Lance Armstrong case could hinge on USPS benefit

By Jim Vertuno

Associated Press

Published: Wednesday, May 1 2013 12:00 a.m. MDT

Armstrong's lawyers insist the Postal Service cashed in at a rate far greater than it paid out.

The agency was the lead sponsor for Armstrong's team from 1998-2004, a span that included six of Armstrong's seven Tour de France victories that have now been stripped away. About $18 million of that went to Armstrong, who at one point had an estimated personal fortune of about $100 million but has seen his endorsement deals vanish since a 2012 USADA report exposed the team doping program.

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.

The studies evaluated Postal Service market penetration in newspaper, broadcast, internet and magazine stories about Armstrong and his team. It also measured advertising by other sponsors such as Nike and Suburu that included Armstrong and the Postal Service team name, and even gossip-page coverage of his romance with rocker Sheryl Crow.

The 2004 report by Campbell Ewald also included notations about the potentially negative publicity of television coverage in New York City markets that noted drug allegations by Armstrong's critics.

"The U.S. Postal Service benefited tremendously from its sponsorship of the cycling team," Armstrong attorney Elliot Peters said when the government filed its complaint. "Its own studies repeatedly and conclusively prove this. The USPS was never the victim of fraud. Lance Armstrong rode his heart out for the USPS team, and gave the brand tremendous exposure during the sponsorship years."

A 2003 government audit criticized the sponsorship deal and said the government could only show less than $1 million in revenue over a four-year period as a result of the sponsorship. That report said tracking media exposure can be distracting compared with studying actual sales results. Postal Service officials disagreed at the time with that conclusion and argued that media exposure, not just direct sales, was considered an important part of the sponsorship.

Landis' attorney argues the benefit of exposure is implied in any sponsorship deal. That's why companies enter sponsorship deals with teams or athletes, Scott said.

Scott also suggested the Postal Service's reputation has been damaged since the revelations of Armstrong's cheating.

The agency will "forever be tied to the largest doping scandal in the history of sports," Scott said.

Orwig, the former prosecutor, questioned whether Landis or the Postal Service will be able to prove future damages based on an association with an athlete that expired almost a decade ago.

"That's speculative at best," Orwig said. "It will be appealing in a lot of ways, but it won't be legally solid."

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