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How Lance Armstrong’s Cheating Relates to Marriage

Twoology cofounder/CEO, Jeff Ullman, was interviewed for this article about Lance Armstrong. “If Armstrong was willing to cheat his teammates, partners, his sponsors, his supporters, his financial backers and the public, why wouldn’t he also cheat in his personal relationship?”

Ask yourself:  If someone you know cheats in business, why wouldn’t they also cheat in their marriage?

Here’s the article:

THE BUSINESS OF CHEATING

A look at the disgraced cycling star Lance Armstrong’s crumbling financial empire.

“I like to win, but more than anything I can’t stand losing, because to me that equals death.” The words flow matter-of-factly from Lance Armstrong’s taut face as it looms against blackness in Alex Gibney’s acclaimed documentary, The Armstrong Lie. Armstrong’s piercing eyes stare directly into the camera, as if he’s daring you to disagree.

In 2009, Gibney set out to document Armstrong’s attempted comeback as a Tour de France champion after a seven-year winning streak that ended with his retirement in 2005. The comeback went nowhere, and the prospects for Gibney’s unreleased project looked bleak when Armstrong was banned for life from competitive cycling in October 2012. However, when the director scored a final interview with the racer, the film became something much different: a chilling window into Armstrong’s ability to lie and intimidate anyone who would try to call his bluff—all in the service of his ego and business empire.

Of course, lying and cheating in sports is all too common. Consider Alex Rodriguez’s constant and litigious denials of doping, or the chemically fueled careers of “who, me?” athletes like Barry Bonds, Sammy Sosa, Ben Johnson, and Marion Jones—not to mention the busts of Floyd Landis, Jan Ullrich, and other Tour de France stars. “Whether from nature or nurture, they enter this perform-or-die arena with the willingness and ability to cheat, then lie about it to the very companies who pay them, ultimately stealing from their throngs of admirers,” says Jeff Krawitz, an adjunct professor of marketing at the New York University’s Stern School of Business.

Indeed, with so much big money sloshing around in sports today, competitors face an irresistible temptation to do what it takes—whatever the risk—to ensure victory, especially when there are millions of dollars in future endorsements riding on one’s ability to swat a fastball, run a world-record sprint, or power a bicycle high into the Alps faster than any other human alive. As Reed Albergotti and Vanessa O’Connell, authors of the book Wheelman write, “Lance is the product of our celebrity-worshipping culture and the whole money-mad world of sports gone amok.”

Riding the Money Machine

To Armstrong’s credit, he had quite a juggernaut going for a while, surpassing everyone in the field. And we’re not talking only about bicycling, but the global business empire he built on the deceptions of his racing success.

The cash really began to flow when Armstrong returned to competitive cycling in 1998 after his inspirational recovery from testicular cancer. Entrepreneur Thomas Weisel, who helped bankroll the U.S. Postal Service Pro Cycling Team, gave Armstrong a minimal salary, but with incentives that ultimately allowed him to rake in an estimated $1 million that year and roughly $4 million by 2004—all in addition to his winnings. When Armstrong mounted his Tour de France comeback in 2009, team sponsor RadioShack reportedly paid him $3 million for that one race alone, which was enhanced by millions more that he collected just for showing up at events in Australia and elsewhere.

Still, the racing and personal-appearance income was but a small portion of the overall picture, as Armstrong leveraged his fame and personal story to ink rich endorsement deals with Nike, Subaru, 24 Hour Fitness, Anheuser-Busch, Oakley, Trek Bicycle Corp., sports-drink company FRS, energy-food maker Honey Stinger, biking-helmet manufacturer Giro, RadioShack, and numerous others. At the height of his career in 2005, Forbes estimated that Armstrong earned $28 million from salary and performance-related bonuses, as well as from an array of sponsorships, speaking engagements, and book royalties.

The Wheels Come Off

On October 10, 2012, the United States Anti-Doping Agency released a 202-page document saying Armstrong’s cycling career was “fueled from start to finish by doping.” The International Cycling Union subsequently stripped him of all results since 1998, including his Tour de France titles. Almost immediately, Armstrong’s business empire started falling apart, starting with his October 17 dismissal by Nike (known for its stubborn loyalty to athlete endorsers), which cited “seemingly insurmountable evidence” that he had misled the company for more than a decade.

The very next day, Armstrong stepped down as chairman of his phenomenally successful cancer foundation, Livestrong. Separations from Anheuser-Busch, Trek, FRS, Honey Stinger, Giro, RadioShack, 24 Hour Fitness, and Oakley followed like tumbling dominos, creating the infamous “$75 million day” of business losses to which he alluded when publicly confessing his sins to Oprah Winfrey in January 2013.

A reader poll taken by Ad Age magazine around that time found that 68 percent of readers believed that Armstrong’s name had been damaged beyond repair.

“Armstrong’s partners completely trusted him; they were his most loyal allies,” says Jeff Ullman, cofounder and CEO of the relationship website twoology.com. “They defended him and put their reputation and integrity behind him because they thought, ‘He will never lie to me.’ There were thousands of bicycle enthusiasts, not to mention cancer survivors and their support organizations, who believed him and would defend him in their own circles. So what went down was not just the money loss to those people, but also their own integrity.”

Nike ultimately cut ties with Livestrong in May 2013, short-circuiting a partnership that had generated more than $100 million of the roughly $500 million raised by the charity since it was founded in 1997. “I’m not sure that the team has fully processed it,” Livestrong president Doug Ulman toldWired, noting that the organization was still growing despite the scandal. “The one silver lining is that more people know who we are and what we do, and we’re serving more people today than we were six months ago.”

Although sunglasses maker Oakley dropped Armstrong, it has continued to offer Livestrong-related products, while RadioShack and Giro still work with the organization as well. RadioShack, 24 Hour Fitness, Subaru, and Nissan have gone their own ways, and Trek, in a somewhat ironic twist, announced on June 26, 2013, that it will take over the RadioShack Tour de France team this year.

By July 2013, FRS had moved on from the Armstrong scandal, raising $20 million, according to a regulatory filing, in order to acquire a similarly sized company, Nutravale, which makes chewable medications and supplements. However, last March, Armstrong and FRS were sued in Los Angeles federal court by consumers who claimed they were victims of false advertising because Armstrong had claimed in advertisements that FRS’s energy and health supplements were his “secret weapon” from 2007 to 2012.

What can companies do to protect themselves when their spokesperson falls from grace? “Not much, after the fact,” says NYU’s Krawitz. “Developing what amounts to a prenup is a better solution. At the start of an endorsement contract, why not insert a clause that says, in effect, that if you are found guilty of certain offenses by an appropriate measure, you have to return all the money paid to you plus interest. This could be a way to screen out those embedded amoral behaviors.”

Lying and the Long Road Ahead

Even after the dissolution of his empire, The Wall Street Journal estimated Armstrong’s net worth as exceeding $100 million, though observers note that in the foreseeable future he probably is going to have to pay back approximately $12.5 million in bonuses and prize money, not to mention that estimated $75 million in lost endorsement dollars. The United States Department of Justice (DOJ) is suing him for fraud on behalf of the Postal Service and could collect about $100 million in damages. The DOJ also has joined a whistleblower suit, brought by former teammate Floyd Landis, that claims Armstrong defrauded the Postal Service by ignoring contract prohibitions against performance-enhancing drugs. “I don’t have $100 million,” Armstrong told Bicycling, adding that he now flies commercial—a far cry from the plush Gulfstream jet shown in Gibney’s film—and wishing aloud that he hopes to be able to come up with some sort of “global settlement” for all of his angry exes.

Business schools—factories that turn out the people who want to build and capitalize on any behavior that can turn a profit—appear to have reacted mildly to the deceptions of Armstrong and others, according to Krawitz. “Virtually all MBA programs require at least one course in business ethics, but that’s one course out of more than 20, many of which tell you how to manipulate things for personal gain. Clearly, they need to do more,” he notes.

Armstrong stated in LeMonde, “I didn’t invent doping. And it didn’t stop when I stopped. I simply participated in a system. I am a human being. Doping has existed since antiquity and will always carry on.” Still, he is paying the price on a conscious decision based on his world-class ability to perform—and deceive.

“I’ve never met a better liar. And I’ve met a bunch,” Gibney, who also has made acclaimed documentaries about the Roman Catholic Church, Enron, Eliot Spitzer, and Julian Assange, told The Telegraph. “He’s good. He’s real good. The best.”

SOURCE

http://thecask.us.theglenlivet.com/the-business-of-cheating/

Written by:  Michael Roney

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