff Garvey, the founding chairman.

The statement included remarks from Livestrong President and CEO Doug Ulman, who praised Armstrong for his commitment to help others through the charity. “Long before he became a household name, Lance Armstrong created a foundation to serve others facing the same fears and challenges he struggled to overcome as a result of his cancer diagnosis,” said Ulman “Today, thanks to Lance’s leadership, that foundation has had the privilege of raising close to $500 million to serve people affected by cancer,” he said.

In its own 66-word statement, Nike said it plans to continue to support Livestrong initiatives but terminated his contract “due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade.” Armstrong also said he and his family will continue to be devoted to the work of the foundation. (Nike’s statement is available here: http://www.nikeinc.com/news/nike-statement-on-lance-armstrong)

While other sponsors — including RadioShack, Trek bikes and Anheuser-Busch InBev — also decided to drop Armstrong, none so far have mentioned any plans to discontinue support of his charity. "What’s interesting about them is their grassroots support," said Craig Bida, executive vice president: cause branding, nonprofit marketing, at Boston, Mass.-based Cone, Inc. Many people have made the distinction between Armstrong the man/athlete and Livestrong the charity. "It’s been more about the survivorship aspect; he’s been a voice for all people who have gone through this or are going through this," said Bida.

Whether Livestrong remains a darling of corporate America remains to be seen. "Individuals don’t have the same type of pressure that a corporation does," said Bida. Livestrong has "taken an entrepreneurial approach, raised awareness and engaged people — that fundamentally hasn’t changed today," he said. "This is about authenticity and integrity. There are a lot of fallen heroes in scoiety. Often, there is a second act that comes."

It was Nike and its ad agency that first put Livestrong on the map, producing the yellow wristbands in 2004 with the goal of selling 5 million. The little pieces of silicone became a fundraising and awareness phenomenon and went on to be copied by charities all over the world. To date, the foundation has sold almost 80 million bracelets, including 22 million bracelets in 2005.

The 41-year-old cyclist came back from a testicular cancer diagnosis in 1996 to win the Tour de France a record seven times from 1999 to 2005. Livestrong last year had total revenue of almost $49 million, including $17 million in event revenue, $16 million in cause marketing and licensing revenue, and $3 million in merchandise sales.

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