Official Lance Armstrong Thread: Part 3 (Post-Confession)

[Wallace]

How much is negative publcity worth, a decade after the fact? There is no such thing as bad publicity, so it might even be a positive since USPS exposure continues long after sponsorship ended. It is the gift that keeps on giving. It certainly did not hurt Festina or Phonak.




um, the Olson incident was in 2007. Try again.

I realize that this is a very old truism, but I don't think it'll hold up in court. Besides which, it's completely untrue. For instance, GM has been getting a lot of publicity lately, but I don't think it's help their sales.

 

[BroDeal]

I thought, way back when the Qui Tam suit was first floated by Floyd, that it was explained on this forum and in news articles, that the damages the government could seek had little to do with whether the postal service received value for sponsoring, and were based totally on the contractual amount paid by USPS to Tailwind/the team/etc.

That is why they have trials. One side will advance the theory that they should be repaid and not have to account for any benefits accrued from the deal. The other side will advance the theory that the benefits outweigh what was paid so nothing is owed. Each side will use a legal theory to support its cause. The final judgement will likely be somewhere in between the two so neither party is unjustly enriched.

 

[BroDeal]

I realize that this is a very old truism, but I don't think it'll hold up in court. Besides which, it's completely untrue. For instance, GM has been getting a lot of publicity lately, but I don't think it's help their sales.

Yeah, it is an old adage but it will still be very difficult to measure the effect of "bad publicity" in this case and it may very well be a positive rather than a negative. Does anyone blame USPS for Armstrong's doping? $30M spent on a bad sponsorship is insignificant compared to $16B loss in 2012. Compared to news of that loss, old pictures of Team USPS look like images of happy times.

 

[86TDFWinner]

How much is negative publcity worth, a decade after the fact? There is no such thing as bad publicity

I beg to differ. If this were true, then ALL of his sponsors wouldn't have jumped ship on him so quickly. Most people despise Trek for their douchiness involving Wonderboy, I certainly will never give them a dime of my $$$, and I know SEVERAL casual riders, and cycling fans that won't either. That has MUCH to do with the negative publicity they've received over what they did.

I'd gather it's the same for Oakley/Livestrong/USPS/etc.

I get what you said from a marketing standpoint to a degree. But to say "there is no such thing as negative publicity" is incorrect here. It failed many people, in this PC world, "negative publicity" is something most businesses DO NOT WANT, and will do whatever it takes to shed that publicity.

Just MY opinion of course.

so it might even be a positive since USPS exposure continues long after sponsorship ended.

I'm not privy to the ins and outs of how the USPS is run and who ran it into the ground, but by recent current news of them losing billions yearly, and complete incompetence at the top, it wouldn't surprise me if they didn't make anywhere near that $103/140 millon some have suggested.


Just my opinion.

 

[Digger]

Race radio in another thread was saying jv is lances number one enemy...funny stuff comparing that line to the posts on this thread. Anyway this commentary on a highly secretive case is good stuff. Matlock!

 

[ChewbaccaD]

Probably the same part that you failed to understand when you accused me of making stuff up.



So now your argument is that the USPS did not receive $140M in exposure, it received $100M. That should go over real well.

This is classic Dr. M vortexing.



Again. Totally irrelevant. The salient point is whether USPS received the exposure it paid for. It did. If USPS could not turn its effective advertising into a profit that is on their head, not the avenue they chose for advertising.

No it isn't. You don't understand the case.

 

[M Sport]

Once the Feds joined the case they focused on "Unjust enrichment" which focuses on Armstrong, and others, not fulfilling the doping portion of the agreement in order to enrich themselves

Here is the Fed's revised complaint

http://www.scribd.com/doc/137774762/United-States-v-Tailwind-Sports-Lance-Armstrong

I still expect lance to push the net benefit angle but I doubt it will be successful

It appears one of the seven counts is for Unjust Enrichment. The other six are for damages suffered by USPS.

 

[Race Radio]

um, the Olson incident was in 2007. Try again.

Bro, please try to pay attention

Your favorite report, the one that claims sponsoring the team was worth close to eleventy billion dollars, includes 2005.......the year Lance was riding for Discovery. You do not have a problem with them tossing in a year he was not sponsored by the team but Ashely is off limits? Crow and wristband are also OK too?.....they are included in the elventy billion BTW

As you have appointed yourself as the arbitrator on what is ok to include where do you stand on the Mcconaughey years? Surely running shirtless on the beach has to be worth $10-20 million to those ungrateful folks at USPS. If it is OK to include when he was riding on Discovery why not Motorola? That has got to be another $10 million

 

[BroDeal]

No it isn't. You don't understand the case.

This is about damages. The fact is that USPS gained hugely from its sponsorship of Tailwind. Armstrong will argue for treble net damages, which may be zero or negative. The government will request treble gross. The law is no longer clear on treble gross or treble net so one side will likely appeal and the case will drag on for a long time.

 

[BroDeal]

Bro, please try to pay attention

Your favorite report, the one that claims sponsoring the team was worth close to eleventy billion dollars, includes 2005.......the year Lance was riding for Discovery. You do not have a problem with them tossing in a year he was not sponsored by the team but Ashely is off limits? Crow and wristband are also OK too?.....they are included in the elventy billion BTW
:

I don't have a favorite report. I referenced several reviews that were made in different years by two different marketing firms. You are the one who brought Olsen, an affair that took place three years after Postal ended its sponsorship.

The next thing you will tell us in your unhinged obsession about Armstrong is that his wristbands, cancer work, and celebrity did not bring any media coverage to him, his team, and his sponsors. You should tell Nike about your delusions. I am sure they would like to know their support of Armstrong's cancer awareness brought no benefits to the company.

 

[Race Radio]

It appears one of the seven counts is for Unjust Enrichment. The other six are for damages suffered by USPS.

There are different types of damages. One is what that we have been discussing, the net value of media exposure. If this was the sole measure of the case then Armstrong might have a chance, but it isn't.

Tailwind and the Government had a clear contract. Tailwind fulfilled part of the agreement, to generate publicity. They did not fulfill the other part, to not dope. The government is saying Tailwind deliberately lied and mislead the USPS about the anti-doping portion of the agreement in order to continue extracting payment from USPS, in this case about $40,000,000.

These types of agreements are common with the Government. It is not unusual for them to mandate for that a vendor must not only provide a specific service but that service has to be provided in a specific way. There are many examples of this. Minority own businesses, security restrictions, no foreign labor, minimum wages, even specific types of insurance. It is endless.

In this case Tailwind agreed to provide a service in a very specific manner. Clean. This manner was so important to the USPS they drew up a specific agreement to cover it. Tailwind ignored this agreement and deliberately mislead the USPS in order to get $40,000,000.

 

[Race Radio]

The fact is that USPS gained hugely from its sponsorship of Tailwind.

You haven't read the complaint have you?

 

[BroDeal]

You haven't read the complaint have you?

Not this sh!t again. It is RR's usual condescending assumptions about other posters. I did read the complaint. Six of the seven counts allege the U.S. has sustained damages. That looks hard to prove considering numerous USPS reviews and statements saying the benefits outweighed the costs by a long shot.

 

[Race Radio]

Not this sh!t again. It is RR's usual condescending assumptions about other posters. I did read the complaint. Six of the seven counts allege the U.S. has sustained damages. That looks hard to prove considering numerous USPS reviews and statements saying the benefits outweighed the costs by a long shot.

Again, you are caught up in the media exposure strawman. Lance would be happy to hear that

Tailwind lied to the government in order to falsely enrich themselves. USPS paid out $40 million on a contract that should have been void if Lance, Johan et al told the truth and followed the rules of the agreement..... they didn't.

Regardless if Lance and his buddies provided the service they did not provide it in the manner mandated by the contract. They lied and mislead the USPS in order to keep the money flowing. In Judge Willkins latest ruling he is clear that if Tailwind had followed the rules the contract never would have made it past 1995.

 

[M Sport]

There are different types of damages. One is what that we have been discussing, the net value of media exposure. If this was the sole measure of the case then Armstrong might have a chance, but it isn't.

My comment was specifically in response to your "the Feds are focussed on Unjust Enrichment'. It is apparent from the document provided by you that Unjust Enrichment is only one count of the seven against two defendants.

Tailwind and the Government had a clear contract. Tailwind fulfilled part of the agreement, to generate publicity. They did not fulfill the other part, to not dope. The government is saying Tailwind deliberately lied and mislead the USPS about the anti-doping portion of the agreement in order to continue extracting payment from USPS, in this case about $40,000,000.

These types of agreements are common with the Government. It is not unusual for them to mandate for that a vendor must not only provide a specific service but that service has to be provided in a specific way. There are many examples of this. Minority own businesses, security restrictions, no foreign labor, minimum wages, even specific types of insurance. It is endless.

In this case Tailwind agreed to provide a service in a very specific manner. Clean. This manner was so important to the USPS they drew up a specific agreement to cover it. Tailwind ignored this agreement and deliberately mislead the USPS in order to get $40,000,000.

I think most people here are clear on what the contract contained, I think most are even clear that Lance and Tailwind, etc breached, it's speculation over assessing the damages where things start melting down.

USPS need to prove they are in a worse position than if they did not enter the contract, all the media value, the sales figures, etc will be factors in that calculation but it will be more complex than that. Did USPS also have measures in place to mitigate losses, did they know or should have known about the doping, etc. [edit]It could be found that Lance breached but damages or damages due to his negligence was only $5 million or any other amount up to the claim amount.[/ edit]

Your quote earlier from the OIG was interesting.

We found the Postal Service was unable to verify sponsorships' financial performance ... the Postal Service does not have adequate controls and measures over the sponsorships.

 

[BroDeal]

There are different types of damages. One is what that we have been discussing, the net value of media exposure. If this was the sole measure of the case then Armstrong might have a chance, but it isn't...

And all the news reports on the case that have had lawyers familiar with such matters that say proving damages will be a sticking point are wrong

 

[Race Radio]

I think most people here are clear on what the contract contained, I think most are even clear that Lance and Tailwind, etc breached, it's speculation over assessing the damages where things start melting down.
.

I respectfully disagree.

For example*, lets say the Government contracts to by a widget and mandates that the widget is not made by slave labor. The vendor delivers a perfectly made widget that works great, but was made by prisoners in North Korea.....does the Government have any case if the widget worked perfectly?

In most past cases they have


*For example purposes only. Of course I do not think that Armstrong is anywhere close to North Korea

 

[uspostal]

Not this sh!t again. It is RR's usual condescending assumptions about other posters. I did read the complaint. Six of the seven counts allege the U.S. has sustained damages. That looks hard to prove considering numerous USPS reviews and statements saying the benefits outweighed the costs by a long shot.

BroDeal give up your never going to convince RR of anything concerning LA. Even if LA loses this whole deal the amount he has to pay will never be enough for him. If LA get burned at the stake, RR would be mad they didn't hang the man. Until Betsy is happy, RR will never be happy about anything concerning LA.

Advertising dollars spent have no correlation to the amount of return. If you spend 10 million dollars advertising a turd and don't get 10 million in return you can't just blame the advertiser, its a turd for gods sake.

 

[Race Radio]

And all the news reports on the case that have had lawyers familiar with such matters that say proving damages will be a sticking point are wrong

Likely because they did not actually read the filings.

I can understand why many are making this assumption. Lots of False claims cases damages are calculated like this but they are missing that this is based on unjust enrichment and false negotiation. The calculation will be based on how much the government would have paid if Armstrong and his buddies had not lied and deceived the government.

How much would USPS have paid if they knew Tailwind was running a doping program? Would they have renewed if they had not been lied to and mislead? Of course not. They would not have paid one cent if Lance and his buddies had not lied to them.

 

[Alpe73]

They would not have paid one cent if Lance and his buddies had not lied to them.

Floyd's buddy whistle was broken at the time.

 

[ScienceIsCool]

I respectfully disagree.

For example*, lets say the Government contracts to by a widget and mandates that the widget is not made by slave labor. The vendor delivers a perfectly made widget that works great, but was made by prisoners in North Korea.....does the Government have any case if the widget worked perfectly?

In most past cases they have


*For example purposes only. Of course I do not think that Armstrong is anywhere close to North Korea

I'm with you on this one. The facts support your position in its entirety. BroDeal, I accept your arguments, but they don't match the facts of this case.

John Swanson

 

[Granville57]

Since we seem to have a class reunion going on here...

Maybe the USPS did not want to exploit Lance, as per this article:
http://www.sportsbusinessdaily.com/...rity-USPS-Not-Out-To-147Exploit148-Lance.aspx

What's Your Priority: USPS Not Out To “Exploit” Lance

Published August 6, 2001

The U.S. Postal Service (USPS) spent an estimated $6M this year to sponsor the U.S. Postal Service Pro Cycling Team, according to Rick Westhead of BLOOMBERG NEWS, who wrote the agency began sponsoring the team in '95 to "help boost business overseas, where the sport is much more popular." But several sports marketers said that the "financially troubled" USPS "may have been better off using the money to keep mail rates down and improve employee morale."

Westhead noted team member Lance Armstrong has been used in "only two major advertising campaigns by the postal service in the past three years," and the USPS has "no immediate plans to capitalize" on Armstrong because it "doesn't want to 'exploit' him." But sports marketers "question that strategy by a quasi-government agency that has eliminated 21,000 full-time jobs" since '99. IEG Sponsorship Report Editorial Dir Jim Andrews, on the USPS: "If you're going to spend the money to sponsor the guy, then you want to exploit it to the hilt."

Westhead added the USPS has used Armstrong's image on the side of delivery trucks, on packaging for priority mail and in newspaper ads, and has also used corporate hospitality tents to promote the sponsorship. Otherwise, the agency "has taken a hands-off approach to its most recognizable endorser."

But USPS Senior VP/Sales Gail Sonenberg noted that the USPS "turns a profit on its cycling sponsorship" and said Armstrong "represents an awful lot of positive affiliation and you're not going to see us exploiting that."

Thomas Weisel Partners Founder Tom Weisel, a "major investor" in the USPS cycling team, said because of the agency's sponsorship of the cycling team, the USPS has "been getting new contracts," including Staples Inc. The USPS indicated it "may use Armstrong to promote its new three-year agreement" with U.K-based shipping company Lynx Express (BLOOMBERG, 8/5).

 

[Granville57]

Anyone want to dig up an old Vaughters' interview where he gives a figure for the value of Slipstream's media exposure?

No need to search far and wide, Bro. It's all right here on the CN forums.

JV provided some interesting info on the sponsor/financial return aspect of cycling teams. It's still hard for me grasp the effectiveness of it all though.

A: I am a little harder to schedule these days, huh? One of the things I’m doing is we just did our media evaluation with IEG – how much value your team has. And we’re pushing like $90 million in value. We may be the highest total publicity to investment dollar ratio in cycling ever.

Q – How do they track that?

A: Say for example a 30-second ad on one TV program costs $100,000. So 30 seconds of direct advertising to consumer costs $100K at this slot on TV. Or this amount of print costs this amount of money. Anything – print, tv, radio, whatever. So in the TV example, let’s say the program’s an hour long. 40 minutes of that is actual coverage. Of those 40 minutes, they find that Team Garmin received two minutes of direct commentary and in-focus logo exposure. If it’s out of focus, a helicopter shot where you can’t make out the jersey or whatever, then it doesn’t count. But if the commentators are talking about the team, the logo’s on screen and in focus, let’s say you get two minutes. If 30 seconds cost 100K, you’ve got a $400,000 value.

They do the same thing for print –what’s it cost for a full page ad? Now, what’s the word content for that amount of space, did you get a photo, did it not have a photo, and so on. And they have a calculus that if a full page in the NY Times costs X amount and you got a quarter page article and there was a photo, we’ll call that X dollars. Add it up worldwide and here you go.

Q: And you guys are the highest-producing team ever? Even over, say, Postal or Discovery?

A: I’m sure there are a couple of Lance years, like 2005, where they outstripped the total value but, put it this way, for a non-Lance associated team, it’s unprecedented. And they don’t count value in markets that don’t matter to Garmin. Meaning like, they don’t sell Garmins in Uganda, say, so if you get 20 hours of live coverage, it doesn’t count.

Q Is there any kind of qualitative aspect- the direction and trends of the coverage, so on?

A: Yeah, negative stories count as neutral or very limited. Positive stories are counted 1:1 with ad space. I was pretty pleased with the results. It’s $60 million just in TV. Once it gets to all the other stuff…

http://blogs.bicycling.com/blogs/boulderreport/jonathan-vaughters-interview-evolution-at-garmin-not-revolution

Good post, Granville.

 

[Cal_Joe]

Since we seem to have a class reunion going on here...

Thank you for resurrecting Polish, sorry he could not be here in person. Waiting now for Wonderlance.

 

[elizab]

As usual, Andreu Strategies leaves out important facts.

From 2001 to 2004, USPS commissioned annual reviews of its sponsorship. The marketing firm hired to do the reviews found the exposure was worth $140 million.

Yo Bro, you got me at Andreu Strategies. Can't stop laughing. And I think it's very funny you have RR working here. Actually, the morale is better here than at CSE but you seem to be content there

Carry on and pay special attention to pages 66 & 67....
Betsy (aka Besty)
CEO
Andreu Strategies