Bloomberg News

Armstrong Will Be Asked to Repay $7.5 Million to Bonus Promoter

October 22, 2012

Armstrong Will Be Asked to Repay $7.5 Million to Bonus Promoter

Lance Armstrong was stripped of all seven of his Tour de France victories today when the International Cycling Union, known by the French acronym UCI, said it wouldn’t appeal the penalty first imposed by the U.S. Anti-Doping Agency. Photographer: Ramin Talaie/Bloomberg

Lance Armstrong will be asked to repay $7.5 million given to him by SCA Promotions Inc., which guaranteed his bonus for winning the 2004 Tour de France.

Dallas-based SCA was sued by Armstrong and U.S. Postal Service team owner Tailwind Sports in 2004 for failing to pay a $5 million bonus owed to the cyclist for winning his sixth straight Tour de France, which came amid allegations of doping. It settled the suit in 2006, agreeing to pay the $5 million and $2.5 million in interest and legal fees.

Armstrong was stripped of all seven of his Tour de France victories today when the International Cycling Union, known by the French acronym UCI, said it wouldn’t appeal the penalty first imposed by the U.S. Anti-Doping Agency.

“We will make a formal demand for return of funds,” Jeffrey Tillotson, outside counsel for SCA, told BBC Sport today following the UCI decision. “If this is not successful, we will initiate formal legal proceedings against Mr. Armstrong in five business days.”

Tillotson didn’t immediately return an e-mail and telephone message left at his office.

Jeffrey Dorough, SCA’s general counsel, said in separate e- mails that the Dallas-based company was “considering all legal options to pursue a return of the funds paid to Mr. Armstrong,” and that SCA “fully endorses” any statement made by Tillotson regarding the company’s plans.

Armstrong’s original agreement with SCA didn’t include a doping clause and said that he would be paid if he was the official winner of the event.

‘Inappropriate, Improper’

“Mr. Armstrong is no longer the official winner of any Tour de France races and, as a result, it is inappropriate and improper for him to retain any bonus payments made by SCA,” Dorough said.

Tim Herman, Armstrong’s attorney, was in court and unavailable to comment on the statements from UCI and SCA.

The settlement agreement states that “no party shall challenge, appeal or attempt to set aside the arbitration award,” according to ESPN, which said it obtained a copy of the agreement.

Armstrong, who has denied doping during his career and said he never failed a drug test, has lost all of his sponsors since Oct. 17, when Nike Inc. (NKE:US) announced it was ending its relationship with him. Armstrong may lose $30 million in sponsorships, according to Steve Rosner of 16W Marketing LLC.

Livestrong Move

Nike’s decision came the same day Armstrong stepped down as chairman of Livestrong, the cancer foundation he founded which according to its website has raised more than $470 million since 1997.

USADA said on Aug. 24 that it would strip Armstrong of his Tour de France titles and bar him from all Olympic-related sports after he refused to fight the group’s charges at an arbitration hearing.

It released a 202-page summary of its findings on Oct. 10, stating that the 41-year-old Texan “engaged in serial cheating” throughout his career.

To contact the reporter on this story: Mason Levinson in New York at mlevinson@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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