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The blurred lines of Livestrong - the spin bike sham

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thehog said:
This caught my eye this morning along with the first comment on the Wired website. Now excuse my maths but I think the basic principle of my argument still applies....


Great review of the new @livestrongfit spin bike in @wired !! http://tinyurl.com/34p6v2x - Lance Armstrong Twitter feed.

The article reads:

The Livestrong Limited Edition Indoor Cycle differs from all other stationary bikes in just one way: It looks totally bad-***.

The bike, which comes in the trademark yellow-and-black colorway, will cost $1,700, $1,000 of which goes to Livestrong, Lance Armstrong’s cancer charity. Just 500 will be made, and there are several Lance and cancer-themed design flourishes: the number 28 on the fork represents the “28 million people living with cancer,” and the “seven stars on the seat post represent Armstrong’s record-breaking seven Tour de France wins.”

- What interested me most was that $1000 of the $1700 price tag goes to Livestrong.

The first comment below the article says:

-“Stepping back - its a cool product. It's a cooler gesture to be donating more than half the cost to cancer research. It's even a fair price for such a good looking piece of equipment. - I'll lobby my health club to consider a few of these and do the right thing”

On the surface $1000 out of $1700 does seem very good. To the casual observer that’s $1000 straight from the purchase for “cancer research”. If I was going to buy a spin bike I might as well buy this one because well over “half” is going to charity and its a good cause. The fact that it has the “28” logo down the side of the bike means it’s a representation of “cancer suffers” - again reasserting the theme its for "cancer research".

But this is where the Livestrong lines become very blurred. The $1000 is going to Livestrong.com or Livestorng.org? How can anyone really tell if the $1000 if for the "for profit" or for the "non-profit" entity? I would assume the .org enity?

Now if true then of that $1000 we know that a rounded 80% goes into "Programs" with the remaining 19% into “Admin/Fundraising”. So now we're down to $800 of the $1000. If we look that total revenue or donations/grants for “Programs” in 2009 was $31,000,000 (rounded). Travel was $2,000,000 and salaries were $6,000,000 and legal bills were a staggering $9,000,000. So if I subtract those figures away from the $37,000,000 I’m left with $14million or 37% of the “Program Fees”.

Therefore for the $1000 Livestrong donation became $800 for Programs only and 37% of this is for “awareness” program which results in $296. The $296 could go anywhere.... We’ll never know if that goes to salaries or bonus awards or to awareness programs but not cancer reseach as the first poster lamely suggests. (Although I think the marketing idea was to create the that very impression)

Now it’s a smart way of marketing a $1700 bike. You think it’s being rolled into the charity but in reality the it’s just funding more of Livestrong expenses. My assumption would be the $700 component goes to Livestrong.com for the manufacturing and distribution of the bike. Having Lance send a twitter about it adds to the feel that’s its “all for cancer”.

Cheap and nasty marketing if you ask me.

And for the life of me when they say $1000 goes to Livestrong I do hope at least this is the "non profit" entity. A simple Google search means you can only buy it from the "http://www.livestrongfitness.com/product/ls28ic/" - Livestrong Fitness.com site which is obviously for profit with the byline: "Join the fight
With each purchase, $1,000 will be donated to LIVESTRONG® to improve the lives of people affected by cancer
" - its the (R) which worries me the most.

For my newbie and rookie friends its worth reliving this thread. Has a lot of good information on Livestong etc.
Velocentric said:
I had a hobby. Once. Honest.

Something else that I'm looking as closely at as I can are the arrangements between LAF / Livestrong and the various Research Institutes around the World that are now Livestrong branded. For example, the Flinders Institute which Armstrong announced in January would become the Flinders LIVESTRONG Cancer Research Centre. (Press release here).

The funding for the building of this Centre comes from Local & National Government funding, public donations and corporate sponsorship. But it carries LIVESTRONG branding (even the car park "future site of..." sign) and according to a number of people I've discussed this with, Flinders will pay a licensing fee to Livestrong, (No word yet if that's LAF or Demand / CSE / whoever decides they own the rights at that time), for the use of the trade mark which it's 'expected' will increase public & corporate interest in donation.

I'm still waiting to hear back from Flinders about the existence or size of the licensing fee payable by them to Livestrong and what the benefits are expected to be.

My concern is this: if, as I've been told, they are paying an undisclosed licence fee to use a trademark of dubious provenance. How much do centres like this pay and where does the fee go?

This one makes me sick. You Aussies needs to sort this out!