Lance Armstrong could lose millions
After confessing to doping, the disgraced cyclist may find his net worth is at risk.
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.
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YOUR OBAMA..was purportely a pot-head. Yet he is not only President..he is not held accountable! Leave this guy alone until you hold Obama to the same standards. There is no proof Obama ever went to ANY College..nor does he have a record of one single trial case as a ?Lawyer. No one knows who this man is..yet America didn't question his position as a president. It's hypocritical to bother an athlete,
when you don't hold your own president accountable.
WOW what a joke. Lance who deceived millions goes on this woman's network to help her make millions?!
Why folks, why did you tune in?
Lance lied so much for so long he deceived himself, he still doesn't know the truth.
As for his future? Get a REAL job Lance. And get into recovery, you need to learn and admit your powerlessness and start making amends, that should take you like, forever.
No more TV publicy. Just go away and stay out of the public eye.
Why is it that the media focuses so much on the money part of this issue, You can tell by the title of this article MSN posted.
While growing up in the 70's, we were taut the the news media's job was to report the facts that they had collected, with no "opinion" attached.
But they have figured out that if they develop a counter theory of the facts, and dramatize the ****, the more people will watch, the more advertising time the can sell, and in the end, all that matters is more money in their pockets.
That's all the news media is about these days. SHOW US THE MONEY
The truth will out; Armstrong was short sighted to think he could keep all the participants who knew and transported controlled substances over international borders from cracking under the pressure of sports governing bodies and investigative journalists.
I suppose he must have thought that the prevalence of performance enhancing drugs would become acceptable in the future instead of remaining the scourge of the level playing field.
Lance will need to swallow a big dose of humility as a first step to repair his image-so far he seems to be his brash insolent self.
Under the RICO Act, a person can be charged with racketeering — which includes , , illegal drug sales, loan sharking, murder and prostitution — if he or she has committed two of the 27 federal and eight state crimes under U.S. within a 10-year period. The law gives the government the power to criminally prosecute and imprison an organized crime leader even if he or she has never personally committed any of the components of racketeering. This is because he or she is part of a criminal enterprise.
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A basic income policy can actually ensure a decent standard of living for everyone.
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