When it comes to partnerships with other companies, it's often in the best interest of both of those companies to avoid negative publicity. But while this may be the ultimate goal, sometimes this isn't always the case and one bad decision could deeply impact both companies.
Such was the case for globally-known Nike and Texas' own Livestrong foundation recently after an investigation into blood doping ended in Lance Armstrong's admission to using performance-enhancing drugs to win his seven Tour de France titles. Now the two businesses are parting ways from what was once a mutually beneficial business relationship.
Livestrong, originally known as the Lance Armstrong Foundation, changed its name and removed Armstrong from its board of members last October when the U.S. Anti-Doping Agency exposed the doping program Armstrong's team had been involved in. Around the same time, Nike dropped its sponsorship of the bicyclist. But despite the removal of Armstrong, Nike still considered its affiliation with Livestrong to be damaging to their public image.
Instead of turning the split into a messy legal matter, the Austin-based charity and Nike ended their nine-year relationship, parting ways in what will hopefully end up being a strong move for both companies. Despite the visibility that Nike offered Livestrong, the company says that their foothold is still present and shouldn't be affected by the split. And even though, as a precautionary step, they have reduced their budget by 11 percent for 2013, the foundation says that their revenue is actually 2.5 percent ahead of projections right now and continuing to grow.
Although Livestrong knows that it will have to take extra care to avoid a scandal such as this from putting a mark on their name in the future, the company made it clear during this month's announcement that it will never veer from its mission to help cancer patients fight their illness and is positive about the new leadership the company has.
Source: CBS News, "Nike cuts ties with Armstrong's Livestrong charity," The Associated Press, May 28, 2013