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Lance Armstrong Breaks Another Record -- He's Fined $10 million

02/19/2015 04:33 pm ET | Updated Apr 20, 2015

According to the Guardian, an arbitration panel awarded SCA Promotions the $10 million fine assessed to Lance Armstrong for engaging in "an unparalleled pageant of international perjury, fraud and conspiracy." After previous litigation, SCA was required to pay Armstrong $7.5 million for his seven Tour de France wins. That was before he admitted to doping and lying about it. This fine is believed to be the largest assessed to an individual in American judicial history. It is likely to further tarnish an already severely damaged image.

Sanctioned By His Sport

The International Cycling Union banned Lance Armstrong for life and stripped him of his seven Tour de France titles. This knocked Mr. Armstrong's image off its lofty pedestal and sent it crashing to the ground similar to Humpty Dumpty.

Why The Great Fall?

As with Tiger Woods, Lance Armstrong had a squeaky clean "corporate image" that most thought was beyond reproach. When things are going well, such a lofty image translated to big payoff. Armstrong's net worth was pegged at $125 million. When the evidence against him became overwhelming, his image had a long way to fall. An image that falls from such a high perch is bound to shatter and be very difficult to repair.

How He Crafted His Image

Lance Armstrong built his image from his phenomenal cycling achievements, successful battle with cancer, and founding of the Livestrong Foundation to fight cancer. In fact, Lance Armstrong became a sports icon that was the face of cycling in America -- if not the entire world. He put cycling on the map and created such a powerful persona that many thought of him as the Super Man of the sport.

Endorsements

As a result of his success, sponsors lined up to endorse him. His biggest sponsors included Nike, Anheuser-Busch (InBev), Oakley sunglasses and Trek bicycles. Nike and Trek stood by him until the end, but had to abandon ship as the volume of evidence outlined in the USADA (U.S. Anti-Doping Agency) report overwhelmingly mounted against him. Some estimate that he lost $30 million in sponsorships as a result of his being stripped of his titles. Forbes estimates that his loss of future earnings from sponsors that have abandoned him is likely to top $150 million.

Why Nike Stood By Tiger But Not Lance Armstrong?

Tiger Woods was caught cheating on his wife, but was never accused of cheating in his sport. Nike and Trek are companies that focus on sports. Nike knows that sports fans are not very forgiving when star athletes cheat at their game -- especially when it is their profession for which they are paid. As my esteemed colleague David Carter who is Executive Director of USC's Sports Business Institute affirmed,

"... because his indiscretion cut to the very heart of competition in sport, if he lacks that kind of integrity there's no way a company like Nike can tolerate that."

What Should Lance Have Done to Avoid Such A Great Fall?

From a marketing perspective, someone should have advised Lance Armstrong to follow what is known as the fact procedure to mitigate damage to his image. When the problem first became public, he should have done the following:

  1. Admitted he did it and apologized
  2. Put the problem in perspective (his competitors were doing the same)
  3. Proposed a solution so it won't happen again.

Instead, he tried to "sweep it under the rug," denying he ever used doping or any performance-enhancing drugs. The problem is that when companies or individuals do this, what's under the rug too often explodes when the truth is revealed.

What Should He Do Now?

It is very late, but never too late. While the trust between Lance and the public is largely gone, he can try to pick up the pieces of his shattered image by dedicating himself to insuring that doping is eradicated from cycling and all sports. He can also continue his previous efforts to help cancer victims and do whatever he can to turn negatives into positives.