Armstrong's Downfall May Cost Him $200M+
(Bloomberg News) Lance Armstrong may lose as much as $200 million in future earning potential, more than the wealth he accumulated in a championship-cycling career now gutted by revelations of doping.
After he was officially stripped of a record seven Tour de France titles in October, Armstrong faced demands that he repay up to $16 million in purses and bonuses from those victories.
Lost earnings potential far outpaces that, said sports marketing analysts. With a net worth estimated by Forbes at $125 million, the 41-year-old would have had a prosperous future as an endorser and motivational speaker had the evidence gathered by the U.S. Anti-Doping Agency not surfaced, according to Patrick Rishe, an economics professor at Webster University in St. Louis. Nike Inc. and his other sponsors deserted him after the USADA's report.
"To think that he would be able to make $15 million to $20 million annually over the next 10 years is not out of the question," Rishe said. "That puts his loss in potential future earnings at between $150 million to $200 million."
The French Cycling Federation, which distributes Tour de France prize money on behalf of the race organizer, the Amaury Sport Organization, said it plans to cooperate with the family-owned company to reclaim the $3.8 million it estimates Armstrong won during his career. SCA Promotions Inc., which insured bonuses Armstrong received for winning the race from 2002 through 2004, said it will seek almost $12 million.
Wealthy Pick Charity Over Luxuries, Study Says
Investors worth $25 million or more are more likely to donate $100,000 to charity than spend it on jewelry, collectibles, boats or other luxury items, according to a Spectrem Group study.
The survey, $25 Million Plus Investor 2012, showed that 20% of the ultra-high-net-worth individuals polled gave $100,000 or more to charity over the last 12 months, while 10% gave $50,000 to $100,000 and 16% gave $25,000 to $50,000.
Next to charity, they were most likely to spend large sums on travel, with 13% spending $100,000 or more in the last 12 months; 10% spent $50,000 to $100,000, and 22% spent $25,000 to $50,000, according to Spectrem, a research firm that specializes in the high-wealth sector.
About three-fourths spent their travel money visiting friends and family and 65% on educational travel. Exotic vacations were a priority for 59%, and 57% went on cruises.
The research shows that more than half of the respondents spent less than $10,000 a year on clothing, collectibles, club memberships and jewelry. They also spent relatively small amounts on political contributions and gambling and were least inclined to spend money on a yacht, according to the study.
-Karen DeMasters
Young Millionaires Go Online To Find Advisors
For millionaire investors, the most common way to find an advisor is still through family and friends. But those under age 44 are three times more likely to also use the Internet, according to Spectrem Group.
Young millionaires are four times more likely than their older counterparts to use Twitter or a blog in their hunt for an advisor and nearly six times more likely to be interested in using Facebook, according to a Spectrem survey.