Lance Armstrong could lose millions

After confessing to doping, the disgraced cyclist may find his net worth is at risk.

By Aimee Picchi Jan 18, 2013 10:08AM

Image: Oprah Winfrey interviewing cyclist Lance Armstrong during taping for the show After admitting to doping during an interview with Oprah Winfrey, disgraced cyclist Lance Armstrong might find the toughest part to come: legal challenges and negotiations with prior supporters that could drain millions from his bank account.


Friday night, Armstrong will address some of the issues around his sponsorships and his decision to step down from the Livestrong Foundation, according to a preview that aired on Thursday night for the second part of Winfrey's interview.


When Nike (NKE) called to tell him they were dropping him, Armstrong said in the preview, it was a "$75 million day -- gone."


With a tangled web of endorsements and business interests -- as seen in this amazingly convoluted flowchart -- it's tough to estimate exactly how much Armstrong earns each year, although his net worth has been estimated between $100 million to $125 million. 


The U.S. Anti-Doping Agency slapped a lifetime ban on Armstrong in October, adding fuel to some lawsuits against the cyclist. Now that Armstrong has admitted to Winfrey that he engaged in doping, those lawsuits could receive a bigger impetus and possibly reduce his net worth significantly, according to NPR.org

U.S. Attorney General Eric Holder is reportedly considering whether to join in a whistleblower lawsuit from cyclist Floyd Landis, reports the New York Daily News, which reviewed the sealed lawsuit. Filed under the False Claims Act, the lawsuit alleges that Armstrong and his associates defrauded millions from taxpayers, given that he was in allegedly in violation of the sponsorship agreement between himself and the U.S. Postal Service. 


Armstrong is said to be in talks with the U.S. Postal Service to return some sponsorship money, although it's not known how much is at stake. During the team's peak years of 2001 to 2004, the postal service likely spent at least $30 million to underwrite Armstrong's team.


Many sponsorship contracts are created to last only short periods, and some of Armstrong's deals might have already expired, Marc Edelman, a law professor at Barry University's Dwayne O. Andreas School of Law, tells MSN Money. 

It's unlikely that a sponsor would seek compensation through the courts, he says. "A much more drastic remedy might involve a brand going after Lance Armstrong for past payments, or for indirect damage done to brand," Edelman says. "Those are much more difficult to win."


Aside from legal problems, Armstrong is facing a loss of future income from severed sponsorships and reduced speaking fees. It's possible for Armstrong to revive his image -- but it's going to take a while, notes Karl Heiselman, chief executive of brand consultancy Wolff Olins


Coming clean is the first step, he tells MSN Money. 


"There are always opportunities to redeem yourself, but it comes back to honest, sincere action," Heiselman says. "He used to stand for is perseverance, so this is obviously a major blow to that."


Armstrong should "take on a new cause, such as anti-doping, and it'll take a long road to rebuilding" his reputation, he adds. 


In the meantime, there is one clear winner in Armstrong's confession: Winfrey. 


Her struggling cable network received a sizable premium for advertising spots during her two-part interview with Armstrong, reports Advertising Age


OWN is fetching about $100,00 for a two-unit package, giving advertisers access to spots in both nights of the interview, marking a 40% to 50% bump from any other night on the cable network, according to the story. 


And even better for Winfrey, inventory has sold out.


More on Money Now

239Comments
Jan 18, 2013 1:16PM
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Who cares. I'm to busy trying to figure out how to pay the additional tax burden that was just dumped on me. In addition my health insurance went up 27% this year, 18% last year, gas is still way to high, beef is for the people who can afford it, and any vacation time I have built up I'm trying to cash in to keep my bills current. Why people pay attention to athletes and stars is beyond me. Dealing with what Washington legislates affects me and everyone directly. Lance could lose millions and it won't affect him much. Me, I could care less. WTF is Washington going to do to cut my cost of living.  My pay will never go up fast enough to offset what Obama is doing to me. You people need to pay attention to what is important. 
Jan 18, 2013 12:45PM
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These companies too made millions off of his name. Therefore, I feel they are owed nothing back; they paid him to promote their products......at the time, he did that successfully and consumers bought............CUT TIES with no eligibiltiy for future endorsement opportunities.
Jan 18, 2013 12:24PM
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He's a liar, a cheat, and a swindler . . . . he should run for Congress or the Senate before he makes a bid for President.
Jan 18, 2013 12:32PM
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That's what our country is made of today, people who want to get ahead, no matter what the cost.  Lying, cheating, stealing, selling drugs whatever it takes just to get the money.  Its like good guys come in last, you work hard all your life and if your lucky you've gotta a couple of bucks in the bank and maybe just maybe own your own home.
Jan 18, 2013 2:45PM
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What the hell is the postal service doing sponsoring a team when they loss billions a year...Goes to show you how screwed up government is...
Jan 18, 2013 12:32PM
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I think he's qualified to be a politician .
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I have never liked opra and see no social redeeming value in her or or most of her programs.
Jan 18, 2013 11:52AM
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Armstrong should have kept his mouth closed.

 

Are the other "dopers" who confessed or busted also going to be under scrutiny and required to pay money back and be banned from competition?  I sure hope so.  After all, it's justice we're after?  Right?

Jan 18, 2013 11:45AM
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He should lose millions. He never would have made them in the first place. Unfortunately he'll still live better than most of us.

Jan 18, 2013 1:02PM
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Look up how many football players were involved in felonies in just 2012 alone 
Jan 18, 2013 1:45PM
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Lance go to wall street and the US Congress ! They are looking for a few good lying SOBs...
Jan 18, 2013 1:34PM
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I think Lance's story is at least somewhat similar to Arnold Schwarzenegger's.  Arnold publicly admitted to using steroids, but the bottom line for both of them is that the drug use basically made their careers.  Without the steroids, Arnold would have never made it to Hollywood, and therefore would have never gotten into politics.

With Lance, he's got a reported net worth of $100 Million.  So, these guys are obviously dishonest, but they reap huge rewards from their dishonesty.

Anymore, there is a huge financial reward for cheating, but only a minor punishment.
Jan 18, 2013 11:10AM
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Everyone knew he was using drugs. He was the only one unaware of this reality...
Jan 18, 2013 3:47PM
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Hold on...  "The postal service likely spent at least $30 million to underwrite Armstrong's team."

Who authorized the US postal service to spend 30 Million to support this guy? The post office is "Broke" and can't even pay it's health insurance / retirement contributions but it spent 30 million on this guy.

 

That should be the real story.  

Jan 18, 2013 12:56PM
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I get that Lance is a dbag for going after people but I don't get why he had to return money to USPS?  Everyone on that team knew about it.  EVERYONE including whistle blower Floyd Landis. .  Should they be chipping on the 35 million?
Jan 18, 2013 11:55AM
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As people get older attitudes change and wisdom can begin to set in, or their own conscience finally gets the better of them. All of us have lied, cheated, stolen, exaggerated, or done things when we were younger. We now look back and wonder "What the hell was I thinking". At least he is trying to make amends, and take responsibility for his actions, but wow he pulled a big one. He must pay the consequences for his actions.. He needs to get a job with the Anti-doping officials since he seems to know how to totally beat the system.  

Jan 18, 2013 2:17PM
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He is not just a disgrace to cycling but to all of USA sports.  He has tarnished the country and the rest of the world when they get done laughing will always question when an American wins any sport; that we have cheated someway to get the edge.  For those that think he has been punished enough; he has not been punished at all.  Why?  We are still talking about him and his crimes and his bank accts.   Bottom line, it was greed that got him to cheat, to deny, whatever he claims it was that made him believe it was okay.  Until greed is eliminated from the human race, nothing will change not just in sports but in politics, entertainment, Wall street and in general life.  
Jan 18, 2013 12:12PM
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this is  typical in professional sports and it's spreading to the amateur level. One lab makes the drug and another detects it. Nothing but a cat and mouse game. Lance is not the first nor will he be the last to get caught up in these type of scandals. Meanwhile he needs to give up his pricess and stop having them take the pricess from him.
Jan 18, 2013 1:31PM
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I still admire his athelic accomplishments and his desire to win.  Like he said in the interview he did what he did to level the playing field and win.  I do not think he has very much remorse,  confessing may just be a calculated move so he can move onto another chapter in his life. 

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