Trek announces an end to deal with Greg LeMond
By Steve Frothingham
Trek Bicycle Corp. is dropping LeMond Bicycles from its line and going to court to sever a 13-year licensing agreement with three-time Tour de France champion Greg LeMond, Trek president John Burke told employees Tuesday morning.
Burke cited LeMond’s public comments regarding doping allegations against Lance Armstrong and others, LeMond’s decision to offer a mass merchant accessory product line in 2000, and his “inconsistent” commitment to the brand.
“Greg’s public comments hurt the LeMond brand and the Trek brand,” Burke said. “Despite our repeated efforts to persuade Greg to focus on selling his bikes, he continued his personal attacks,” he said.
LeMond attorney Denise Rahne said she was surprised at the company’s public response to what had been a private dispute.
“Trek’s spectacle today is a move to distract from the real allegations that are contained in Mr. LeMond’s lawsuit against Trek,” Rahne said. “Mr. LeMond served Trek with a lawsuit in March. Mr. LeMond stands by his complaint. The allegations, which Trek has elected to make public, speak for themselves.
“Mr. LeMond has been and continues to be an outspoken critic of doping in professional cycling, which should be consistent with what Trek touts as ‘family values.’ Mr. LeMond looks forward to proving his allegations in court, not in the media, despite the many inflammatory and inaccurate statements that Trek made today.”
Attorneys for LeMond had served Trek with a breach-of-contract claim in March, alleging that the company had failed to live up to its obligation to “exert best efforts regarding the LeMond brand.”
The complaint was delivered to Trek, but not filed with the court, an option provided by the Minnesota rules of civil procedure so as to keep potential litigation private. Such private service nonetheless signals the commencement of a suit in state court. Trek released the complaint Tuesday.
In his complaint, LeMond alleges that the company had allowed the brand to lapse in recent years, largely in retaliation for his public comments about doping in general and Armstrong in particular.
Armstrong rode Trek bicycles to seven Tour de France victories and remains a key Trek spokesman.
In his complaint, LeMond argues that he had consistently made public statements about his anti-doping stance, well before Trek extended his contract in 1999. The company, LeMond said, had no problem with that position until he began to speak out about allegations surrounding Armstrong’s relationship with the infamous Italian sports physician Michele Ferrari.
“Although Trek had never claimed that Mr. LeMond lied or defamed Mr. Armstrong in anyway, in 2004 Trek began making the claim that Mr. LeMond’s statements regarding Mr. Armstrong constituted a breach of the LeMond Cycling/Trek agreement,” the complaint noted.
LeMond further alleged that Trek had “purposefully and without discussion” begun to phase out the brand under pressure from Armstrong, citing several examples of dealers who had approached him regarding Trek’s plans to end distribution of the bikes.
LeMond began a similar legal action in 2004, but the two sides came to terms without going to court. LeMond’s most recent suit mirrors many of the claims made in 2004.
Burke said Trek rescued LeMond’s bicycle company from near bankruptcy when it licensed the LeMond Bicycles name in 1995. He said the brand has failed to grow substantially recently, despite an overall growth in the road bike market, in part spurred by Armstrong’s career.
Burke said the brand’s annual sales are about $15 million and that it sells about 12,000 bikes a year. Trek officials declined to say how much the company has paid LeMond during its relationship.
LeMond, in turn, alleges that sales could have been significantly higher, but Trek had failed to put forth its best efforts to promote the brand.
In response to the suit, Trek filed its own claim in federal district court alleging that LeMond had harmed “Trek by publicly disparaging an important Trek-endorsed athlete.” The company outlined a series of comments regarding Armstrong by LeMond and provided several emails from customers and distributors as evidence of the impact those statements had.
Trek further alleged that LeMond took inappropriate advantage of his right to purchase bikes for personal use, the former Tour winner had “since 1999 … made numerous purchases of LeMond bicycles at employee pricing from Trek with a suggested retail value of over $2,500,000. Upon information and belief, Greg LeMond has resold, bartered for value or otherwise distributed many or most of these bikes, harming Trek and its dealers.”
Burke said in recent years he had encouraged LeMond to find another partner but that LeMond had been unsuccessful. The LeMond-Trek licensing agreement was set to end in 2010, but in response to the service of LeMond’s complaint on March 20, the company asked for an immediate end to the contract, alleging that it was LeMond who had originally violated the agreement.
Burke said Trek had taken “extraordinary steps” to support the brand, an assertion LeMond disputes in his complaint.
“Greg was like a member of the family,” Burke said.
He said there are still some LeMond models in production and that they will be completed and the company would help dealers sell their remaining LeMond inventory.
“They are still great bikes,” he said.
He said LeMond Bicycles employees in the United States will be transferred to other divisions of the company and that no production jobs would be lost. Most LeMond bikes are made in Asia, he said.
VeloNews.com senior editor Charles Pelkey contributed to this report.