Oprah will see a boon from this. Others close to Armstrong, including Armstrong himself, won’t be so lucky. In order to be able to compete again, Armstrong has apparently agreed to testify and whistle-blow against “several powerful people in the sport of cycling,” The New York Times reports, which may include the International Cycling Union and the owners of his old cycling team which was sponsored by the United States Postal Service.
[More from Forbes: Lance Armstrong’s Dropped Sponsors]
Armstrong will take the first hit. You cannot erase decades of cheating and lying about it. In his meeting with Travis Tygart of the US Anti-Doping Agency, Armstrong apparently whined about being singled out, pointing to the fact that sports in general—football, baseball—are rife with drug cheaters. He’s right. He was singled out. And he deserved to be, not only for the cheating and the lies, but for the attempts to intimidate and destroy those who were seeking the truth about him.
We don’t know how much Armstrong is worth, financially. We know that his sponsors—Nike, Oakley, Dasani, Bristol Myers, the Discovery Channel, Michelob and Subaru—have fled. His moneymaking streams may now be dry. In 2005, Forbes estimates Armstrong was making $28 million a year from these deals. In 2009, he was making $20 million a year. The Wall Street Journal reported yesterday that last fall, Armstrong “took out a $1.85 million line of credit, secured by his home in Austin, which is valued at more than $3 million,” a sign that he may be preparing for the worst.
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Perhaps a book deal and some future “don’t be like me” speaking tours could help him recoup some of his losses somewhere down the line. But possible criminal and civil lawsuits could very well drain him now.
But Armstrong, with his admission, could very well take down a lot of other folks with him. The New York Times today wrote about Thomas Weisel, the financier and Silicon Valley investor behind Yahoo’s public offering. He was the co-owner of the United States Postal Service Pro Cycling Team, and is most likely sweating and lawyering up at this very moment. The Times reports that he could be subject to lawsuits from former sponsors looking to recoup some money.
But those sponsors may not escape scot-free, either. Indeed, Nike may be part of the collateral damage. A few months ago, the New York Daily News reported that Kathy LeMond, wife of American cyclist Greg LeMond, “testified under oath during a 2006 deposition that Nike paid former UCI president Hein Verbuggen $500,000 to cover up a positive drug test.”
The UCI (Union Cycliste International) is the cycling world’s governing body that oversees international events and metes out penalties for positive drug tests. Verbuggen was the group’s president from 1991-2005.
[More from Forbes: The World’s Most Valuable Sports Brands]
To be sure, the Daily News story reports that Kathy LeMond was not a firsthand witness to this alleged payment. She testified that a mechanic for Armstrong’s team told her of payment, which was supposedly made to cover up a 1999 positive test for corticosteroids.
To state the obvious, this would be a public relations disaster for Nike, one from which they might have a hard time recovering. Verbuggen could be in big trouble. So could Pat McQuaid, the current head of the cycling union.
And these folks and companies may just be the tip of the Armstrong iceberg.
More on Forbes:Lance Armstrong’s Dropped Sponsors
The Highest-Paid Athletes In The World
The World’s Most Valuable Sports Brands
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