So Lance Armstrong (Probably) Cheated. Now What?

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Even without positive drug tests, I think it's likely that Lance Armstrong cheated -- there's too much evidence stacked against him. Even Armstrong's most trusted confidant, George Hincapie, was likely going to testify for USADA . Many Armstrong fans are currently in denial about what his refusal to fight the charges really means, but I think that will change as we find out more during his compatriots' arbitration.

"But Chris, he passed every drug test!" My response is that no one is threatening to put Armstrong in jail for this. The burden of proof isn't a "beyond a reasonable doubt," as in a criminal trial, but "to a comfortable satisfaction." That is defined by the World Anti-Doping Code as "greater than a mere balance of probability but less than proof beyond a reasonable doubt." This is the standard USADA follows, and I think it's the appropriate one if we're to disincentivize clever athletes from doping. I'd also remind the reader that eyewitness accounts constitute direct evidence, not circumstantial evidence as commonly claimed.

The real tragedy of the Armstrong affair isn't that Armstrong (likely) won with help from cheating, but that others lost because of it. Who knows? Maybe if the USPS team hadn't doped we'd be singing the praises of a clean athlete who unfortunately -- thanks to doping -- never got his shot. Or maybe if no one had ever doped, Armstrong would still have been the best in an all-clean sport.

I realize that Lance must find all of this terribly unfair. As the old saying goes "Everyone was doing it," and he was just doing what was necessary to achieve his dream after a near-death experience. I bet Armstrong truly doesn't believe he cheated because of this. (I call this the Gattaca defense.) But thanks to USADA's vigilant prosecution of cheaters, hopefully no young athlete will have to face the awful choice Armstrong circa-1998 had to make.

I bet that secretly pleases him. 

Stand by your man
The good news for Armstrong is that it appears his sponsors are staying put. Nike (NYSE: NKE  ) is standing by the cyclist: "Lance has stated his innocence and has been unwavering on this position. … Nike plans to continue to support Lance and the Lance Armstrong Foundation, a foundation that Lance created to serve cancer survivors."

The story is the same with Budweiser brewer Anheuser-Busch (NYSE: BUD  ) . Paul Chibe, Anheuser-Busch's VP of U.S. marketing, said in a statement, "Our partnership with Lance remains unchanged. ... He has inspired millions with his athletic achievements and his commitment to helping cancer survivors and their families." 

Oakley sunglasses, which is a subsidiary of Luxottica (NYSE: LUX  ) , is taking a more lukewarm but still supportive approach. "As Lance's longtime supporter and partner, Oakley respects his decision and his restated commitment to focus on the foundation he created to help battle cancer," Oakley said in a statement. "Oakley supports its athletes who respect and honor the ethics of sports until proven otherwise."

Thanks to Lance's refusal to fight the charges, he will never be "proven otherwise." Perhaps that is the point. 

Is it good for business?
RadioShack  (NYSE: RSH  ) still hasn't issued a statement either way, but my hunch is they will stick around like the other sponsors. Their corporate citizenship page still sings the praises of Livestrong.

Despite the likely cheating, it's hard to deny what Armstrong did was a tremendous physical achievement. Nike's sponsorship still makes some sense because of this. Heck, if Nike can stand by Tiger Woods, it can certainly stand by Armstrong. 

I'm not sure if the sponsorship still makes sense for Luxottica, RadioShack, and Anheuser-Busch. These companies have little to do with athletic achievement (though Luxottica may beg to differ). Their partnership with Armstrong is more based on his character and charity, and more importantly the public's perception of his character and charity. The latter has obviously taken a beating in the past week. 

What do you think?

Fool contributor Chris Baines is a value investor. Follow him on Twitter, where he goes by @askchrisbainesChris' stock picks and pans have outperformed 96% of players on CAPS. He owns no shares of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (13) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 28, 2012, at 11:54 AM, mikecart1 wrote:

    The cyclist Armstrong beat for nearly a decade are just jealous that a cancer survivor with everything against him was able to destroy them over and over for 7 titles and many other victories. They hate that he was never caught and they hate waking up everyday wondering how someone that nearly died was able to beat them no matter what they did and no matter what they used. This is human nature. They can't live with the fact that this has occurred and everyday that pain just gets worse and worse.

  • Report this Comment On August 28, 2012, at 12:11 PM, bignort2001 wrote:

    I don't think the above comment means that he didn't cheat. My only problem with Armstrong is that he most likely cheated, and denied doing it. In a sport where everyone has cheated or is cheating, a simple claim that "I did what everyone else did, and could not have won without cheating", would mean much more than lying about never cheating.

    Mikecart is correct, in that his competitors cheated as well, and just couldn't beat Armstrong.

  • Report this Comment On August 28, 2012, at 12:11 PM, EnigmaDude wrote:

    If you have not yet seen it, Lance responded with a statement published in the Washington Post:

    And donations to the LiveStrong foundation have increased since this news broke!

    So I would disagree with your statement that the public perception of his character has taken a beating. If anything, the USADA is the one taking a beating!

  • Report this Comment On August 28, 2012, at 12:40 PM, Momentum21 wrote:

    My biggest gripe with Armstrong is that he has used his fame, power and wealth to bully others at various times in the past. If his sponsors remained by his side throughout that they clearly aren't going to take the moral high ground now.

    I don't take pleasure in seeing these titles taken away from him however. The cheating ran so deep that I don't think that it benefits anyone go back and try to bring these results to justice. The sport itself was a huge beneficiary of Armstrong's fame and is as guilty as he is of deception (if he is in fact guilty).

    I still follow him on Twitter and from time to time feel that his net benefit to society is positive. So I guess I am guilty in a way given what I know.

    We all love us a good hero and Lance's story is difficult to release given his charismatic presence throughout his career and current role as an ambassador for Cancer Awareness.

    I don't think we should cut him any additional slack because of it, but perhaps all of us need to do our part and expand our definition of what being a hero is all about...Lance was just giving us all what we wanted in a way that no one else ever could.

    Mikecart1 - what are you talking about? : )

  • Report this Comment On August 28, 2012, at 1:15 PM, rpl3000 wrote:

    How about we put this in a different context.

    Your neighbor has insider trading knowledge and gets rich. You are a working bum, trying hard to save and invest but get nowhere or do as good as everyone else (average). Years later you find out that your neighbor gets caught on an insider trade, or more specifically is somehow damned by some evidence. Whatever, you dont know the details. The only thing is, he used his riches to build up a do-good image so everyone likes him. The scandal does little financial damage to him because he's got connections from making awesome trades and like I said people love him because he's such a household name. Meanwhile, you sit there and look at your portfolio saying WTF? I followed all the rules and this is how I get rewarded?

    All cheats need to be punished. Otherwise what kind of example are we giving to developing kids?

    I've been on both ends of this scenario because I also race bikes at the pro level in the US.

  • Report this Comment On August 28, 2012, at 1:38 PM, Momentum21 wrote:

    rpl3000 - I don't think that anyone would dispute that cheats need to be punished but this situation does not resemble the insider trading scenario you outline above. The entire system was complicit with this activity and one point.

    In this situation we are also no longer talking about a criminal case whereas the insider trader you describe would make the guy you describe a felon. Martha Stewart is a good example and she is back in action too.

    As parents we set an example for our kids so that when they have to make a career decision and they are asked to do something "wrong" they make a choice in keeping with their values. If they do something wrong and get punished they accept the consequences and hopefully learn from it.

  • Report this Comment On August 28, 2012, at 1:42 PM, drax7 wrote:

    Armstrong is a hero to everybody. What are the motives behind the USada inquisition , we finally have a winner and all they want to knock him down. There must be a political twist here that escapes me. Somebody wants to gain at his expense.

  • Report this Comment On August 28, 2012, at 1:43 PM, mmDOLLARFOOL wrote:

    My first comment, would be let's see the proof first and foremost.

    After that, if proven then strip the titles and let's give them to ....... perhaps the guy who came in dead last.....what's the chance he cheated?

    This crap has gone on long enough.....for pete's sake Clemens won his case and people are still talking like he wont get voted to the hall of fame on first ballot.....why not? If you're going to believe those "proven guilty" why would you not believe those "proven innocent" (notice the quotes around the word proven....) btw not a Yankees fan at all...

    The problem (and I am a huge sports fan, dedicated single digit golfer, take care of myself and workout relgiously) is sports are too much a part of society......people should be saying who gives a $ht ...... this crap doesnt matter on iota in real life.....he knows if he cheated and that's all that really matters....

    How about the media spends as much time on who may be able to fix the country's real problems and less on who cheated in sports?

    I mean nothing makes me more angry than seeing my elected officials having hearings on doping in baseball...who gives a $ht.....

    Hey Washington have you seen the nation's debt? ....

  • Report this Comment On August 28, 2012, at 2:16 PM, rpl3000 wrote:

    Momentum21 - I guess what I was trying to get across is that our society rewards the cheats in a backwards way. Just like Martha Steward never really got hurt by her mistake (financially, or namesake), Lance will remain a hero because thats what the people want. This goes across all sports too. NFL guys get in fights, drive drunk, do HGH, murder (ray lewis anyone?) and we forgive them because we want to see huge hits on sunday. Fans want home runs, so we forgive baseball players.

    I'm sure we see the same thing in the corporate culture too. A bank makes mistake (or cheats), goes default then get bailed out. Who losses? Where's my bailout? I didn't do anything wrong. I pay my loans.

    It's dissapointing that poor choices get rewarded time and time again.

    I'm also happy for all the people who say "who gives a **** ". I'm glad you have never been cheated on or taken advantage of in your perfect life. Its not just sports, its a culture.

  • Report this Comment On August 28, 2012, at 2:25 PM, mhonarvarthe2nd wrote:

    all the 2nd place guys "cheated" too....means don't bather watching or paying attention to it anymore.

  • Report this Comment On August 28, 2012, at 2:43 PM, eibe wrote:

    clean sport? Especially in cycling?? Come on, give me a break.

    Lets propose a fictional bet:

    There is Doctor-Know-it-all, that can correctly answer the question weather an athlete was doped. The bet is:

    At least 80 of those people that finished Tour de France in 1st, 2nd, 3rd place in the last 30 years were doped. You are offered even odds on that bet. Which side would you take?

    I would bet on the at least 80 side.

  • Report this Comment On August 28, 2012, at 5:35 PM, vegaland wrote:

    Due to a lack of evidence, they couldn't charge Lance in any legit court. So they came up with a kangaroo court in which no evidence need be submitted for examination and no witnesses may be questioned on their carefully prepared scripts.

    Franz Kafka where are you when we need you?

  • Report this Comment On August 28, 2012, at 11:05 PM, TempoAllegro wrote:

    This is sad - when so many former athletes are admitting to doping and also accusing a much-loved cancer-survivor.

    You say Lance's reputation for character and charity has taken a beating in the last week because admitted dopers have accused him of something?

    And you remind ME that "eyewitness accounts constitute direct evidence?" Is that all? The way you are talking I would think eyewitness account constitute a direct route to the electric chair! How about if you provide a link to a U.S. government site that let's me check on that myself, at the risk of you becoming something like an eyewitness yourself to the fact that eyewitnesses are so darn good?

    Seriously, if we are talking about U.S. government standards, let's be clear. We agree on the criminal standard - beyond a reasonable doubt. Now, in the USA I remember, the civil case standard should be "a preponderance of the evidence" and whatever other definition that doping commission is using really ought to be the same so it is clear and consistent. Even if you argue it is a higher standard they are using, it should be thrown out, and they should start over clearly in an unbiased civil court rather than this commission, since they can't get it right.

    It's hard to believe someone who beat cancer like Lance did and won the Tour as many times as he did cannot face this now, but he has his reasons. And the funny thing is that going back into the past is not helping anyone here, because in the minds of millions Lance won those races and if you choose an unknown to retroactively crown him, it will only hurt the sport, not Lance. Properly testing current athletes and pursuing current allegations to the fullest extent possible is the way to go, not digging up ghosts from the past.

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