Lance Armstrong is a world-renowned professional cyclist whose reputation has come under siege due to accusations of using performance-enhancing drugs. On Aug. 23, 2012, Armstrong was cited for multiple anti-doping rule violations and received a lifetime ban from professional cycling.

Armstrong's penalties have wide-reaching repercussions on a professional and financial level. Here is a look at the effects of Armstrong's alleged illicit activities and how recent events have affected the cyclist financially.

Long-Term Financial Effects
From 1999 to recent tours, Lance Armstrong was a highly-respected member of the cycling community, having secured a record seven Tour de France titles. He also overcome cancer, and made significant strides in helping other cancer patients with his Livestrong foundation. Now, as the cyclist comes to terms with the end of his career, losing the awards, and bad press, he may also have to come to grips with a lower salary.

Armstrong's reported net worth is a hefty $125 million, with awards from competitive tours making up much of that total. In order for Armstrong's net worth to increase, he will need to focus hard on keeping his sponsors and focus on his work with Livestrong. Since the Tour de France grants winners roughly 450,000 euros per win, Armstrong could potentially have to pay back at least $4 million.

Loss of Sponsors?
A question that many are asking is whether or not Lance Armstrong will maintain the support of his sponsors. Thus far, Armstrong hasn't lost any endorsements, but it's hard to guage how many new sponsors he'll lose out on. Two of his major sponsors include Michelob Ultra and Nike. Anheuser-Busch and Nike have both released statements indicating that their faith has not wavered in the cyclist. This is excellent news for Armstrong, as the support of sponsors can mean all the difference in how the Livestrong foundation thrives in the future.

Livestrong Donations
On the day the news came out that Lance Armstrong was banned from pro-cycling and the severity of his penalties were revealed, something unexpected happened. Rather than see a drop in support for Armstrong's foundation that strives to support cancer patients, the organization actually saw an increase in donations. The day the news was first reported that Armstrong was banned from cycling, Livestrong donations increased a staggering 25%.

Maintaining a Positive Outlook
Despite the odds stacked against him, Armstrong remains positive. He has promised to "turn the page" and commit himself to his Livestrong foundation to help cancer patients. Additionally, Armstrong plans to focus on his family.

The Bottom Line
Armstrong may face some stiff penalties in the future should the USADA deem that the cyclist must pay back all of his winnings from his seven Tour de France wins. Armstrong is, however, off to a positive start in his post-cycling career by maintaining his corporate sponsors and continuing to uphold and enhance his charity. Without future income from competitive racing, Armstrong will need to find a way to supplement his cash flow.

A natural and easy way for Armstrong to maintain his current lifestyle and keep up his cash flow is to continue to grow and improve his Livestrong foundation, maintain positive relations with his sponsors, and be open to public speaking or possibly book deals explaining his side of the story. Armstrong could easily maintain his current lifestyle, if he plans ahead carefully. While only time will tell if he faces steep monetary fines or not, Armstrong will certainly have to come to grips with living life without the competitive winnings he has grown accustomed to achieving over the past 13 years.

Related Articles
  1. Retirement

    Why Some Celebs Say 'No Inheritance for My Kids'

    To some of the super rich, inherited wealth is not the ultimate gift, it's a burden. Here's how their children—as well as charities—stand to benefit.
  2. Investing

    Kevin O'Leary Biography

    Kevin O'Leary is a television personality, businessman and investor from Canada. A brash public personality with a net worth of roughly $300 million, he is considered to be the Canada’s answer ...
  3. Entrepreneurship

    7 Top-Earning Child Stars

    These seven top-earning child stars earned millions through different parts of the entertainment industry, including television, film and music.
  4. Entrepreneurship

    8 Top-Earning Country Singers

    These eight country singers have built careers singing about men and women who’ve done them wrong, and they’ve shared their heartache to the tune of millions of dollars.
  5. Personal Finance

    Who Is Next in the Athleisure Trend?

    Which companies are jumping on the growing athleisure wear trend and how can investors start getting in on this?
  6. Personal Finance

    Top 10 Most Valuable Sports Teams in 2015

    Cleats, pads and profits: we take a look at the top 10 most valuable sports teams in the world.
  7. Investing News

    How 'Honesty' Could Pay off for Jessica Alba

    Is it possible that Jessica Alba is one of the savviest businesswomen on the planet?
  8. Personal Finance

    The Future Outlook of the Golf Industry

    The popularity of golf peaked in 2003. To regain popularity and survive, the industry is adapting to appeal to a younger generation of players.
  9. Investing News

    Famous Celebrities Who Love Investing

    Celebrities have a bit of a bad reputation these days. These five celebrities, though, have used their fame and their money to invest successfully instead of spending it on looking good.
  10. Professionals

    The Top 5 Richest Restaurateurs

    The top five richest restaurateurs have proven that it is possible to not only turn a profit in the restaurant business but to become multi-millionaires!
  1. Why is Manchester United (MANU) carrying so much debt?

    The takeover of Manchester United by the Glazer family beginning in 2005 saddled the historic club with substantial amounts ... Read Full Answer >>
  2. What are Manchester United's (MANU) largest revenue sources?

    Manchester United is one of the most popular U.K. soccer teams. Its principal stadium is Old Trafford, located in the heart ... Read Full Answer >>
  3. Does Manchester United (MANU) own Old Trafford stadium?

    Old Trafford Stadium was built for and is currently still owned by Manchester United Football Club (Man Utd.). This means ... Read Full Answer >>
  4. What's the biggest sports endorsement deal ever signed?

    According to Forbes, basketball player Derrick Rose holds the largest endorsement deal as of 2014; the deal is for more than ... Read Full Answer >>
  5. What are the biggest stadium naming rights deals of all time?

    The top three stadium naming rights deals of all time were all for stadiums hosting New York City teams. The largest was ... Read Full Answer >>
  6. What is the difference between a mutual fund and money market fund?

    The Herfindahl-Hirschman index can be used to determine competitive balance in sports. Competitive balance is desired in ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  2. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  3. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  4. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  5. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  6. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!