A relationship that generated millions and branded Nike to what it is today has finally come to an end. After a nine year relationship, Nike is closing down its support with the Livestrong Foundation that former bicyclist Lance Armstrong has created to help cancer survivors.
The footwear company is pulling the plug on all Livestrong merchandise off of store shelves. I know exactly what all of you are thinking, “Wait a Sec! That means no more yellow Livestrong wristbands?” Yes this is exactly what it means. They are discontinuing all footwear and clothing, so the shoes you just bought last week that retailed over $100 will now be worth nothing. Nike has generated over 100 million in funds to the foundation since 2004 and during the time accounted for about a quarter of Livestrong’s average yearly revenue.
The foundation said that change in its relationship will have no affect on the services it provided to cancer survivors. Nike said they would continue the support in other ways, but they weren’t able to provide specifics at the moment.
The company ended the sponsorship last October after becoming aware to the news of Lance Armstrong using performance-enhancing drugs and lied to Nike for over a decade. Mr. Armstrong is now resigned from chairman of the foundation and dissociated himself from Livestrong.
Stores like Dick’s Sporting Goods and Sport Authority are now severely hurting due to heavy inventory of Livestrong merchandise of exercise equipment and clothing that failed to sell. Consumers have already turned their back on the brand that was once so dominating and meant so much. The foundation that is based in East Austin, Texas, is looking for a new outlook and a way of rebuilding itself to what it used to be. A Spokesperson for the foundation said, “We want to steer a strong and independent course that ensures the long-term health and sustainability of the organization.”
The foundation has derived 1/3 of its budget from corporate and licensing sponsors, 1/3 from events, and 1/3 from general fundraising, according to chief executive Doug Ulman.
Livestrong still has some corporate sponsors, and still in the works for seeking more. “The foundation has taken other steps to reinvent itself, including moving its “call-to-action” day—which was celebrated on the anniversary of Mr. Armstrong’s cancer diagnosis—to May 17, the day that its yellow wristband was introduced.” The foundation has started new relay marathons all throughout Austin, while ending the sponsorship with the Austin Marathon in April after three years being the top sponsor. Nearly 500 runners associated with Livestrong have already raised $250,000 this year.
I just feel that after the foundation was basically led by an imposter is going to be really hard for the company to regain its trust in its consumers and hard to rebuild itself after an impact like this.
WILL THE FOUNDATION BE ABLE TO REBUILD THEMSELVES AFTER NIKE DROPPING THEM?
WILL THIS AFFECT THE QUALITY OF THE SERVICE THE FOUNDATION PROVIDES?
10 thoughts on “Nike Relationship with Livestrong Charity Dies!”
I believe that the foundation will be able to rebuild itself if it focuses on its purpose. Even though Mr. Armstring was the face of the foundation, and is no longer seen in a positive light, the Foundation’s purpose is to provide cancer patients and survivors with funding and support. This is a very honorable foundation and should still receive support from the American people. Also, the loss of Nike’s support will greatly affect the Livestrong foundation for a few years, but I believe that they can survive the Lance Armstrong issue.
I saw this post coming a mile away; however, I didn’t see the sever or Nike and Livestrong coming. Nike, as arrogant as they are, did this because Livestrong products declined in overall sales. Nike probably cared less about the charity and are looking for one that will yield more revenues. Since the issues with Lance Armstrong and steroids you’d think Nike would care about this; alternatively, they don’t care about who takes steroids or not they care about how customers view the situation. Nike endorses many steroid users. Anyway, Nike truly lost sight of what the charity was trying to accomplish and they could have destroyed a great charity.
If Livestrong takes the time to find a new face for their brand then I believe they will be capable of rebuilding themselves. By changing their trade dress and associating themselves with a new athlete then people may forget the negativity that Lance Armstrong lefton the brand. Livestrong now has the opportunity to promote one of Nike’s competitors, which could bring them and another company back as a leader in the market.
It’s really a shame to me that Nike has decided to cancel its Livestrong products and correlation. It’s also unfortunate that the main reasoning behind this may have something to do with Lance Armstrong doping. Even though Livestrong dropped him, it was still not enough to sustain the cancer research fund. I also hope that Livestrong finds a new brand/company to take on its cancer research. It is a great cause, and it will be extremely upsetting if it ceases to exist.
This post raises an interesting point about the boundaries between companies and the famous people who serve as faces and spokespeople for them. In this particular case, it is rather clear that Nike had to discontinue the product, because the Livestrong brand was completely and utterly built around the image of Lance Armstrong: survivor and champion. Once he was exposed as a cheater and fraud, it forced the hand of Nike, who were definitely aware of the rumors surrounding the man for some time. It goes to show the risque nature of large brands and companies signing people to huge contracts and built completely around them. There is an absolute risk of injury, other harm, or worst, the person being declared a phony.
Everyone knows for sure that this decision is impacting not only sports store but also the people who have been so loyal to the brand. From a management perspective I can see that it was a smart idea to pull armstrong off the committee but the fact that the whole line will no longer exist will make nike take a big hit. A smart thing for Nike to do now is to bring on a new endorser for cancer awareness, so that they will not be losing as much and can still give to the cancer community. I do not think this will effect the quality of service that the foundation provides but I do think they should bring in another sponsor who has been through cancer because no one really knows how to help unless they themselves have lived it. I just hope Nike will make it through because it has been one of the mostly highly recognized brands and contributes to so many foundations.
I also agree with spr1321eboillot in that I believe the foundation will be able to rebuild itself with a focused on the true purpose. The main purpose of providing cancer patients and survivors with funding and support will shine and outweigh all of the negativity caused from Lance Armstrong’s decisions. Of course, Nike’s lack of support is going to cause the Foundation to suffer for a few years, however I believe it will be able to bounce back and regain popularity. I personally don’t believe the “quality” of service provided from the foundation will change after this.
I actually enjoyed this post because I am surprised by NIKE’s stance. Although, I understand severing ties with Lance Armstrong, why cut ties with the charity? Athletes get dropped all the time by their sponsors, but why drop the entire cause? Cancer is a very serious issue and no one person is bigger than its cause and good will. I hope NIKE teams with another good cause and continues to focus on the real issue at hand and contribute to that good cause and put it on the forefront just as the LIVESTRONG campaign was.
I believe that this foundation took a hit when the allegations against Lance Armstrong came out and were proved true. Yet, people need to realize that even though Lance Armstrong started the foundation and he ran the foundation, he is not the foundation itself. When people say “Livestrong” they do not think of Lance Armstrong as a cheater, but of the foundation in general and how it helps millions of people. Nike should try to sell the items, or if they don’t want too, donate the money quietly and sell other products to help out that foundation.
Lance denied using performance increasing drugs for years, but the lies finally caught up to him. The second I heard the news I knew he was going to lose most, if not all, of his sponsors, which would also affect his foundations. I believe that after a certain point Lance had realized that there’s no turning back, because he knew that the exact fate would happen. Nike helped raise millions of dollars towards the foundation by selling wristbands, shoes etc and it’s truly a huge loss now that they’re gone, however, I can see why they would do that.