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Confession could be bad for Lance Armstrong's bank account

Now that he has admitted to using performance-enhancing drugs, Lance Armstrong could face a plethora of lawsuits from agencies and sponsors that can say they were defrauded.

January 16, 2013|By David Wharton
  • Lance Armstrong could face a plethora of lawsuits from agencies and sponsors who can say they were defrauded.
Lance Armstrong could face a plethora of lawsuits from agencies and sponsors… (Getty Images )

Now that Lance Armstrong has finally admitted to using performance-enhancing drugs during his storied athletic career, the shamed cyclist could be pulled into courtrooms around the globe for legal battles with people seeking millions of dollars.

That's one of the many downsides to the confession of a once-adored athlete who for more than a decade not only denied doping but aggressively counterattacked his accusers.

But a significant question remains about whether there is an upside to his coming clean in an interview with Oprah Winfrey scheduled to air later this week.

The confession potentially represents a first step in trying to rebuild his tarnished public image. It might also help in persuading sports officials to reduce his lifetime ban so that the 41-year-old might someday compete in sanctioned triathlons and marathons.

Armstrong faces an uphill climb.

"For him to chart a course to redemption is really complicated and would take a lot of time," said Adam Hanft, a branding and crisis communications strategist. "It's not going to be reversed with a TV appearance."

In his 21/2-hour interview at a downtown Austin, Texas, hotel, Armstrong was forthcoming about the doping allegations that dogged him during a career that included seven Tour de France victories, Winfrey told "CBS This Morning" on Tuesday.

"I don't think 'emotional' begins to describe the intensity or the difficulty he experienced in talking about some of these things," she said, declining to provide further details.

Armstrong has come under increasing pressure in the months since the U.S. Anti-Doping Agency enforced the ban and issued a 1,000-plus-page report that accused him of leading "the most sophisticated, professionalized and successful doping program that sport has ever seen."

With 11 former teammates providing depositions, he was stripped of his Tour championships and lost several big-money sponsors, including Nike, that had made him one of the sporting world's richest endorsers.

Now, Armstrong stands to lose a large chunk of his personal wealth, reported at about $100 million.

His most pressing concern appears to be a federal whistle-blower lawsuit filed by former teammate Floyd Landis, who was stripped of the 2006 Tour de France title for doping. The suit accuses Armstrong of defrauding the U.S. Postal Service, which sponsored his racing team for a number of years.

Armstrong's attorneys have met with government officials to discuss, among other things, how much the Postal Service was actually damaged by his misconduct, according to a person with knowledge of the situation who is not authorized to speak publicly.

During those talks, settlement figures were discussed, the person said.

A lengthy federal investigation into Armstrong and his team was dropped early last year without charges being brought. It remains to be seen whether the criminal statute of limitations has elapsed, but the Department of Justice could join in the civil suit.

The False Claims Act, the basis of whistle-blower suits, carries heavy penalties, including triple damages and fines, said Mike Morse, a Philadelphia-based lawyer who specializes in such cases.

"Violations of the federal False Claims Act can expose him to some really significant monetary damages," Morse said. "There could also be a whole host of private lawsuits."

Reacting to early allegations of Armstrong's doping, a Dallas-based promotional company declined to pay him a $5-million bonus for winning the 2004 Tour de France. He sued and received a $7.5-million settlement.

Now SCA Promotions plans to sue Armstrong to get its money back. "We do expect to file soon," said Jeffrey Dorough, the company's in-house counsel. "We don't know what impact the interview will have until we see it."

The government of South Australia state has said it will seek to recoup several million dollars in appearance fees paid to Armstrong for competing in the Tour Down Under from 2009 through 2011.

The Sunday Times in London has already filed suit to recover $500,000 it paid Armstrong to settle a libel case.

The cyclist might find any courtroom to be hostile territory, given that he adamantly denied doping for more than a decade and used his popularity to wage public battle against critics.

"Now he's saying, 'You know what, I was lying all these years,' " said Stuart Slotnick, a New York City business litigator. "How can a jury ever trust him?"

In the hours before Monday's interview, which will air Thursday and Friday on the Oprah Winfrey Network, Armstrong took time to stop by the cancer-fighting Livestrong Foundation, which he founded in 1997.

The cyclist, who recently left the foundation board, apologized but did not make any specific statements, according to the Associated Press. Some of the 100 staff members in attendance reportedly broke down in tears.

The public at large might not be as sympathetic.

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