Sponsor and Endorser Relationship

"USADA then did something that dismayed Mr. Armstrong's legal team: It released thousands of pages of documents from the investigation on its website, including affidavits from about a dozen former teammates, all of whom accused him of doping. Shortly after the documents were released, Nike NKE +0.94% dropped its sponsorship of Mr. Armstrong. Within a day, all of his other major sponsors had done the same. Mr. Armstrong's cancer charity, the Lance Armstrong Foundation, cut ties with Mr. Armstrong and later changed its name to The Livestrong Foundation." 

The first point of discussion here is the negative marketing associated to Armstrong's name. As soon as the USADA released documents accusing him of doping, Nike and all other major sponsors dropped their sponsorship and Mr. Armstrong’s cancer charity changed its name. It is correct to say that Mr. Armstrong’s endorsement and successful career were extremely important to the success of Lance Armstrong Foundation. His endorsement was very beneficial to sponsor's profitably during the time they were sponsoring Mr. Armstrong. The name Armstrong now represents deceit, corruption, and questionable morale. No company should want to be associated with that.

However, based on WSJ article "Former teammate Floyd Landis's allegations against Mr. Armstrong in 2010, first reported in The Wall Street Journal, kicked off the USADA investigation and a separate federal fraud probe into whether Mr. Armstrong's U.S. Postal cycling team had defrauded sponsors by using performance-enhancing drugs".The transaction between sponsor and the team was ethically legitimate. Sponsor seeks advertisement, sale and profit. The sponsored seeks money and income. The sponsors received what it was agreed: endorsement and brand recognition. Mr. Armstrong's team victories brought the name of the sponsors to the podium and to the press. I wonder if companies should be involved with USDA requirements or they should only worry about the image associate with their brand. In other words, as long as the beneficiary is wining and being "moral to the eyes of the public" the transaction is ethically legitimate and the sponsorship is fair and moral. Therefore, I believe that the transaction was fair even though the means to achieve success were deceitful.

Source:  http://online.wsj.com/article/SB10001424127887324734904578241801441261928.html?mod=WSJ_hpp_LEFTTopStories