Armstrong says Postal Service reaped financial benefits from sponsorship
Lance Armstrong’s legal team released studies on Friday conducted by the US Postal Service saying the US government sponsorship of his Tour de France team produced a triple return on investment.
The documents were made public as the US government joined a lawsuit that claims Armstrong — who admitted to doping after being stripped of seven Tour de France cycling titles — defrauded former sponsor US Postal Service.
The lawsuit had been filed by Floyd Landis — a former Armstrong teammate who was stripped of the 2006 Tour de France crown for doping to which he admitted — alleging Armstrong defrauded US taxpayers by claiming he was winning Tour de France titles without taking performance-enhancing substances.
Armstrong attorney Robert Luskin said in a statement that talks with federal lawyers collapsed over how to measure damages, with Armstrong’s side saying the Postal Service reaped huge benefits from its cycling sponsor deal.
“Those talks failed because we disagree about whether the Postal Service was damaged,” Luskin said.
“The Postal’s Service’s own studies show that the Service benefited tremendously from its sponsorship — benefits totaling more than $100 million.”
To support the claim, Armstrong’s camp released sponsorship evaluations from 2001, 2002 and 2004 that attempted to place a monetary value on the exposure benefits to US Postal at that time.
The studies claimed that for $32.276 million spent by US Postal from 2001-2004, there was $103.636 million in publicity benefits with never less than a 300 percent return in investment in any year of the sponsorship.
There was no study to show any potential fallout in negative publicity from being attached to Armstrong’s now-tainted era in the wake of his confession to being a dope cheat in a television interview with Oprah Winfrey last month.
Links to the greatest doping scandal in cycling history could have provided damaging publicity and a more-recent negative payback for US Postal, already forced to stop Saturday delivery later this year because of financial woes.
Armstrong was stripped of his Tour de France titles last year after the US Anti-Doping Agency (USADA) uncovered overwhelming evidence, included testimony from 26 witnesses, that he was at the heart of a major doping conspiracy.
FCB Sports Marketing’s evaluation of US Postal’s 2001 benefits said that $6.138 million in sponsorship investment brought US Postal $18.539 million in exposure and global publicity could boost the value as high as $40 million.
The studies used equivalent costs of advertising time on television coverage of the Tour or print advertising in newspapers or on websites where mentions of US Postal or photos with its logo were shown.
Also measured was the value of Armstrong’s image with the US Postal logo in such areas as magazine covers, television talk shows, commercials for other sponsors such as Nike and other appearances and marketing opportunities.
Studies also recognized “intangible benefits” from Armstrong’s popularity at the time, but noted “there are no standards and the value lies with the individual corporation and their objectives.”
The 2002 sponsorship of $6.138 million was given a return value of $19.297 million, the $10 million in 2003 was given a value of $31.2 million and the 2004 backing, also $10 million, was given a value of $34.6 million.