Sunday, January 20, 2013

Lance Armstrong: His reputation or his revenues

A family friend was recently questioning the potential impact Lance Armstrong's confession would have on his business profits. Word has it millions are at stake. There's that whistle blower case the federal government has against him, which Armstrong is set to testify at in the near future. Then there is the possible lawsuits that may arise from his sponsors who understandably feel duped by the doping allegations. Undoubtedly, Armstrong took a major risk by agreeing to come clean.

Lawsuits were expected, as Armstrong's legal advisers likely warned him before his Oprah interview. But there was something that was overlooked: his reputation. See, Lance Armstrong is a brand name, one whose success relies on public perception. To succeed, consumers must link a brand name to a positive image. Negative publicity naturally has an opposite effect: it can ruin a product.

When allegations first hit the media, there was a great deal of sympathy for the seven-time medal winning cyclist. Criticisms against the decision to strip Armstrong of his medals reverberated across the media lines. Still, there was the impression that the accusations would not harm Armstrong all that much, maybe because they were vehemently denied. And corporate sponsors pulling their support was expected, because alas, there were reputations to protect. Whether or not Armstrong was doping was irrelevant in the grand scheme of things. What really mattered is how likely it was that Armstrong actually did use these super performance drugs.

The situation is different now. Scrolling down my twitter feed, the headlines were not as optimistic as they were in the past. In fact, they were downright judgmental, and maybe his confession played a big part. Maybe not. Either way, his brand name has been tarnished and that, I believe, is worse than losing a few million dollars. Finding a new revenue stream is as easy as switching up your business strategy, but bouncing back from a bad reputation is not as easy.

Let's be clear, Armstrong's critics were apparently not upset at the confession in and of itself. What has them all up in a tizzy is how he reacted to the allegations. He was crass to anyone who broached them. Let's face it, the media's job is to uncover the truth and it plays a huge part in how brand names are perceived. They have the power to make or break a product, and Lance Armstrong was and continues to be a very impressionable product. One that is potentially looking at a diminishing shelf life right now.

Let me state that I am very disappointed by how Armstrong handled this whole affair. Sure he was brave to finally confess, but it was influenced by his desire to compete again. In other words, it was a selfish act. And that, to me, is worse than losing millions of dollars.

The way I see it is that Armstrong did not owe anyone a confession. What his sponsors, supporters, and fans do need though is an apology. It might just save his reputation and in turn salvage his business.

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