Nike dumps the Livestrong wristband: Is the charity doomed?

Nike is phasing out the iconic yellow bands, once a source of revenue for the cancer foundation

The end of the yellow-band era.
(Image credit: CC BY: ianmalcm)

On Tuesday, Nike announced that it will stop producing Livestrong merchandise, including the yellow wristbands that have become an iconic symbol of cancer awareness, at the end of the 2013 holiday season.

The decision ends a nine-year partnership that saw the cancer charity emerge as a global brand, thanks in part to the sports apparel company's effective merchandising campaign. Since 2004, Nike has distributed 87 million Livestrong wristbands and raised more than $100 million for the charity.

It's the latest setback for Livestrong in the wake of founder Lance Armstrong's admission, after years of combative denials, that he used banned substances to help him win a record seven Tour de France titles. As Armstrong became an increasingly toxic public figure — a Forbes survey released earlier this year declared he was the most unpopular athlete in America — sponsors began dumping him and Livestrong, ultimately forcing Armstrong to leave the charity he started in 2007.

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With Livestrong's two most visible backers gone, the company may appear to be in dire straits. However, Livestrong said in a statement that its finances remain sound and that it would have no trouble continuing its work.

This news will prompt some to jump to negative conclusions about the Foundation's future. We see things quite differently. We expected and planned for changes like this and are therefore in a good position to adjust swiftly and move forward with our patient-focused work. Because of our sound fiscal health, the Foundation is well-positioned to continue to grow our free services for cancer patients and survivors that improve quality of life and access to care. [Livestrong]

Independent analyses bear this out. The nonprofit-ranking organization Charity Navigator gave Livestrong a four-star rating last month in part due to its strong financial health. CharityWatch, another charity-monitoring group, listed Livestrong among its top-rated charities last year as well. And while the foundation's operating budget is smaller than in previous years, revenue is already beating the its own projections for 2013.

That's because though Nike made the most visible financial contribution to Livestrong, bracelets and T-shirts only accounted for a fraction of the foundation's overall haul. The charity reported just over $51 million in revenue in 2011, the latest year for which it has made data publicly available. Merchandise sales accounted for just $3.2 million of that total; revenue from events, meanwhile, totaled nearly $17 million.

Furthermore, Livestrong has taken drastic steps to distance itself from its tainted founder. After Armstrong resigned as chairman last October, the charity saw an immediate uptick in donations. Livestrong then underwent an enormous rebranding effort — "crisis management on steroids" as NBC's Bill Briggs put it — in which it went so far as to move its "call-to-action" day from the anniversary of Armstrong's cancer diagnosis to the day it introduced the yellow wristbands.

For the record, Nike isn't entirely pulling out from Livestrong. In a statement, the company said that it will continue to support the foundation in other ways.

"We will continue to support the LIVESTRONG Foundation by funding them directly as they continue their work serving and improving outcomes for people facing cancer," the statement read.

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