Why Nike stands by Tiger Woods but dumps Lance Armstrong

After Tiger Woods admitted he cheated on his wife, sponsors by the score scurried away from the serial philanderer. Nike, however, which ditched Lance Armstrong as fast as it could after apparently incontrovertible proof surfaced earlier this week that the former cyclist cheated on the field of play, continues to stands by its golfer to the annual estimated tune of $20 million.

While both athletes may have let down their fan bases equally, their sponsorship situations differed dramatically, according to sports business experts.

“Where the line seems to be drawn for Nike, as an authentic sports-performance brand, is when your transgressions are [related] to the integrity of your performance as an elite athlete,” Kevin Adler, founder of Chicago-based marketing agency, Engage Marketing, told us by phone on Thursday. “That’s really an important distinction and a very stark contrast between Nike making the decision to stand by Tiger and choosing to disassociate itself from Lance.”

Armstrong, “the athlete,” Adler noted, “seemingly indisputably cheated in his sport and Nike had no choice but to disassociate themselves from that.”

Noted Smith College economist Andrew Zimbalist concurred.

“One fundamental and very basic distinction between Lance Armstrong and Tiger Woods,” Zimbalist told SBNation, “is that Lance Armstrong cheated to achieve his success in biking and Tiger Woods did not cheat ... to achieve his success in golf.”

The suits in Beaverton, Ore., apparently agreed. In an October 17 statement citing “seemingly insurmountable evidence” from the U.S. Anti-Doping Agency (USADA) that Armstrong used performance-enhancing drugs and “misled Nike for more than a decade,” the company joined RadioShack, Anheuser-Busch, and other sponsors in cutting ties with the seven-time Tour de France winner.

Nike, which markets athletic clothing, footwear, and equipment, will continue to back Armstrong’s cancer charity, though the former cycling champ -- who maintains he never used PEDs -- resigned as chair of his Livestrong foundation.

Nike’s history of endorsing sports figures who end up embarrassing its brand illustrates the risks companies assume when they associate their brands with athletes masquerading as role models. Its unofficial corporate policy appears to tolerate off-field misconduct from its stable of sports stars -- up to a point.

The company supported Kobe Bryant through 2003 rape charges brought -- and later dropped -- against the Lakers superstar. Nike stayed loyal to Ben Roethlisberger, despite multiple sexual assault charges that piled up against the Steelers quarterback.

And the swoosh remained an essential accessory to Woods’ golf gear even after several endorsers distanced themselves from the former No. 1 as his sex scandal went viral in 2009.

Nike athletes appear to cross the line when they are found guilty of crimes or of defrauding their chosen sports.

The company walked away from Michael Vick after he pleaded guilty in 2007 to dog-fighting charges. But the NFL quarterback was back in Nike’s good graces after returning to the football field following nearly two years in prison. Nike declined to re-ink a contract with Jason Giambi after the baseball player owned up to steroid use.

The case of Joe Paterno, a good friend of Nike co-founder and chair Phil Knight, seemed to fall somewhere in between. Until this summer, the company planned to retain the name of the disgraced Penn State football coach on the daycare center at its headquarters. After a July report accused Paterno of covering up the child sex-abuse activities of his ex-defensive coordinator Jerry Sandusky, however, Nike announced it would scrub the building clean of all things Paterno.

One reason that Woods’ disreputable antics escaped Nike’s public wrath was that he committed no actual crimes.

“Tiger was a serial adulterer,” Nick Green, president and founder of golf-marketing firm MacDuff Consulting in Bethesda, Md., said by phone Thursday, “and there’s no law against that, other than upsetting your wife.”

As for Armstrong, though Nike remained true to him even as whispers about his doping became shouts, the firm quickly severed all ties when USADA published its damning, 1,000-page report. Among other charges, USADA claimed that Armstrong operated "the most sophisticated, professionalized and successful doping program that sport has ever seen."

That was just too much for Nike to tolerate.

“Nike is an elite sports performance brand, so the fact that Lance cheated in his sport, Nike really had no choice in the matter,” said Adler, who pointed out the prominent particularity between Armstrong’s situation and that of Woods.

“You can theoretically be publicly associated with domestic infidelity and Nike, in theory at least, will continue to stand by you if you perform on the field of play,” Adler said.

Rumors swirled for years about PEDs and Woods, whose physique bulked up as he racked up major titles and his knee doctor pleaded guilty to distributing illegal drugs to professional athletes in the U.S. If actual proof ever appeared that Woods were a user, even the bread and butter of Nike golf would be sent packing, marketing pundits opined.

“Had Tiger’s transgressions ... been a massive career-long cheating scandal in golf, I would say it would be the same thing,” said Adler. “Nike would have no choice but to drop him because of his performance in the sport that they were associating themselves with.

“Tiger is the face of Nike golf, and Lance was the face of Nike in cycling.”