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

[Scott SoCal]

You don't spend much time in Marketing departments. They positive-ROI everything. The years after weren't part of the deal. The deal, as I recall, was to promote USPS services in Europe at the time of the sponsorship deal.

The losses starting in the GWB era were because the administration forced the USPS to fund **all** of its future retirement obligations over a period of a few years. So, yeah, of course the topline number will be negative. As a semi-private service, they are generally accepted to run near break-even by Congress. For reasons I don't know or care to find out GWB decided to plunge the service into red ink.

It goes further back than the GWB period. The death of the modern pension started back with ERISA which goes back to the mid-1970's.

General Accounting rule changes over the years have forced both public and private employers to change how they account for their unfunded liabilities. Much of this was/is done to keep solvent the Pension Benefit Guarantee Corp for the protection of pensioners in the event of a bankruptcy.

EDIT; More speculation... for the purposes of the qui tam case the losses that USPS has sustained via accounting rule changes can easily be calculated and will likely not be considered.

Part of the damages the govt will claim is goodwill or brand. They probably can reasonably show what this as a dollar amount or there really would not be much point in pursuing the case. Civil cases are not that difficult to win but proving damages can be a whole different thing.

 

[BroDeal]

You don't spend much time in Marketing departments. They positive-ROI everything. The years after weren't part of the deal. The deal, as I recall, was to promote USPS services in Europe at the time of the sponsorship deal.

This. Just as the feds will use Armstrong's admission of doping against him, Armstrong will use USPS officials words against them. You can bet there are reports detailing the ROI for sponsoring its cycling team. This is especially true because there were many in the political realm who were skeptical or critical of that sponsorship. There was an incentive and need to justify spending the money. There will undoubtedly be not just reports but a lot of email where USPS officials gloat about the publicity. Sponsorship marketing reports tend to have dollar figures that are determined by calculating how much the publicity would cost if it were purchased by more direct means. To use purely example figures, Armstrong will be able to say the USPS itself calculated it had benefited to the tune of $60M.

If the feds want to counter and say that USPS is now tarred with doping then they will have to produce a dollar figure for that. It will be difficult to show all the genie's smoke has been forced back into the bottle because of an admission made years and years later. It will be hard to do because it will be hard to find actual damage from the association with Armstrong. No one blames USPS for Armstrong's doping; they blame him.

 

[Catwhoorg]

You don't spend much time in Marketing departments. They positive-ROI everything. The years after weren't part of the deal. The deal, as I recall, was to promote USPS services in Europe at the time of the sponsorship deal.

The losses starting in the GWB era were because the administration forced the USPS to fund **all** of its future retirement obligations over a period of a few years. So, yeah, of course the topline number will be negative. As a semi-private service, they are generally accepted to run near break-even by Congress. For reasons I don't know or care to find out GWB decided to plunge the service into red ink.

Didn't they change the basis as well. Something like a veteran who went on to join USPS had their pension fully funded by USPS instead of the military pot ?

 

[Race Radio]

I appreciate this on topic, on point post, amidst all the noise here, and though we have no way of knowing at this point, your prediction sounds reasonable to me. I would just reiterate that it was reported the Feds refused an offer of I think $5 (or was it 10??) million, so they must be pretty confident that they can get quite a bit more than that.

One thing I don't understand is how they determine the multiple of damages. E.g., suppose the court decided LA had cost USPS $5 million. Can the Feds automatically get three times that, or is the factor also subject to judicial review, and if so, on what basis do they decide?

According to several mutual friends who talked directly to lance prior to the Feds joined the case he offed $13 million and they wanted $20 million. I could be wrong on those numbers as it has been a while. I am pretty sure lance also sent me a message, when we were still talking, saying he offered $13 million. Will try to dig it up.

After the Feds joined the case I can't image the number went down as their position is significantly better. Lance was very vocally angry about this case to many people so for a while it was not hard to get a lot of information on it just by talking to various folks. To an extent I can understand why he feels that way but ultimately it has clouded his judgement and exposed him to a much larger potential loss then a settlement might have given him.

One of the key drivers that pushes him forward is he does not want to see Floyd get a dime. He has been vocal about this. The result is Floyd will likely get more then if Lance just settled.

Regarding the damages. I have still not seen a definitive position on if the judge will be able to calculate the penalty based on net benefit x 3. The question is more on the "Net Benefit" calculation then the treble damages calculation.

 

[Benotti69]

You don't spend much time in Marketing departments. They positive-ROI everything. The years after weren't part of the deal. The deal, as I recall, was to promote USPS services in Europe at the time of the sponsorship deal.

I rather eat my own *** than spend time near marketing.....

The losses starting in the GWB era were because the administration forced the USPS to fund **all** of its future retirement obligations over a period of a few years. So, yeah, of course the topline number will be negative. As a semi-private service, they are generally accepted to run near break-even by Congress. For reasons I don't know or care to find out GWB decided to plunge the service into red ink.

Lance's LIARS had a good track record till the 'reasoned decision' and it has been all downhill since. The tide has turned and it will take a lot Armstrong's $$$ out with it.

I am not sure Armstrong has got value for money with his legal team. But that makes me happy.

 

[thehog]

This. Just as the feds will use Armstrong's admission of doping against him, Armstrong will use USPS officials words against them. You can bet there are reports detailing the ROI for sponsoring its cycling team. This is especially true because there were many in the political realm who were skeptical or critical of that sponsorship. There was an incentive and need to justify spending the money. There will undoubtedly be not just reports but a lot of email where USPS officials gloat about the publicity. Sponsorship marketing reports tend to have dollar figures that are determined by calculating how much the publicity would cost if it were purchased by more direct means. To use purely example figures, Armstrong will be able to say the USPS itself calculated it had benefited to the tune of $60M.

If the feds want to counter and say that USPS is now tarred with doping then they will have to produce a dollar figure for that. It will be difficult to show all the genie's smoke has been forced back into the bottle because of an admission made years and years later. It will be hard to do because it will be hard to find actual damage from the association with Armstrong. No one blames USPS for Armstrong's doping; they blame him.

Excellent analysis. I guess the problem is that USPS in this case has in fact become the "government".

My feeling is that Armstrong will use the fact that the UCI allowed and enabled the doping thus it can't be considered "cheating" or "defrauding".

Let's see.

 

[Benotti69]

Excellent analysis. I guess the problem is that USPS in this case has in fact become the "government".

My feeling is that Armstrong will use the fact that the UCI allowed and enabled the doping thus it can't be considered "cheating" or "defrauding".

Let's see.

I think Armstrong can try to use the UCI allowed it angle but that would mean Hein going in the stand and I cant see that happening.

For Armstrong to negotiate his way through this he has to have his head together and be very very focused and that does not seem likely.

 

[thehog]

I think Armstrong can try to use the UCI allowed it angle but that would mean Hein going in the stand and I cant see that happening.

For Armstrong to negotiate his way through this he has to have his head together and be very very focused and that does not seem likely.

I don't think he needs or wants Hein on the stand.

Armstrong's ADHD means he kept all of his communications.

 

[Scott SoCal]

Deserves to be highlighted by a mod. Remember guys, be the goat.

What are you doing to this thread? USPS losses are relevant. The discussion of what might be included is relevant. How the government might come up with a calculation of damages is relevant.

 

[peloton]

Agreed, it is unfortunate that some are more intent on conflict then discussing the topic.

Lance was scheduled to go under oath in the Qui Tam case on Monday. This depo was put on hold by the judge while he ruled on Armstrong's attempt to quash. Not they he has ruled it can continue I expect he has given them some time, maybe a month, to coordinate their schedules for the various depositions.

Thanks.

One more question, apart from losing most of his money if found guilty (or responsible?), does he risk jail time for lying under oath?

 

[Race Radio]

I think Armstrong can try to use the UCI allowed it angle but that would mean Hein going in the stand and I cant see that happening.

For Armstrong to negotiate his way through this he has to have his head together and be very very focused and that does not seem likely.

It would only damage his case, which is why the government is requesting in discovery lots of documents about lance, and others, relationship with the UCI. Also requesting Depos from Hein, Pat, Leon, and Mario

http://www.scribd.com/doc/228466340/Gov-Witness-List

Lance's defense is "They should have known". Hard to say they should have known if the governing body of the sport is working to insure they would not find out.

 

[Race Radio]

Thanks.

One more question, apart from losing most of his money if found guilty (or responsible?), does he risk jail time for lying under oath?

Not for the Qui tam case.......however the variety of people who are testifying under oath could expose him, and others, to criminal penalties.

 

[Herbstrong]

if its such a slam dunk case for the Feds, why aren't other sponsors going after him?

 

[peloton]

Not for the Qui tam case.......however the variety of people who are testifying under oath could expose him, and others, to criminal penalties.

Thanks again

 

[Scott SoCal]

if its such a slam dunk case for the Feds, why aren't other sponsors going after him?

They will have to prove damage(s).

Trek certainly can't prove any. Nike? I doubt it. Oakley? Nope. CTS ? Nope. FRS? Dunno. Nissan? No. Honey Stinger? Doubtful? Anheiser-Busch? Nope.

Maybe RadioShack. Don't know.

Perhaps Livestrong will go after him. They can certainly show damage.

 

[Race Radio]

if its such a slam dunk case for the Feds, why aren't other sponsors going after him?

Great question!

Gotta think Nike, Oakley, and Trek do not have the same level of plausible deniability that the folks at the Post Office have. I can image the Postal folks being pretty clueless of the reality of the sport......no way Nike or Trek can say that. Also very easy to show they received a benefit, they sold lots of Madones and Yellow stuff.

Meanwhile, at the USPS, their stated goal was to increase European sales by sponsoring a European sport. Their European sales actually dropped during the sponsorship period.

 

[Scott SoCal]

Great question!

Gotta think Nike, Oakley, and Trek do not have the same level of plausible deniability that the folks at the Post Office have. I can image the Postal folks being pretty clueless of the reality of the sport......no way Nike or Trek can say that. Also very easy to show they received a benefit, they sold lots of Madones and Yellow stuff.

Meanwhile, at the USPS, their stated goal was to increase European sales by sponsoring a European sport. Their European sales actually dropped during the sponsorship period.

I think the real question is, during this sponsorship period, how were USPS sales in France?

 

[Granville57]

Maybe RadioShack. Don't know.

RadioShack Under $1: The Clock Is Ticking
http://blogs.wsj.com/moneybeat/2014/06/20/radioshack-under-1-the-clock-is-ticking/

 

[BroDeal]

Meanwhile, at the USPS, their stated goal was to increase European sales by sponsoring a European sport. Their European sales actually dropped during the sponsorship period.

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.

 

[Scott SoCal]

RadioShack Under $1: The Clock Is Ticking
http://blogs.wsj.com/moneybeat/2014/06/20/radioshack-under-1-the-clock-is-ticking/

I think they were crashing when they did the sponsorship thing in the first place. At the time of announcement, I remember it being a total head-scratcher. Iirc, the trigger puller at RS was a Lance fanboy. I don't think the business case for pro cycling sponsorship was ever very strong for them.

But, they might have a case if they choose to pursue it.

 

[Granville57]

But, they might have a case if they choose to pursue it.

Those Livestrong CB Radios never did deliver the anticipated sales, did they?

 

[thehog]

I think the real question is, during this sponsorship period, how were USPS sales in France?

You mean did international courier services between US & France/Europe increase?

 

[Race Radio]

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.

Facts, like this?

http://usgovinfo.about.com/cs/consumer/a/uspslance.htm

with a specific monetary goal of increasing [annual international] revenue by $20 million. However, despite the cycling team's outstanding performance and extremely high profile, revenues from USPS international operations in 2003 were actually $12.8 million less than four- years earlier in 1999.

Not sure were you got the $140 million number from, perhaps you made it up. The review by USPS showed $103 million.......the problem with these numbers is there were based on information given to them by guess who? Tailwind sports They were part of a last minute push to save the sponsorship when USPS was going to drop it. It failed

Sounds a lot like the Vrijman report. Paid for by lance, written by Stapleton, used as PROOF by the UCI

 

[Granville57]

However, despite the cycling team's outstanding performance and extremely high profile, revenues from USPS international operations in 2003 were actually $12.8 million less than four- years earlier in 1999.

And it started off so well.
http://www.nytimes.com/2000/07/23/business/responsible-party-gail-sonnenberg-trailblazing-for-the-post-office.html

In 1999, relationships with sponsors brought the post office $10 million [Gail Sonnenberg, senior vice president of sales] said, more than offsetting the cost of being the team's title sponsor.

After the victory last year, the Postal Service slapped its logo on biking paraphernalia and started selling it over the Internet. But that extra revenue may pale in comparison with the exposure that its best-known cyclist, Mr. Armstrong, brings to an otherwise banal brand.

''It's like traveling with the Beatles,'' Ms. Sonnenberg said, referring to the crowds that encircle Mr. Armstrong at races. ''This was an awfully lucky venture for us.''

 

[BroDeal]

Not sure were you got the $140 million number from, perhaps you made it up.

Perhaps I got it from an actual news report, you pompous troll.

http://bigstory.ap.org/article/armstrong-case-could-hinge-postal-benefit/

From 2001 to 2004, the USPS paid for annual reviews of its investment. According to the studies by the FCB and Campbell Eward marketing firms, the Postal Service's contract with Armstrong's team was worth close to $140 million in exposure in the U.S. and overseas from 2001-2004.

And stop going on about revenue or overall losses. Postal did not pay for revenue. It paid for advertising exposure. It received that in spades, and its overall performance has nothing to do with sponsoring a cycling team, other than it received more than it paid for. If a business going down the tubes pays for advertising, it cannot argue that it received nothing of value just because it suffered losses. A business can get what it paid for (or more) yet still lose money because of unrelated weaknesses in its business model.

As Granville indicates, Postal officials were thrilled about the experience and the exposure the service was getting. Discovery will undoubtedly uncover a lot of damning documents that can be used to argue against or mitigate damages. Just as Armstrong's words can be used to damn him, Postal officials' words can be used to damn the government's claim of losses.