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Last week, the United States Anti-Doping Agency released a 1,000-page report that accused seven-time Tour de France winner Lance Armstrong of being involved in “the most sophisticated, professionalized and successful doping program that sport has ever seen.”
Armstrong has subsequently stepped down as chairman from his Livestrong cancer charity and had his sponsorship contract with Nike (NYSE:NKE) terminated. Furthermore, if the International Cycling Union decides that the USADA has made its case, Armstrong could be stripped of his record seven titles. The issue will be decided by October 31.
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Not only will the USADA’s allegations cost Armstrong his reputation, but he also stands to lose a lot of money. According to Reuters, Texas promotional company SCA refused Armstrong the $5 million it had initially planned to pay him for winning the 2004 Tour de France because of doping allegations, and News Corp.’s (NASDAQ:NWSA) British Sunday Times said they could sue Armstrong on defamation costs. The French association that awards Tour de France prize money has also considered reclaiming Armstrong’s winnings, which are estimated at $3.5 million.
Forbes estimated in August that the cyclist could lose up to $50 million in product endorsements over the next five years.
Armstrong’s other sponsors, Anheuser-Busch (NYSE:BUD), bike company Trek, Oakley, and energy food manufacturer Honey Stinger, have yet to follow Nike’s lead. In late August, before the USADA’s report was available, ABC News reported that all his sponsors, including Nike, planned to continue to support Armstrong and his foundation.
When a cyclist loses his Tour titles, the wins are usually awarded to the second place finisher. However, tour organizer Amaury Sport Organisation has considered leaving the titles vacant as many podium finishers at the time have been linked to doping.
While Armstrong has not chosen to contest the charges, his former team manager Johan Bruyneel will appear before an arbitration panel this fall. Five others from the team, including doctors Luis Garcia del Moral, Pepe Marti, and Michele Ferrari, were banned by the USADA for life.
Following its termination of Armstrong’s sponsorship deal, Nike released a statement saying, “Due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade, it is with great sadness that we have terminated our contract with him.”
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