Nike, Inc., the global sports apparel company that helped launch the yellow Livestrong wristbands into a fundraising phenomenon and with it a foundation for cancer survivors, will conclude its partnership with the charity after its contract expires next year.
“Our understanding is Nike will continue production through its holiday line this year, then cease production,” said Katherine McLane, vice president, communications and external affairs for the Livestrong Foundation. Nike and the foundation will fulfill the terms of their contract as it runs its course through 2014 and there will “no immediate financial effect to the foundation,” she said. The changes do not affect the foundation’s capability to provide services to cancer patients and survivors and will not have a financial impact, McLane said.
It’s unclear why an announcement was made today. McLane declined to “get into the process of private communication between partners but I can tell you Nike and the foundation worked together to make relevant, internal stakeholders aware in an appropriate, sensitive manner.” She also declined to go into details on the agreement because they remain confidential under the terms of the deal. As in any contract, both parties can agree to renew or not renew, she said.
A call to Nike’s media office was not returned by press time this afternoon.
Nike was among a number of sponsors to drop Lance Armstrong the cyclist but stuck with the charity after he admitted in January to blood doping when he won seven Tour de France titles. Livestrong lost another partnership earlier this year when its name was removed from Sporting Park in Kansas City, Kan. In 2010, the charity and the Sporting Park entered a six-year, $7.5-million naming deal for the soccer stadium.
Calling the Nike relationship the culmination of something that produced revolutionary results in the nonprofit world, McLane thanked the company for a fruitful nine-year partnership. The foundation, she said, remains “deeply grateful” to Armstrong for giving “all of us at the foundation the chance to serve an incredibly noble cause.”
The foundation sees 2013 as “a rebuilding year given pretty significant changes it’s weathered in recent months. It’s time for the foundation to rebuild itself, and steer a strong, independent course that assures the long-term health and sustainability of the organization,” said McLane.
“From the foundation’s perspective, we hoped a change like this wouldn’t occur but certainly we planned for it,” McLane said. “We expected a change in our partner lineup and we’re in shape to pivot to changes in our partner lineup,” she said. There are a number of prospects that could replace Nike, McLane said, and those announcements will be made when appropriate.
The Livestrong brand was created by the Livestrong foundation, which also owns it and has licensed it to Nike and others as well. The foundation will continue production of wristbands, which were conceived by Nike in 2004 and gifted to the foundation as an asset. Since 2004, the wristbands have been produced by the foundation.
“We are in a rebuilding year and we expect and plan for shifts in our partner lineup, some contracts expired and some added this year,” McLane said. The Austin Marathon concluded a relationship this spring and a new event was announced for September, the Car2Go Marathon Relay, benefiting the Livestrong Foundation. The foundation still has partnerships with Oakley, Johnson Health Tech, Genentech, FTD, Think Sport, Livestrong.com and YMCA. “Regardless of who our partners are, the mission of the foundation remains the same,” she said.
“We’re not the organization we were a year ago and we’re not likely to ever be again. The most important thing to foundation is staying true to its mission,” McLane said.
The foundation finished 2012 in strong fiscal shape and is up 2.5 percent in the current quarter’s projections. The organization was conservative in its planning and revenue projections for 2013, reducing its budget across the board by 10 percent, said McLane. “It’s a good sign considering recent events,” she said.
So far this year, the foundation has generated about $16.5 million in revenue, which compares favorably with the budget $16 million, McLane said, and last year at this point revenue was around $17 million. “Given recent events, we feel this is a strong performance,” she said.
Livestrong had total revenue of $48 million, according to its most recent Internal Revenue Service (IRS) Form 990, with more revenue in recent years generated through licensing and cause marketing.
The 15-year-old charity has distanced itself from the infamous cyclist, starting in earnest last fall when it officially changed its name from the Lance Armstrong Foundation to the Livestrong Foundation. That move came just after Armstrong resigned as chairman of the charity’s board in October and ultimately stepped away from the board completely in November. A new logo was unveiled at the organization’s State of the Foundation assembly in Chicago in February.