Like a lot of star athletes, cyclist Lance Armstrong racked up plenty of product endorsements along with his big wins. But in Octobera week after the U.S. Anti-Doping Agency published a report on allegations that Armstrong and his teammates cheated for yearshis brand-backers started backing away from the former champ, who within days was stripped of his seven Tour de France victories. Nike Inc., Trek Bicycle Corporation, and a score of others bid Armstrong and his tarnished image goodbye.
Endorsement agreements can be high-risk, high-reward propositions. Corporations are banking on a positive association with the star, but there’s plenty of room for things to go wrong. And when they do, says Richard Grant, managing partner of the Los Angeles office of McGuireWoods, “it’s critical that the brand be able to take action to protect themselves.”
