End of an error
April 23, 2018 § 27 Comments
“I’m looking forward to devoting myself to the many great things in my life – my five kids, my wife, my podcast, several exciting writing and film projects, my work as a cancer survivor, and my passion for sports and competition,” he added. “There is a lot to look forward to.”
That’s the sound bite from Lance Armstrong expressing his satisfaction at shaking off the last chokehold remaining from his years as Public Doping Enemy No. 1, as he settled the government’s lawsuit against him that had threatened to crush him with a $100M civil fine. But like all sound bites that Lance crafts, this too was simply a mask. In my opinion, the heart of the matter is likely this: He is, for Lance, flat fucking broke.
When you peer into the press photos, to say nothing of the facts, what you see is an old, beaten man carrying the haggard skin from his decades in the pro peloton, and the sunken eyes of a frightened defendant torn between pouring millions into the maw of his rapacious lawyers on the one hand, and living in terror that losing his case would mean complete financial annihilation.
Although various analysts have called Armstrong’s settlement a “win,” to his credit that’s a truckload of bullshit he doesn’t try to foist off on the rest of us. Better than anyone else, Armstrong knows that just because you didn’t get kicked off the team, it doesn’t mean you won the Tour.
Why did he settle?
The most common statistic I hear bandied about, and the one that jives with my own experience, is that less than one percent of all civil cases go to trial. There are three reasons for this: Money, money, and money.
Small cases don’t go to trial because they are too expensive. No one spends $25,000 to make $5 grand.
Big cases don’t go to trial because they are too expensive. No one wants to put their financial future into the hands of a “jury of their peers.” There’s always the chance that these are the peers who elected Trump, and everyone knows it.
That leaves, for the most part, medium-sized cases. They, however, only go to trial under a narrow set of circumstances. First, both sides must have a strong and viable theory of the case. Second, both sides must be able to financially afford a worst possible scenario outcome. Third, at least one of the two sides must be ideologically and irrevocably committed to their own sense of justice, so much so that nothing short of total vindication at trial will suffice.
Armstrong’s case was a big one. By the end of the summary judgment phase it was clear that $100 million in damages was never going to happen, but some lesser multiple of the $32 million that USPS had paid Armstrong was in play, and there has never been any indication that he could weather a financial Armageddon of that degree. More about the likely precarious state of his finances later, but he recently claimed that his doping travails have already cost him in excess of $100M. Various sources have said that before the fall Lance was worth $125M, and another similarly made-up amount puts his net worth at half that. If these numbers are even sorta-kinda in the ballpark, there is no way that Lance could have survived losing this case. Therefore, there was virtually no way the case would have gone to trial.
But even if it were a medium-sized case, it would have faced huge obstacles getting to a jury. Both sides did have strong and viable theories. Lance’s argument was that USPS got more than it lost, and he had expert testimony that would substantiate the claim. He also had the subsidiary argument by implication that a quasi-governmental agency accustomed to billions in annual losses could never prove that Lance’s doping had inflicted any meaningful loss to its bottom line.
The problem that Lance was going to face was the lineup of witnesses who the government planned to call, each one testifying, in effect, to the fact that Armstrong was a liar, a cheater, a bully, and an asshole. It is certain that Armstrong’s attorneys had exposed focus groups to the government’s arguments, and it’s hard to see how the average juror wouldn’t be disgusted by his personal behavior. That’s not supposed to sway the jury’s evaluation of the facts, but it invariably does.
The government had a good argument as well, namely that the negative dollar value of the bad press was greater than the amount they paid for the sponsorship. As long as the government could show they had a net loss of so much as a dollar, then Armstrong would lose. The government also has a nifty track record in False Claims Acts cases — 95%. Good odds, I would say.
But there were some turds floating in the government’s punchbowl, too. The feds have a terrible record getting convictions against doped athletes, and although this wasn’t a criminal case, seeing Barry Bonds and Roger Clemens walk likely played out in the government’s analysis as well. Moreover, Armstrong was going to level the howitzers on the government’s economic analysis, and you can bet neither their experts nor the witnesses for the USPS were looking forward to being cross examined about the state of that august agency’s financial health–before, during, or after Lancegate.
All of this is another way of saying that as far as their theories of the case, both sides had a strong and viable argument, and both sides knew that their own position had some some hair on it. A jury trial couldn’t be ruled out, as these are precisely the scenarios that go to trial.
But after eight years of litigation, one of the parties absolutely could not afford a worst-possible case outcome. That party was Lance. If you think this hasn’t crushed the life out of him, look at his photos. He has aged immeasurably in the last eight years, and the word “careworn” comes instantly to mind. He was highly motivated to settle this case because as he repeatedly said, a loss would “put him on the street.” Finally, neither party was ideologically committed to the righteousness of their cause. Lance has spent so many years admitting his wrongdoing that even though he still believes the case was “unfair and without merit,” there was zero fire in his belly. Lance the champion who always played to win had become the beaten down old man who now understood that sometimes you really don’t get a second chance.
Likewise, the government no longer seemed to much care about anything other than saving face, something that wouldn’t happen with a defense verdict. Even their wording was lackluster, as assistant U.S. attorney general Chad Readler announced the settlement by saying it “demonstrates that those who cheat the government will be held accountable.”
Given the amount of the settlement–$6.75M–and the amount that we’d heard for the last eight years that Lance was potentially on the hook for–$100M–the settlement demonstrates anything but. To the contrary, the settlement demonstrates that both sides were staying up late at night worrying about a bad outcome, and no amount of tequila was blotting out the demons.
It’s impossible to conclude that the settlement was anything but lose-lose for both parties who were facing the potential catastrophe of Armstrongageddon. The U.S. government wasted untold millions because it swallowed the USADA lie that, with regard to Armstrong’s doping “The evidence shows beyond any doubt that the US Postal Service Pro Cycling Team ran the most sophisticated, professionalized and successful doping program that sport has ever seen.”
Kind of falls flat after you learn how to say “Grigory Rodchenkov” and realize that compared to the state-sponsored doping of Russia (not to mention East Germany), Lance’s antics were those of a third-rate bully in a fourth-rate sport. And it falls even flatter when you look at Chris Froome. “Lance Armstrong was the worst cheater ever until the next Tour champion,” may ring with something, but it’s not indignation or righteousness.
Anyone who thinks Lance came out a #winner is a bleeding fucking idiot. A quick look at the docket report on PACER shows no less than nine lawyers representing Armstrong’s interests, lawyers who presumably bill at $800/hour and up. Eight years of litigation involving four non-party respondents, a private plaintiff, the U.S. government as intervenor, and ten defendants would have cost Lance in excess of $2M per year simply to deal with the filings and appearances of the other parties, as well as litigating his own defense. A one-month trial in which half of the government’s witnesses were called could have easily cost Lance another million given the payroll of his legal battalion, and my guess is that they don’t take PayPal or IOU’s scrawled on the back of a napkin.
If Lance started with something around $125M, and lost $100M including legal fees, it’s easy to see that the only money he has left are his two homes ($9.25M in Aspen, $7.5M in Austin), and the balance that he has stuck away in retirement accounts to insulate himself from bankruptcy should he really lose all the marbles. In fact, in his settlement agreement, he promises to make the payments within one year and to put a lien on his Austin home as collateral, guaranteeing that he will make the payments. Should the home sell before his settlement payments are made, he will collateralize his home in Aspen, again as a guarantee. I don’t think that Bill Gates would have to put a lien on his home to pay a $6M fine.
All of this strongly suggests that Armstrong is anything but cash rich. Far from being able to reach into his hip pocket to satisfy the settlement, he is plainly dependent on the sale of his Austin home to make good. And none of this takes into account the outstanding legal fees he surely has yet to reckon with. So for the Betsys and Kathys and Gregs of the world, you can all take solace in the fact that Lance is having to hustle for every spare coin under the couch cushions, pretty much like everyone else.
Landis, a pithy guy if ever there was one, said it this way: “Lance benefited the most, but he has paid the most.”
The real financial crunch is the one that’s coming
On the other hand, getting this beast off his back is only the beginning. Lance now faces that most pedestrian of life challenges, commonly known as “getting a job.” His press release points us to all the great things that lie ahead:
- My five kids
- My wife
- My podcast
- Several exciting writing and film projects
- My work as a cancer survivor
- My passion for sports and competition
I hate to be the bearer of bad tidings, but the five kids and the wife (minor detail: Lance is single) are definitely not going to help with the income generation part of the equation. In fact, accustomed as they are to a $7.5M home in Austin and a $9.5M home in Aspen, my hunch is that no one is going to be particularly happy when Poppa Lance announces “Beans for dinner!” for the third time this week.
Which brings us to the podcast. Inconveniently, this appears to generate zero revenue. More inconveniently, it sucks. I struggled through his first Tourcast last year before concluding that the “brash young kid” from Texas was now just an “annoying old asshole” blabbering from a trailer. You can package it any way you want, but no one is making a fortune off of podcasts, although rumor has it that one especially enterprising old blogger pays for his coffee habit with $2.99 subscriptions to his cycling-related blog. Said old blogger will be happy to offer Lance some advice. For a fee, of course, and unlike those other lawyers, this one does accept PayPal.
Of course the podcast idea lurches from ridiculous to sad when we read that Lance has “several exciting writing and film projects.” This has BOLD-FACED LIE stamped all over it. Why? Because no one in the history of the alphabet has ever found writing to be “exciting.” Drudgery? Sure. Compulsive? Absolutely. A horrible albatross? Every time! But if you think writing is “exciting” you have never come up against rejections, deadlines, editors, editing, audiences, markets, costs, advertising, reviews, critics, social media, and the discipline of churning out shit in the hope that it will somehow become, if not a diamond in the rough, at least salable manure in the garden section of Home Depot. In other words, if it is “exciting,” you are not a writer. You are a delusional moron with a word processor, which, come to think of it, is pretty much the same thing.
Work as a cancer survivor? My memory is dim here, but I seem to remember that Lance unceremoniously resigned from the cancer charity he created when it became clear that he had lied for years about his doping. What will the new foundation be called? Livesomewhatstrong? Livestrongish? And how will it generate enough money to add a loaf of white bread to the beans? Speeches and lectures? “How I ruined my career as a lying cheater, blew through a marriage, Sheryl Crow, Kate Hudson, a ranch, $100M on lawyers, disappointed a generation of cancer survivors, and came back to thrive as a champion of cancer survivors.” I hate to sound cynical, but this is exactly how cynicism sounds.
Last and least we come to Lance’s passion for sports and competition. Again, my memory is foggy, but hasn’t he been banned for life from cycling? And although he is now allowed to compete in non-cycling events, it’s hard to see him gaining traction in the shot-put, pole vault, or synchronized swimming. But you never know.
And in this case, neither does Lance, because his sports company, WEDU, is yet another known unknown. Or is it an unknown unknown? From the Washington Post:
He’s working on a sports-endurance brand he calls WEDU. Though a formal launch isn’t expected until later this year, the company has already staged endurance rides in Texas and Aspen, Colo., and sells hats and shirts on its website. It eventually could encompass training, a charitable arm and more original content, like the two podcasts Armstrong hosts.
I am afraid I read that right. Lance is going to rebuild his fortune staging endurance rides, and by selling hats and shirts. Now, then. I have a friend who stages an endurance event, singular. Note to Lance: My friend still has a day job.
Additional note to Lance: I also have a friend who makes a living selling t-shirts. He works about 50 hours a week DOING NOTHING BUT THAT. And as a side note, he’s been doing it for 30 years.
These #fakeplans beg lots of questions. What will the rest of the “WEDU” slogan be? “Drugs”? And I hate to call a non-sequitur a non-sequitur, but how is a charitable arm going to make money? I thought that charities gave money away? The idea that WEDU will “encompass training” is about as tantalizing and novel as the idea that WEDU will encompass an app that lets you track your rides, compete with others, enroll in premium services, and award KOMs and QOMs for segments.
And I suppose that when you are the Washington Post, on deadline, and getting paid to write non-sequiturs, you totally let it slide when Lance says he will have “more original content.” Never mind that a real journalist would have asked:
- Written about what?
- Written by whom?
- Purchased by whom?
- Purchased for how much?
- Delivered through what medium?
- Paid for through advertising, subscriptions, or a combination thereof?
Rather than wait for WaPo to, you know, do its job, I hustled over to the WEDU web site, and I’m sorry to report that it consists of a Shopify storefront with hats and tees, and a signup for a century ride in Texas and a 50-miler in Aspen, both of which have already occurred. This is either the sign of someone who a) isn’t serious about anything, b) someone who doesn’t need the money, or c) someone who doesn’t have a fucking clue. I’m guessing a) and c). Your opinion may vary.
In any event, I’m available to advise Mr. Armstrong should he need direction regarding how to generate original content. And my first piece of advice will be: DON’T.
Original content, along with a can of beans, is what’s for dinner. Please consider subscribing … Click here and select the “subscribe” link in the upper right-hand corner. Thank you!
Yours is the most forthright article that I’ve read about Armstrong in a long time.
Thanks! I’m sure he will love it.
The “Drugs?” line had me falling off the toilet, laughing…
Thank you, as always.
Get back on the toilet!!
And … you’re welcome!
Damn, every shot in the black, cruel and very very honest…… I wonder if Costco or Home Depot is hiring in his area…?
Reality is never cruel, only random, which is what makes it so cruel.
Thanks for sticking a fork in it and turning it over, because he’s way over done.
Maybe he can get a franchise from Floyd, and open a Floyd’s of Leadville, where he ends up in the double wide.
But he is broadcasting from the roadside in a trailer in Israel, bringing his unique brand of banned arrogance and tainted meat to the Holy Land. So he’s got that going for him.
Once again, the leaky wanker cuts through the chaff and reality checks the doper propaganda.
Keep on keeping on!
Dopaganda. It’s not just for breakfast anymore!
He is lying about racing clean in his comeback(Statute of Limitations). Maybe he can write Schedule 13D letters for baldy.
McButtchaps don’t use no monosyllabic ghosties.
The Levi doper-guy has his highly successful annual gravel ride up in NorCal. Don’t know what kinda dinero he rakes in on that, but it seems being a doper doesn’t kill all respect from cyclists. This ride is even highly touted by some cycling bloggers.
If you want to do well, win bike races. If you want to really kill it, win them on dope!
The comment via email:
He said he lost $100 million in future endorsment deals that day. Not lost wealth.
Now, I’m not saying he came out of all of this sitting pretty. You’re right on with much of your analysis. Having a big nut (pun intended) is a large cash drain, and with his posse and lifestyle, shit gets expensive and cash runs scarce. Many lottery winners and entertainers and tech startup dudes and real estate investors think it’s never gonna end and they expand to live beyond their future incomes.
Ever heard of Allen Iverson? MC Hammer? Senior execs from AOL? Importantly, Lance’s future earnings are fucked. So he is going to be living off his current nest egg, in a world with increasing costs. You know how much gas is gonna cost in 20 years? Property taxes? Medical care? College?
Anyway, he didn’t lose his cash when his shit came out. He lost future earnings. That’s what he said when asked. The sound bite sounds better, though, I agree.
In that sense, hemorrhaging for the next 20 years is not gonna be fun for him, and will be a painful decline. Also not brilliant to have 47 kids and so many spouses and significant others.
“Wedu drugs!” Haha!
That Wedu stuff (U with the funny mark over it to appear intellectual or hip) is over the top nonsense.
Who really wants to buy a stem cap with Lance’s misguided arrow symbol? Or a bro hat for that matter? What does that symbol even stand for? His broken moral compass?
I think we’ve been misreading the logo. It’s actually pronounced “Weed U,” the new for-profit educational corporation that Lance is forming with The Donald in order to Make Cancer Charities Great Again through the targeted use of medicinal cannabis. He is hiring Floyd as his consultant.
Could be, he’s gotta cash in on the weed thing since he’s a wannabe Coloradoan after all.
When that fails, he can get into “blockchain.”
I’ve listened to a few of the Stages podcasts, not terrible but I do remember one howler re the Chris Froome salbutamol case where Lance said “Why do we need the another group like the MPCC?” I can’t think of any other podcasts I’ve cussed at.
I couldn’t get past the aire o’ gants.
Damn Wanker. I think that puts you up there with B. Andreu, the LeMonds, Tilford and Walsh in terms of calling Lance to the carpet. I will say that it was nice to see an obviously buzzed Armstrong acknowledging in surprisingly strong terms how big of an influence LeMond had on him as a high schooler watching the ’89 TDF. It will be interesting to see if those two ever sit down and make some sort of amends. As the great Ayrton Senna said when asked about his relationship with Alain Prost, “Life is too short to have enemies…”
Seth, speaking from the POV of a person who runs jury focus groups and research for a profession your analysis of why the case settled at the amount it did and when it did rings entirely true to me. Nobody had the stomach to continue and both sides needed to save face in some way.
Your math about Lance’s estimated net worth is way off, though. His “losses,” as noted above, are based on lost future earnings, assuming he’d never been busted as a doper. That, of course, is money that never existed anyway. I have zero inside knowledge but I’m going to guess that someone as cunning and strategic as Lance Armstrong probably invested in some income generating assets along the way and his many kids will be just fine.
I’ve been way off about money before!