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Nike will be just fine without Lance

October 17, 2012: 1:21 PM ET

The news that Nike dropped disgraced cyclist Lance Armstrong signals it can move beyond superstars.


Lance Armstrong wearing the Swoosh.

FORTUNE -- Just like Joe Paterno, Lance Armstrong was revered on Nike's sprawling 192-acre Oregon campus. Paterno's name adorned a child care center, while Armstrong's ran in big metal block letters across a fitness center.

On Wednesday, Armstrong followed Paterno into the rare class of Nike (NKE) endorsers to be unceremoniously expelled by the sports giant.

It's hard to grasp how permanent Lance Armstrong's place seemed in the pantheon of Nike greats. His Livestrong cancer charity's yellow bracelet, which hit peak popularity mid-decade, is still ubiquitous on campus. Armstrong's picture is peppered across dozens of athlete collages in Nike offices. And all of Nike's executives have at least one story about Armstrong hanging around the place and being an inspirational influence through his cancer battle.

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Which is why it's striking to see Nike, which most recently stood by Tiger Woods amid his cheating escapades, Kobe Bryant and Ben Roethlisberger in sexual assault cases, and Penn State with a host of indiscretions, draw the line with Armstrong. Nike's move is the clearest indication yet that Armstrong's doping denials are as fictitious as they are depressing. If you didn't believe sworn testimony from ex-teammates and numerous journalists' accounts of his guilt, Nike is telling you all you need to hear.

"Due to the seemingly insurmountable evidence that Lance Armstrong participated in doping and misled Nike for more than a decade," Nike said today in a statement, "it is with great sadness that we have terminated our contract with him. Nike does not condone the use of illegal performance enhancing drugs in any manner."

Nike will stand beside almost any star athlete at their worst. Sexual scandals and violence haven't scared it in the past. By drawing the line at cheating, Nike is saying: your personal life is your business, but play by the rules when wearing the Swoosh.

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It has staked out its position before. Earlier this decade Nike dropped track star Marion Jones who tested positive for drugs, as well as a notable track coach and other athletes linked to doping.

Nike was burned by Armstrong, there is no doubt. It likely invested tens of millions over the past decade in Armstrong and his Livestrong charity, which he announced today he is stepping down from as chairman. But for the sports giant, the days of fretting over bad PR from one big endorsement like Armstrong's are long gone. Nike's marketing has become an evermore sophisticated machine, and its reliance on superstars is greatly diminished from the days of Bo Jackson and Michael Jordan.

Today it reaches millions of consumers directly through new innovations like the Nike+ running app, FuelBand bracelet, and social networks. Armstrong and other endorsers are just a piece of Nike's complex $2.5 billion marketing budget. Unlike Bo Jackson or Michael Jordan in their prime, they don't dominate marketing.

In that way, expect Nike to feel the sting of Armstrong for a while. The company was burned, and it's not hiding it. But don't expect Beaverton to spend much time worrying how they'll replace Armstrong. They don't need to.

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About This Author
Scott Cendrowski
Scott Cendrowski
Writer, Fortune

Scott Cendrowski is a writer at Fortune based in Beijing, where he covers business in China. He moved there in late 2013 from New York, where he wrote about Wall Street and investing. Before joining the magazine in 2008, he was a Pulliam Fellow at The Arizona Republic and an intern for Bloomberg News. A Detroit native, he has a B.A. in public policy from Michigan State University.

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