Nike out, who next?
[An update appears at the end of this article.] Nike announced today the termination of its agreement with Lance Armstrong. In a terse statement Nike announced its move this way:
"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. Nike does not condone the use of illegal performance enhancing drugs in any manner. Nike plans to continue support of the Livestrong initiatives created to unite, inspire and empower people affected by cancer."
While Nike is still in as a Livestrong project partner, Armstrong is less in, distancing himself from his own foundation by stepping down as its chairman in order to, according to Armstrong, "spare the foundation any negative effects as a result of controversy surrounding my cycling career."
This still leaves Armstrong with a bevy of endemic sponsors, which include Trek, SRAM, Oakley, Giro, FRS, and Honey Stinger. Any decisions that need to be made by SRAM and Honey Stinger are not as straightforward, because Armstrong is an investor in each.
Trek, and by association Bontrager, are the brands under the most pressure to make a decision on Armstrong, as that association has been instrumental in the success of the Trek brand over the past decade and a half. Indeed, doping-related anti-Armstrong comments made by America’s other great cycling legend, Greg Lemond, caused a rift between Trek and Lemond, and that rift, and litigation contemporaneous with it, seemed at least proximate to Trek’s decision to drop the Lemond brand of bicycles from its line-up.
Nike’s decision to continue with its sponsorship of Armstrong until this late date is the second doping-related image issue it’s had to face this year, among those in the endemic running community. The popular LetsRun forum has been scathing in its criticism of banned doping coach Mark Block’s presence in Nike’s sky box at the U.S. Track and Field Olympic Trials.
Nike has not had an easy time of it among the hard core, endemic running crowd, at least not if triathlon is any sort of bellweather. Nike’s count at the Hawaiian Ironman revealed its weakness: 6th, a fraction of the totals run up by Asics and Saucony, just over half of Newton’s total, well behind Brooks and K-Swiss, and just in front of Mizuno and Zoot. In a recent Slowtwitch reader survey, Nike placed 5th when readers were queried about, “Your next running shoe for training.” Nike was in a virtual tie with K-Swiss and Mizuno. It’s market share among Slowtwitchers fell from 10 percent to 7 percent in just one year.
This is not an inconsiderable market, even for a company with $20 billion in sales. In North America alone, the market for technical running shoes in triathlon is estimated by Slowtwitch to be in excess of $600 million at wholesale.
Nike’s massaging of the Armstrong affair is not likely to please anyone (see Deadspin’s take), as the anti-Armstrong forces believe Nike stood loyally by Armstrong for too long, while the pro-Armstrong forces won’t be happy that Nike has chosen to sever ties, even at this late date.
Updated: Several news outlets, including Bicycler Retailer & Industry News, report that Trek, Giro, Anheuser Busch and Honey Stinger have distanced themselves in one way or another. Responses are either immediate severing of relationships, or the failure to renew existing contracts upon their termination.
SRAM has announced that Armstrong no longer owns shares in the company. Armstrong first invested in SRAM roughly contemporaneous with that company's circa-$500 million infusion from Lehman Brothers. SRAM spokesmen said that those shares have been repurchased in anticipation of a public offering.
The previously published edition of this story with all the tweets and facebook comments is right here: slowtwitch.com/News/Nike_out_who_next__3168.html
