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Doping Drama: Non-Endemics Not Likely to Stay

Published August 1, 2011

By Doug McClellan

The latest wave of doping allegations swirling around Lance Armstrong and other top cyclists will continue to scare big-name sponsors away from the sport, branding and marketing experts say.

And professional cycling’s image problem could get worse before it gets better, especially if reported federal investigations burst into the public eye with criminal indictments and trials, the experts added.

“Companies do branding and marketing because they want to associate themselves with something that people like, enjoy, look up to, and that brings positive qualities to their brands,” said Rob Housman, a sports branding expert and a former official in the drug czar’s office under President Clinton.

“If that’s what you’re looking for in your branding and marketing, when you find something—whether it’s an athlete, a team, or a sport—with enormous problems, the traditional company wants to stay as far away from that as humanly possible,” he added.

Housman is a partner at BHPi3, a branding and marketing company that pairs brands with athletes and celebrities.

Pro cycling’s troubled history is an immediate turnoff to many would-be sponsors, said Jim Andrews of IEG, a sponsorship consultancy and research firm.

“There are some sponsors who are very risk-averse and very concerned about image. For them, the history of doping—both the older and the more recent scandals—really keeps cycling off of their radar screens,” Andrews said.

A Fickle Situation. That isn’t news to Bob Stapleton, the owner of HTC-Highroad, which runs two of the most successful U.S. men’s and women’s teams. He said doping scandals have scared off potential title sponsors and could lead to the team’s dissolution.

In an interview on the eve of this year’s Tour de France, Stapleton said he would begin winding down team operations if no new sponsor emerged by the end of the Tour.

“The consistent feedback we get is that they (sponsors) love cycling and the fundamentals, but they’re concerned about the sport, and the non-stop drama around misconduct and doping,” Stapleton told the French news agency AFP. “Be it Alberto Contador, be it Lance Armstrong, be it Riccardo Ricco, whatever. And in a tough economy, with multiple sponsorship choices to make, people will see cycling as a challenging environment.”

The irony is that HTC-Highroad has taken a very public anti-doping stance. So has the Garmin-Cervélo team, which is also struggling to find another title sponsor. Riders from both teams participate in a testing program run by the Anti-Doping Sciences Institute that is independent from the UCI’s Biological Passport program.

Yet some teams that are in the doping spotlight have avoided sponsorship issues. RadioShack and Nissan, for example, announced at the start of the Tour they would extend their sponsorship of Team RadioShack for another two years, through 2013. Lance Armstrong co-founded Team RadioShack and raced for it until he retired from competitive cycling earlier this year.

Saxo Bank also announced it was extending its sponsorship of Alberto Contador’s team. The three-time Tour winner is under investigation for testing positive for a banned substance during the 2010 race.

“The sponsorship game in pro cycling is very fickle. I would like to be able to tell you that there is direct rhyme or reason, but that’s not really the case,” said Neal Rogers, managing editor of Velo magazine, formerly VeloNews.

Steve Johnson, CEO of USA Cycling, said the challenge of finding sponsors is frustrating, especially as participation in U.S. racing continues to boom. “The impact is probably more profound on the non-endemic sponsors,” he said.

Armstrong’s Appeal Lanced. Armstrong, the seven-time Tour de France champion, has firmly and repeatedly denied doping. He’s never been sanctioned for doping by cycling authorities.

In a recent denial, Armstrong tweeted: “20+ year career. 500 drug controls world wide, in and out of competition. Never failed a test. I rest my case.”

However, at least three of Armstrong’s ex-teammates have claimed that he used performance-enhancing drugs. Tyler Hamilton made the latest claim in a widely seen report on “60 Minutes,” which was broadcast in May.

Through his lawyer, Armstrong called Hamilton “a confessed liar in search of a book deal” and said the program’s reporting was “replete with broken promises, false assurances and selective reliance on witnesses upon whom no reputable journalist would rely.”

After the “60 Minutes” report, Armstrong sponsors Nike and Anheuser-Busch issued statements saying they continued to support the cyclist.

News organizations have also reported that federal authorities are investigating Armstrong and other cyclists for drug distribution and for possible fraud and conspiracy involving the use of funds from the U.S. Postal Service, which formerly sponsored Armstrong’s team.

Whether the allegations against Armstrong are ever proved, his image with American consumers has already suffered, according to The Marketing Arm, a Dallas promotion agency. The company produces the Celebrity DBI, an index that rates celebrities and athletes on criteria such as “appeal” and “trust.” The index is based on a national survey of 1,000 American consumers.

Armstrong’s scores have declined over the past 20 months. In June 2009, for example, 90 percent of consumers found Armstrong to be “appealing” to some degree. By May 2011, that number had fallen to 76 percent—a significant decline, the company’s Chris Anderson said.

Nearly 63 percent of consumers said they trusted Armstrong in June 2009 compared with 56 percent in May. Anderson said the declines reflect the continued doping allegations that surround Armstrong, magnified by his retirement.

Mud on the Track. As assistant director for strategic planning in the drug czar’s office from 1997 to 2001, Housman oversaw national anti-drug efforts in sports. Now he warns that cycling’s problems are about to get worse.

“You are going to see in cycling an enormous sea change in terms of this whole process of investigations,” he said. “There may be hearings. There’s a likelihood of indictments. All of that stuff is going to drag the sport through the mud in the United States in a way it never has experienced before. I don’t think they’re ready for it.”

Housman added, “Unless [the sport] handles this exactly right, unless they thread the needle in terms of how they respond to this, the sport is going to be fundamentally damaged for a good long time.”

But Velo’s Harris notes that professional cycling has survived several doping scandals and is considered to have cleaned up the worst of its problems.

“After the Festina Affair in ’98, after Floyd Landis was disqualified in 2006, every time people say, ‘this is going to kill the sport of cycling,’ and it’s still going,” Harris said.

“At the end of the day, they’re finding sponsors, their riders are making good money, and people are watching the races on television,” he added. “The sport continues on.”

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