Deal may keep Lance up front
By STEPHEN MANNING Advertiser library photo | Jan. 10, 2005
SILVER SPRING, Md. In the weeks before what would be Lance Armstrong's final ride in the Tour de France, Discovery Communications launched a media blitz across its cable channels for the cycling champion.
Discovery Health aired a show featuring cancer survivors telling how they were inspired by Armstrong's bout with the disease. On TLC's car makeover show "Overhaulin'," his rocker girlfriend Sheryl Crow had his Pontiac GTO souped up for him. TLC even aired a profile of his mother titled "Raising a Champion."
But with Armstrong now retired after his seventh Tour victory and with two years left on a three-year endorsement deal, Discovery must decide how to use its star now that he's stepped off the winner's podium for good.
"They went into this realizing there was going to have to be a life after this sponsorship," said Paul Swangard, managing director of the University of Oregon's Warsaw Sports Marketing Center. "They are banking on Lance remaining a piece of popular culture in the absence of him competing."
Armstrong and his cycling team signed a deal worth a reported $10 million annually with Discovery last year after the U.S. Postal Service dropped its contract. Discovery only required Armstrong to ride in one more Tour and knew he would likely retire before the contract expired, spokesman David Leavy said.
It initially seemed an odd move. The closest thing Discovery had to a star athlete was the Crocodile Hunter, Steve Irwin, best known for flinging himself onto wild animals. Discovery's brands such as Animal Planet, TLC and the Travel Channel do not carry sports programming, and the company does not sponsor other athletes or sports.
However, Discovery channels are now available in 160 countries, including regions of Europe where cycling is popular. Despite limited U.S. interest in the sport, choosing a cyclist fit Discovery's market, according to Leavy.
"To have Lance as a global icon, to be an on-air personality for us, opens up a lot of possibilities," Leavy said.
The Tour gave Discovery global brand exposure. The yellow leader jersey Armstrong wore for most of the race bore its logo. His teammates wore Discovery jerseys and shorts. News photos of Armstrong, arms raised as he celebrated his last Tour victory in Paris, all captured the Discovery symbol across his chest.
The network is now marketing cycling gear, including racing hats, shorts, watches, a DVD and a replica yellow jersey that sells for $149.95.
Armstrong said he plans to continue his television work. Discovery will sponsor the racing team until the contract expires.
Even as he retires, Armstrong has broad appeal to sponsors. He earned about $17.5 million last year on endorsements, according to Sports Illustrated, on deals with companies such as Nike, Subaru and Coca-Cola. As a sign of his marketing power, Nike has sold more than 50 million of the $1 yellow Livestrong bracelets to raise money for Armstrong's cancer foundation.
"Lance as a brand means a lot of things to a lot of people," Swangard said. "He doesn't necessarily need to be competing to reinforce that. He has built a lot of equity in the last seven years that will carry him forward."
Associated Press
Lance Armstrong and his cycling team signed a three-year endorsement deal with Discovery Communications in January reportedly worth $10 million. Discovery says Armstrong, even in retirement, is a "global icon" that "opens up a lot of possibilities."