The Business of Sports

Lance Armstrong Gets the Paterno Treatment at Nike HQ


A banner supporting Lance Armstrong during stage fifteen of the 2010 Tour de France

Photograph by Bryn Lennon/Getty Images

A banner supporting Lance Armstrong during stage fifteen of the 2010 Tour de France

(Updates paragraph 4 to reflect others sponsor's decisions, Oakley's "review")

Following Nike’s (NKE) abrupt reversal on sticking by disgraced brand ambassador Lance Armstrong, as well as Armstrong’s own resignation today as chairman of the charity he founded, author Daniel Coyle took to Twitter to solicit suggestions for renaming the Lance Armstrong Center at Nike headquarters. Some suggestions were a tad sharp—“The LieStrong Center,” “The Nike Correctional Facility,” “The Not Normal Pavillon”—and others a bit unoriginal, including “The Derek Zoolander center for kids who cant read good and want to do other stuff good too.” Finally, Coyle picked a decidedly in-joke winner: “The Paniagua Center for the Blind.”

Paniagua, a Spanish idiom for “bread and water,” was cycling slang in the early aughts for racing without the benefit of performance enhancing drugs, as Coyle and former Lance teammate Tyler Hamilton reveal in the The Secret Race. A riveting tell-all published last month, The Secret Race spells out how Armstrong’s United States Postal Service teams used banned substances to reach the pinnacle of their sport from 1999 to 2005. Although the book is Hamilton’s first-person account, Coyle did some additional investigative reporting to confirm Hamilton’s account, returning to a Rolodex he built when he wrote the single best book on Armstrong at the height of his competitive success, Lance Armstrong’s War. As potential white elephants go, he says, the multimillion-dollar Lance Center, which he last visited in 2011, is stunning. “It’s really a beautiful building. Part shrine, stuffed with his bikes and memorabilia, and part workout facility,” Coyle recalls. “It’s where the pool is.”

Nike spokesman KeJuan Wilkins said the company will change the name of the center, just as the company removed Joe Paterno’s name from its child-care center earlier this year. Nike would not elaborate on its sudden decision to fire Armstrong. But it’s worth noting that they are continuing their relationship with the Lance Armstrong Foundation. And while Armstrong has stepped down as chairman, he’ll remain on the nonprofit’s board.

Aside from renaming any modernist gymnasiums, is there more Nike will have to unwind? Any next shoe to drop in this sordid, never-ending saga? Well, Nike’s decision set off a rush for the exits. Anheuser-Busch/InBev (BUD), RadioShack (RSH), and 24 Hour Fitness, among others, have also said they’re either dropping Armstrong or won’t renew its contract with him when it expires. Of greatest symbolic significance, Trek Bicycles, which built every bike Armstrong raced on since 1999, also cut ties with the champion. Sunglasses and active apparel giant Oakley (OO) is waiting to see if International Cycling Union (UCI) will challenge the evidence against Armstrong released by the U.S. Anti-Doping Association before making a final decision about Armstrong, the Wall Street Journal and others report. UCI has until Halloween to do so.

There’s an outside chance that one or more of Armstrong’s sponsors will test the statute of limitations on breach of contract. Most sponsorship contracts in cycling following the 1998 Festina bust specified that athletes who tested positive for PEDs would have to return their sponsorship income. However unlikely, there remains the prospect of a full confession from Armstrong. One subplot to watch: that of Thom Weisel, the San Francisco financier who funded Armstrong’s victorious U.S.P.S. and Discovery Channel teams.

An alumnus of Montgomery Securities and founder of Thomas Weisel Partners, an investment bank, Weisel took up cycling in the early ’80s and later established Tailwind Sports to compete in cycling as a team owner and sponsor. He initially lost Armstrong to another team but later paid Armstrong his first million-dollar bonus, followed him in the pace car across the finish of Armstrong’s first Tour de France win (1999), and rode with him on his Champs-Élysée victory laps the next several years, too. In his 2003 memoir, Capital Instincts: Life As an Entrepreneur, Financier, and Athlete, Weisel noted that Armstrong was his golden goose, and Weisel credits himself as the architect (and sugar daddy) of the unprecedented success of Armstrong’s racing teams.

Crucially, as detailed by investigative journalist Matt Smith in a 2005 SF Weekly article, Weisel took over the regulatory arm of competitive cycling in the U.S. and, according to reports at the time in Outside magazine, Milwaukee Business Journal, and others, installed a broker at Thomas Weisel Partners as its president. Smith shows that at the peak of Armstrong’s Tour run—the period during which he stands accused of doping—Weisel, the owner of Armstrong’s team, also controlled the top American cycling regulator.

Despite some juicy heresy, no one has proven if Weisel was aware of the doping program he effectively underwrote all those years. Therein lies what could be the saga’s next chapter.

Wieners_190
Wieners (@bradwieners) is an executive editor for Bloomberg Businessweek.

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