Lance and le tour... new book

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Dr. Maserati said:
"Obviously the .org is the foundation, .com is a subsidiary of Demand Media. Both the foundation and myself have equity in Demand."
Lance Armstrong interview with ESPN.com in June 2009.

I can understand that the LAF make 'equity' from the association with Demand Media - but I dont see any reason why LA needs to profit also.
Lance is buying a new jet. Well this time he's buying an entire plane!

http://www.postcrescent.com/article/20091201/APC0101/912010456/1979/Lance-Armstrong-tweets-about-flying-in-out-of-Appleton

LAF needs a new 747 for their work.
 
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I think in defence of Wilcockson, even though he sits on the pro-Lance camp, when he does write his books, he does give a breif background of some of Lance's rivals. In 23 days of July, he gives a brief background on Jan Ullrich, Ivan Basso, and Tyler Hamilton. Same in his next book on the 2005 edition, where after each stage, he gives a chapter each on the likes of Zabriskie, Leipheimer, McEwen, Landis, Savoldelli, Hincapie, Rasmussen, Vinokourov, Beloki, Ullrich, Basso, Valverde (and I'm sure a bit is on Mancebo in the Valverde chapter) etc. I don't think I have the book anymore, but he gave a chapter on them after each stage, usually after the stage that they won (if they did of course).

But in my experience Matt Rendall >>>>> everybody else, for writing a book on Pantani, and his Victor Hugo Pena biography (I might just read that again in the near future).
 
Nov 2, 2009
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I'm at work and have better things to do than recreate the detailed posts I made (with supporting links) the last time some of the less-informed posters here brought up the "LAF is nothing but LA's alter ego and is bilking donors" nonsense. If you really care to know, then go search for them. If you don't care to know (and I suspect you don't), then why waste my time?

However, I can tell you (whether you believe me, that's another story) that I am a lawyer and have been working with wealthy individuals and charities for a number of years. I think I know a d*** sight more than most about how to evaluate a charity's activities.

Oh, and by the way, Hog ... a "foundation" is a charity, in the lay sense of the word. Technically, the term is a "non-profit organization," and there are two types: 1) public charities and 2) private foundations. The distinction is important only for tax purposes -- for example, donations to a public charity are deductible to a greater extent than donations to a private foundation. Private foundations must also follow much stricter operational rules, if they want to preserve their tax-exempt status.

The distinction between a "public charity" and a "private foundation" has nothing to do with the organization's purpose. Rather, the classification turns on the relative amount of income/donations received from the general public vs. from a handful of people. By default, a newly organized charity is classified as a "private foundation" until it can demonstrate that it receives a sufficient amount of "public" support under any one of several alternative tests.

I have not researched the history of LAF, but I suspect that it was orginally formed with a large contribution from Armstrong -- hence, private foundation. However, over the years, as it has drawn from more and more public sources -- government, individual and corporate -- it is now a public charity, just like any other. The fact that it has "foundation" in its name is meaningless. Many public charities do.

Also, there are many public charities that have "awareness" or "education" as a goal (e.g., Mothers Against Drunk Driving). If "awareness" was not a bona fide charitable purpose, the LAF would lose its tax-exempt status. Similarly, as I tried to explain (to those who cared to listen) in my earlier posts, joint ventures between charities and for-profit organizations are not uncommon, as charities are always looking for other sources of revenue besides donations. However, there are severe restrictions on what a charity can do in terms of joint ventures because Congress does not want them to compete with for-profit activities, since they would have an unfair competitive advantage since they are tax-exempt. If those rules are violated, the charity loses its tax-exempt status. So, a charity has to walk a very fine line when it involves itself in any way with a for-profit venture, which is just one reason why deals often have what appear to be strange structures.

People would be extremely naive to look at Armstrong's involvement in the LAF/Demand Media deal and the livestrong.com website and conclude that "oh, noes - it must be that Armstrong is milking innocent donors of millions!"

</lesson>
 
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Dominar said:
Also, there are many public charities that have "awareness" or "education" as a goal
the most notable over here being "make poverty history" which seems to do nothing but collect huge amounts of money to then spend publicising the fact that there are poor people in the world..

we where at a festival once where they had a stand and we asked what they do with the money from the wristbands.. they had no answers eventually digging out the top bod they could find who eventually mumbled that the money spent on the band went towards raising awareness..

great.. £2 for them to spend making me aware that people are poor.. genius... we never gave them a penny needless to say.. the white wristband was a fashion statement.. at least the yellow wristband achieves something..
 
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thehog said:
Lance is buying a new jet. Well this time he's buying an entire plane!

http://www.postcrescent.com/article/20091201/APC0101/912010456/1979/Lance-Armstrong-tweets-about-flying-in-out-of-Appleton

LAF needs a new 747 for their work.
Again, you are extremely naive if you think Armstrong must be taking $$ from LAF. (In fact, unless LAF is lying on their information returns to the IRS, he doesn't even draw a salary from them -- but hey, why let facts get in your way?)

By all appearances, Armstrong is a pretty darn good businessman (in fact, to the extent I admire Armstrong, it's primarily for this trait). He may not be all that educated or know much about finance, etc., but he does seem to read people very well and to make good, rational decisions. He is also willing to take risks like any successful entrepreneur. So, as long as he surrounds himself with a good team of advisors and can motivate them to work hard (which again, he seems to be able to do), then I have no doubt he could have taken the ton of money he's earned from endorsements, books, speaking/appearance fees, etc. over the course of his career and turned it into quite the diversified portfolio. If properly managed, it would be more than enough to support a very nice lifestyle in Texas, complete with private jet.
 

Dr. Maserati

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Dominar said:
<sniped for brevity>

People would be extremely naive to look at Armstrong's involvement in the LAF/Demand Media deal and the livestrong.com website and conclude that "oh, noes - it must be that Armstrong is milking innocent donors of millions!"

</lesson>
You still haven't managed to answer the simple question - why should Armstrong profit - even $1 - from the Livestrong name if as you say it is a charity recognized brand?
 
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dimspace said:
the most notable over here being "make poverty history" which seems to do nothing but collect huge amounts of money to then spend publicising the fact that there are poor people in the world..

we where at a festival once where they had a stand and we asked what they do with the money from the wristbands.. they had no answers eventually digging out the top bod they could find who eventually mumbled that the money spent on the band went towards raising awareness..

great.. £2 for them to spend making me aware that people are poor.. genius... we never gave them a penny needless to say.. the white wristband was a fashion statement.. at least the yellow wristband achieves something..
There are a lot of shams out there -- many people tried to make a buck by putting out various colored wristbands after the Livestrong bands became popular. Another example are the professional fundraisers who call me on behalf of" this charity or that. I always like jerking them around by asking them how much of each donation they get to keep vs. how much goes to the charity. By law, they have to tell me, but they dance and dance around the question until they finally hang up.
 
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Dr. Maserati said:
You still haven't managed to answer the simple question - why should Armstrong profit - even $1 - from the Livestrong name if as you say it is a charity recognized brand?
And you haven't managed to show me how he has profited -- other than by innuendo and supposition.
 

Dr. Maserati

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Dominar said:
And you haven't managed to show me how he has profited -- other than by innuendo and supposition.
Dominar said:
And you haven't managed to show me how he has profited -- other than by innuendo and supposition.
"Obviously the .org is the foundation, .com is a subsidiary of Demand Media. Both the foundation and myself have equity in Demand."
Lance Armstrong interview with ESPN.com in June 2009.

Where is there "innuendo and supposition" in those comments?

So again - why should Lance profit - even if it is $1 - from the Livestrong name if as you say it is a charity recognized brand?
 
Dominar said:
There are a lot of shams out there -- many people tried to make a buck by putting out various colored wristbands after the Livestrong bands became popular. Another example are the professional fundraisers who call me on behalf of" this charity or that. I always like jerking them around by asking them how much of each donation they get to keep vs. how much goes to the charity. By law, they have to tell me, but they dance and dance around the question until they finally hang up.
This is good point. There’s not many charities than can pass on large some of the donations to the actual people they say they are helping. However the Lance Armstrong case is different. There are no many charities/foundations who sidearm a "for profit" organisation with the same name to their charity/foundation. This is the real genius in what Lance does. The Salvation Army doesn’t have a “for profit” arm and at least when donating to the Red Cross in some way you know its going to assist in the work they support.

When it comes to LAF.org/.com/Livestrong you really don’t know if the money is to support the foundation is purely for profit.

Smart guy Lance. Not stupid at all.
 
Dr. Maserati said:
"Obviously the .org is the foundation, .com is a subsidiary of Demand Media. Both the foundation and myself have equity in Demand."
Lance Armstrong interview with ESPN.com in June 2009.

Where is there "innuendo and supposition" in those comments?

So again - why should Lance profit - even if it is $1 - from the Livestrong name if as you say it is a charity recognized brand?
I'm going to guess that Dominar doesn't understand what it means that Lance has an equity stake in Demand Media, and thus indirectly, in the various projects DM produces--including Livestrong.com.

And to answer your question . . . he shouldn't. Nothing stops him from making money on his own image and any new brand he creates, but he transferred the rights to Livestrong to LAF.
 

Dr. Maserati

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Publicus said:
I'm going to guess that Dominar doesn't understand what it means that Lance has an equity stake in Demand Media, and thus indirectly, in the various projects DM produces--including Livestrong.com.

And to answer your question . . . he shouldn't. Nothing stops him from making money on his own image and any new brand he creates, but he transferred the rights to Livestrong to LAF.
Actually 'Dominar' has already stated in a previous thread that they are a "top 10 law school graduate with 11 years of experience working with non-profits".
 
Dr. Maserati said:
Actually 'Dominar' has already stated in a previous thread that they are a "top 10 law school graduate with 11 years of experience working with non-profits".
Not a good look for that top 10 law school. Hopefully he or she won't identify the school. :rolleyes:
 
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thehog said:
This is good point. There’s not many charities than can pass on large some of the donations to the actual people they say they are helping. However the Lance Armstrong case is different. There are no many charities/foundations who sidearm a "for profit" organisation with the same name to their charity/foundation. This is the real genius in what Lance does. The Salvation Army doesn’t have a “for profit” arm and at least when donating to the Red Cross in some way you know its going to assist in the work they support.

When it comes to LAF.org/.com/Livestrong you really don’t know if the money is to support the foundation is purely for profit.

Smart guy Lance. Not stupid at all.

If you go to the website, you'll see there is no donation link for livestrong.com. Livestrong.org does have one.

Livestrong.com doesn't even sell anything. It's a general fitness site. Whatever income they make seems to be purely from advertising on the site... probably a very small amount. Perhaps it gets some income from reccomending third party health treatments or some such.

Livestrong.org is the charity. It does accept donations. It does have a store where proceeds do go to the charity. It doesn't have advertisements.

There is no crossover aside from the website name. The charity is NOT livestrong... it's the Lance Armstrong Foundation. There is no "livestrong" corporation operating for profit... the corporation is demand media. Yes, it's an attempt to drum up hits for the commercial website by using the same name as the well known charity. But there's no way to see where money intended for the charity could ever reach demand media.
 
There is advertising on the site. Not small brands either--Nissan, Apple, Nutrilite...I'm guessing that space and subsequent click-thru are not free. :)

The site sells advertising--that's a fact.

But there's no way to see where money intended for the charity could ever reach demand media.
Probably true, though it doubtless siphons site hits and therefore donations from the charity site. No question that's it's either intentional, known to those who monitor both sites' traffic, or both.
 
red_flanders said:
Probably true, though it doubtless siphons site hits and therefore donations from the charity site. No question that's it's either intentional, known to those who monitor both sites' traffic, or both.
In 2006 LAF was good enough to pay Armstrong personally $500,000 for use of the Livestrong name. That was good of him. The LAF also paid over 4million in 2006 for event planning to one consulting group. It should be noted that the 4million dwarfed any donation to any other group on the LAF books. That consulting group? Demand Media. Go figure.
 
Nov 2, 2009
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thehog said:
This is good point. There’s not many charities than can pass on large some of the donations to the actual people they say they are helping. However the Lance Armstrong case is different. There are no many charities/foundations who sidearm a "for profit" organisation with the same name to their charity/foundation. This is the real genius in what Lance does. The Salvation Army doesn’t have a “for profit” arm and at least when donating to the Red Cross in some way you know its going to assist in the work they support.

When it comes to LAF.org/.com/Livestrong you really don’t know if the money is to support the foundation is purely for profit.

Smart guy Lance. Not stupid at all.
There is absolutely no donor money going to the .com website. A quick visit to each website shows that all visitors to the .com website are redirected to the .org website if they want to make a donation. All apparel and other LS merchandise is sold through the .org website; there is nothing for sale on the .com website. The .com website's only income seems to be from advertising, which Demand Media apparently keeps as its part of the deal in exchange for creating and maintaining the site.

Q1: So, why would LAF set up the .com with DM?

A1: Simple. To increase its visibility and, by extension, increase both awareness as well as the number of potential donors. Demand Media knows how to market on the web. And since DM is a for-profit company, it's not going to spend its time on the project and get $0 in return ... hence, the .com is born, which brings in ad revenue, which then flows through to DM. Of course, LAF could have simply paid DM a flat fee for its marketing services to promote the .org site instead, but that would not have been as smart. For one, it would not have given DM the same sort of incentive it has now to efficiently and effectively promote the website and the Livestrong brand.

Q2: So, why did it have to be done as a .com and not through the .org site?

A2: Again, those pesky IRS rules. It had to be done as a joint venture through a .com, and not directly as part of LAF's .org website. First, a charity can't have too much "unrelated income," i.e., income that is not from its charitable activities, such as ad revenue. Second, a charity cannot benefit any private interest, except as a direct result of its charitable activities or through very specific and narrow statutory exceptions like paying reasonable compensation for services rendered. So, even if the .org website could generate ad revenue without running into a problem with the IRS, it could not have paid that ad revenue to DM.

Q3: So, why is Armstrong personally involved in the .com?

A3: Not being a party to the negotiations, I can only speculate. However, based on similar joint ventures I have been involved with, I can easily imagine that DM insisted on Armstrong's involvement as a means of protecting its own investment. They have to know that a tremendous amount of LAF's goodwill (and by extension, web traffic) is directly attributable to Armstrong himself. If Lance were to walk away from the project, DM would be left holding the bag. Therefore, they would have been well-advised to insist that Armstrong have some "skin in the game" also.

And as an aside, from what I recall reading, LA and LAF do not own a direct stake in the .com. Rather, they own a % of DM itself, which is involved in many, many different websites, not just LAF.org. Although there are reports that they made a "substantial" investment, we do not know what % of DM's total capital it represents. After all, DM has raised over $350M in capital. Even if 100% of the $35M Series D funding (issued in March 08, three months before the .com website was announced) was from LA/LAF, that's only 10% of the total, and is dwarfed by the $100M Goldman Sachs has put in.

Q4: What about the $$ paid to DM for "fundraising" services mentioned in another post above?

A4: I have not examined the IRS Form 990 for the year in question, and without access to the supporting documents, there's no way to know for sure. However, I can easily imagine that the $ represents fees paid to DM for its services to develop/market the .org website (before the decision was made to undertake the joint venture). Of course, it's only speculation, but knowing how closely the IRS monitors large charities, it certainly makes a lot more sense to me than the tangled web of deceit and self-dealing many of you imagine.
 
A

Anonymous

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Dominar said:
There is absolutely no donor money going to the .com website.

charities, it certainly makes a lot more sense to me than the tangled web of deceit and self-dealing many of you imagine.
brilliant explanation... thank you for that.. answers a lot of questions..
 
Nov 2, 2009
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thehog said:
In 2006 LAF was good enough to pay Armstrong personally $500,000 for use of the Livestrong name. That was good of him. The LAF also paid over 4million in 2006 for event planning to one consulting group. It should be noted that the 4million dwarfed any donation to any other group on the LAF books. That consulting group? Demand Media. Go figure.
I would be interested in a citation source for the $500K payment. Was it a purchase or a license fee? I am almost positive that I have read the Livestrong brand belongs to LAF, but I suppose it's possible they purchased it from LA once upon a time.

But even assuming your info is correct, don't you think that a mere $500K for the Livestrong brand (which the LAF uses to raise millions of $ through licensing, yellow bracelets, etc.) is still a huge bargain for them? I know I would pay that much for it in a heartbeat (assuming I could afford it!), if I could then reap the licensing benefits.

As for your second innuendo, payments to vendors for services rendered are completely different from distributions to charities (which is what I assume you mean by "donations"). Fundraising expenses are often a charity's biggest budget item. The real question is whether LAF received equal value in return for that $. And once again, I must assume that the IRS auditors would have something to say about it if the answer to that question was "no."
 

Dr. Maserati

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Dominar said:
There is absolutely no.......
<sniped for brevity>
Thank you for answering questions that no-one asked.

Perhaps I am not making my question complicated enough - why should Lance profit in any way through his association with the Livestrong brand - which you have already achknowledged is a recognised charity brand?
 
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Dr. Maserati said:
Perhaps I am not making my question complicated enough - why should Lance profit in any way through his association with the Livestrong brand - which you have already achknowledged is a recognised charity brand?
Not only that. He recognizes that the brand is valuable. The brand is an asset of the charity. It is no different than money in the bank or office furniture. That brand asset was built by the charity and with money from charitable contributions. In a bit of sef dealing, Armstrong gave the brand name to Demand Media. Instead of giving all the value to the charity, he cut himself in for a share. He might as well have stolen the charity's office computer equipment and sold it on e-bay.
 
Dominar said:
...all visitors to the .com website are redirected to the .org website if they want to make a donation.
This is really the salient point in all that.

"...if they want to make a donation". Exactly. Note how the brand "American Cancer Society" handles redirecting.

http://www.americancancersociety.orghttp://www.americancancersociety.com

They both AUTOMATICALLY redirect to http://www.cancer.org/docroot/home/index.asp You don't have to happen across the upsell module and actively click it. ACS wants ALL of it's traffic going to the .org. That's what you'd obviously do if you wanted to maximize charitable activity. That's what livestrong.com clearly does not want to do--maximize. They have a clear alternate goal, which is to make revenue from the Livestrong brand.

Now "http://cancer.com" may have already been taken when the American Cancer Society put up their website, maybe not. Maybe Ortho Biotech got there first. Point remains...

...if you wanted to maximize traffic to the LIVESTRONG.ORG charity, you would simply re-direct errant .com entries to the .org site. If you want to develop a for-profit lifestyle brand and sell advertising on it, you would not.

They do cross-sell to those who are motivated to donate. But they also get pageview numbers for every single errant visit, and you can be 100% sure those pageview numbers are used to determine the price of the ad space.

So at the end of the day, it's (as with all things Armstrong) a mixed bag. There is some legitimate effort to help the cancer community. Absolutely. But it always comes with a surprisingly high benefit rate to Armstrong. He's no Saint--he's a corporation. Not all bad, but hardly a purely charitable enterprise. If he were up front about it, fine. But he's not. Not even remotely.
 

Polish

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8 Foundations lag behind Lance Armstrong From the "First Call"

Numero Uno) Lance Armstrong (LAF)
2) Jolie/Pitt (UNICEF/Katrina)
3) Bono (for his work with RED)
4) Tiger Woods (The Tiger Woods Learning Center/Foundation)
5) Bill Gates (for various causes)
6) Al Gore (global warming)
7) George Clooney (Darfur)
8) Michael J. Fox (Parkinson's disease)
9) Peyton Manning (PeyBack Foundation)

http://www.brandweek.com/bw/content_display/news-and-features/promotion/e3i0b4b60847882d0b2f807dd71a80b9aa0

Lance's other New Book...out this week
http://www.radioshack.com/uc/index.jsp?page=researchLibraryArticle&articleUrl=../graphics/uc/rsk/USContent/HTML/pages/comeback20.html&noBc=true
 
Polish said:
Numero Uno) Lance Armstrong (LAF)
2) Jolie/Pitt (UNICEF/Katrina)
3) Bono (for his work with RED)
4) Tiger Woods (The Tiger Woods Learning Center/Foundation)
5) Bill Gates (for various causes)
6) Al Gore (global warming)
7) George Clooney (Darfur)
8) Michael J. Fox (Parkinson's disease)
9) Peyton Manning (PeyBack Foundation)

http://www.brandweek.com/bw/content_display/news-and-features/promotion/e3i0b4b60847882d0b2f807dd71a80b9aa0

Lance's other New Book...out this week
http://www.radioshack.com/uc/index.jsp?page=researchLibraryArticle&articleUrl=../graphics/uc/rsk/USContent/HTML/pages/comeback20.html&noBc=true

As usual..... that was a publicity contest and has absolutely nothing to do with the question of how much of the money donated actually goes to helping people.
 
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mattlamy said:
Well that's learnt me for writing the damn thing. Still, maybe my next one - I can't decide whether to do Saddam, Bin Laden or Ahmadenijad - will cause less grief.

But if anybody actually likes Lance then they might like the book.

As an aside - this forum is the only place I've ever seen people condemn a guy for being involved with a charity. ("Dr Barnado? He was a massive big head." "World Wildlife Fund? Where does that panda get off?" "Medecins sans frontiers? Don't doctors get paid enough without taking free exotic holidays too?")
Sorry, I don't usually reply to a post until I've read the whole thread but your Dr. Barnardo reference just raised my ire. To even compare this man to Lance Armstrong just takes the biscuit and shows you have no awareness of British and Irish history whatsoever. Whilst child abuse is still a massive problem worldwide, it is tiny in the areas directly affected by Barnardo and his contemporary Lord Shaftesbury compared to the scale of it 150 years ago. This is one of the reasons it is so news worthy now. It's no longer something the average person will walk past and say in their internal monoluge "well that is the social norm". This is Barnardo's legacy. Do you seriously think that in 150 years time there will be a single person who says "well we didn't know that cancer could sometimes be beaten until Lance came along"?

What has Livestrong changed? Are they doing more to find a cure than Cancer Research UK? Do they provide better support to current victims than Macmillan? Why does Charitywatch, as quoted by an earlier poster, give them a such a low rating? What is even meant by cancer awareness? Who is there in any developed country that isn't already aware of cancer and it's risks and probable causes and the basic treatment options before they even hit puberty? Awareness is of no importance. Finding treatments and providing them to the greatest numbers along with palliative care for the those who aren't as lucky as Lance, and their families certainly is.

I won't start on your obscene degradation of WWF and even worse MsF, but by even daring to compare Lance Armstrong to Dr. Thomas John Barnardo, you have guaranteed that I will never buy a book of yours, take any editorial you write seriously or believe any journalistic work you ever produce.
 

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