To Those Who Say the Postal Service Got What They Paid For

[pedaling squares]

I'd like to how much an increase in market share by their competitors and/or the rise of non-traditional means of communicating factored in to the decrease in USPS revenues.

 

[ansimi]

I wasn't following cycling back then but I do remember this as a case in business school. USPS was using the team to re-brand both to its labour pool and to the customer pool. I think they started in the whole dot com bubble time when companies wanted to be cool. There was also talk of a paperless world (haha, remember those rumours) and USPS was looking at all sorts of new business. It was probably also around the time that "going postal" became synonymous with murdering your co-workers.

In retrospect, it doesn't look like a very good business investment but lots of companies were investing hugely in far sillier things at the time.

 

[Cal_Joe]

In order for USPS to get what they paid for they would not have to show an actual return on investment.

When you buy an ad, you pay for the ad. If you get the ad, you got what you paid for, regardless of whether the ad brings in more business or not.

What USPS paid for was title sponsorship of a cycling team. They got that sponsorship. So, they got what they paid for. Whether that sponsorship translated into increased exposure and revenue is a separate matter.

Wow 95, a stand we can agree on. Amazing.

On the other hand, your attempt to inject facts and logic into a Clinic post will undoubtedly be ignored.

 

[Ninety5rpm]

Wow 95, a stand we can agree on. Amazing.

On the other hand, your attempt to inject facts and logic into a Clinic post will undoubtedly be ignored.

Just continue forming your opinions based only on facts, reason and logic, and we'll never disagree.

But if you start pulling shyt out of the nether regions all bets are off!

 

[Dr. Maserati]

Wow 95, a stand we can agree on. Amazing.

On the other hand, your attempt to inject facts and logic into a Clinic post will undoubtedly be ignored.

Not ignored -
but someone might post some actual 'facts' to counter '95s' opinion.



Mark Gorski of Tailwind said in 2002:

We have done things over the years that go far beyond a typical sponsorship to give [the postal Service] the justification to continue their sponsorship. They set a benchmark of four times the sponsorship fee that we had to hit every year to continue, in terms of new business and we hit it every year, even before Lance won the Tour in 1999.

Some other interesting points from Gorski:

So sponsorship really has to be very well justified with a very strong business case.

Because our first three years with the Postal Service were one year contracts that had to be renewed each year we were really forced to justify that a cycling team could make business sense for the Postal Service and how it could provide a return beyond the feel-good things that a lot of sponsorship has. It had to make business sense.

We began to work very closely with the sales division of the postal service, which Gail Sonnenberg has headed for the last several years, and almost became an extension of the sales team. I have spent a lot of time out on sales calls around the country with cycling companies, other team sponsors and other clients of Tailwind Sports, to facilitate new business relationships for the Postal Service, in terms of new accounts for their expedited mail services and the large package services for catalogue companies and mail order companies.

 

[MacRoadie]

The point of the thread, however poorly worded the title may be, was to address the large number of persons and posts suggesting that the Postal Service appreciated significant benefit from their sponsorship of the cycling team.

Yes, the Postal Service received that which was contractually agreed upon from Tailwind. To suggest, however, that there was additional, significant benefit (i.e. increased revenue, greater market share, or public awareness) is not borne out by the Inspector General's report and subsequent recommendation that the Postal Service discontinue sponsorship of professional sports.

If I retain the services of a commercial production company and pay them to produce a television commercial based on their representation that the commercial will increase my sales revenue (and I have chosen them over other competing firms for that reason), yet my sales actually decrease from those I appreciated utilizing my television ad, then I certainly received the ad I paid for, but didn't enjoy the added revenue.

Obviously, it's a crap shoot and there could never be any "guarantee" that I would increase sales, but the representations by some on this board is that the Postal Service did just that, and that just isn't the case.

Perhaps, I should have entitled the thread "Did the Postal Service Reap the Great Benefits Purported By Some On This Forum", but it probably wouldn't have fit.

 

[Ninety5rpm]

The point of the thread, however poorly worded the title may be, was to address the large number of persons and posts suggesting that the Postal Service appreciated significant benefit from their sponsorship of the cycling team.

Yes, the Postal Service received that which was contractually agreed upon from Tailwind. To suggest, however, that there was additional, significant benefit (i.e. increased revenue, greater market share, or public awareness) is not borne out by the Inspector General's report and subsequent recommendation that the Postal Service discontinue sponsorship of professional sports.

If I retain the services of a commercial production company and pay them to produce a television commercial based on their representation that the commercial will increase my sales revenue (and I have chosen them over other competing firms for that reason), yet my sales actually decrease from those I appreciated utilizing my television ad, then I certainly received the ad I paid for, but didn't enjoy the added revenue.

Obviously, it's a crap shoot and there could never be any "guarentee" that I would increase sales, but the representations by some on this board is that the Postal Service did just that, and that just isn't the case.

Perhaps, I should have entitled the thre"Did the Postal Service Reape the Great Benefits Purported By Some On This Forum", but it probably wouldn't have fit.

Thanks for the clarification. That makes much more sense.

 

[Ninety5rpm]

Not ignored -
but someone might post some actual 'facts' to counter '95s' opinion.



Mark Gorski of Tailwind said in 2002:


Some other interesting points from Gorski:

Interesting, but all that is prior to signing each one-year contract. It's a process of persuading them that, essentially, it's a good business bet (ultimately everything in business is a bet since nothing is for sure, though there are good bets and bad bets). But once USPS is persuaded, unless the information given to them was fraudulent and relevant to whether the bet turned out good or not, USPS takes the risk.

Now, consider what would have happened if Armstrong had been caught with his hand in the EPO/blood/etc. jar in '99, '01 or any of the USPS years. Clearly that would have been bad for the sponsorship, and would have been relevant to whether the bet was good or not. So if USPS agreed to sponsor based on the contractual understanding that the team in general and Armstrong in particular was clean, by racing dirty he was causing them to take a risk that they did not agree to assume. Had he been caught he would have been guilty of not only the doping, but also of whatever breach of contract crime is appropriate here. Not getting caught doesn't it make it any less of a breach of contract. The breach is the doping itself, not in the getting caught and hurting of the sponsorship.

 

[The Hitch]

Since this thread is largely about whether sponsors make money in cycling, I would like to ask how a company like liquigas and even more so, the companies behind astana make money.

With liquigas it is my understanding that they are a gas company. Now when specialised have a cycling team I can see where they would make money, because more fans will buy specialised bikes. But a gas company. Are people going to invest their shares in liquigas because of the cycling team??? How on earth is a bike team worth anything to them.

Even more so with astana because astana isn’t an actual company but a coalition of Kazakh companies united under the name of the Kazakh capital. What are they going to get out of this when their names aren’t even on the shirts?

Thanks

 

[Benotti69]

Since this thread is largely about whether sponsors make money in cycling, I would like to ask how a company like liquigas and even more so, the companies behind astana make money.

With liquigas it is my understanding that they are a gas company. Now when specialised have a cycling team I can see where they would make money, because more fans will buy specialised bikes. But a gas company. Are people going to invest their shares in liquigas because of the cycling team??? How on earth is a bike team worth anything to them.

Even more so with astana because astana isn’t an actual company but a coalition of Kazakh companies united under the name of the Kazakh capital. What are they going to get out of this when their names aren’t even on the shirts?

Thanks

i imagine most italian companies sponsor cycling because they have to sponsor something to keep the name out there and the owner's are fans of the sport. a case in point, the italian 'acqua sapone' company, basically a nationwide shop that specialises in toiletries and washing products, the owner is a huge fan of cycling and sponsors the team based in abruzzo, where he is from. simples. remember cycling gets a lot of exposure in italy. italians love there sport. what it is like in other countries i can't comment on.

 

[El Imbatido]

Since this thread is largely about whether sponsors make money in cycling, I would like to ask how a company like liquigas and even more so, the companies behind astana make money.

With liquigas it is my understanding that they are a gas company. Now when specialised have a cycling team I can see where they would make money, because more fans will buy specialised bikes. But a gas company. Are people going to invest their shares in liquigas because of the cycling team??? How on earth is a bike team worth anything to them.

Even more so with astana because astana isn’t an actual company but a coalition of Kazakh companies united under the name of the Kazakh capital. What are they going to get out of this when their names aren’t even on the shirts?

Thanks

I could have sworn i saw Liquigas plastered all over the barriers and signs at finishes of Giro stages this year, that might help with getting their name around

 

[Nick C.]

Here in the US Colavita Oil and Peatnut Butter & co. sponsor teams. As such, I gave their brands a try where I otherwise would not have. Name recognition in a crowded field or even throwing your money their way because you appreciate that they support a cycling team is a possible or even probable benefit.

 

[flicker]

All I can figure on the Radio Shack deal is that they wanted to cash in on some exposure from an out-of-retirement ex-tour winner. RS probably, like the rest of the brainwashed American arm chair cyclists/quarterbacks (please ignore if you don't fit into this category - you know if you do or not), actually thought or bought into the fact that he could win the TdF! Definitely gives them some exposure here in the US no matter what due to his overall ridiculous amount of not-even-news coverage.

ow! that really hurts. Your armchair cyberbullying on us armchair cyclists. Really you do know how to pull on the short and curlies. owie.

 

[flicker]

But LA is responsible for the Radon leaking into your basement thru the cracks in concrete which has been weakened by the USPS/LA shrine you've constructed. This has caused you to become delusional and hear voices. But due to the massive LA-shrine debt you've amassed you cannot afford to layer tin-foil around the inside of your basement. Instead, you block out the antiLance voices by placing little, tiny, picometer sized pieces of foil into each external auditory meatus.

Sorry dude I just had to. I've read your stuff before... you are tip-toeing on entry into the world of insanity.

NW

I did my best I was the guy wearing the yellow "ARMSTRONG 8" tights in LeTour.

No" armchair cyclist" me!

 

[Squares]

Based on the logic that was being used in the original post, ie. that sponsorship must increase the revenues of the sponsor or the sponsorship has been a waste of money, I respond as follows:

If I was Michael Ball, I would be suing the sh*t out of the Rock Racing Team. You see, he started putting money into the cycling sponsorship and the next thing you know his company was bankrupt.

Also, GM and Chrysler were advertising to the tune of hundreds of millions a year and they soponsored NASCAR races, yet they almost went bankrupt. Should they have sued their ad agencies that prepared their television and radio ads and NASCAR (where people get caught cheating all the time) for fraud? After all they failed to increase their sales through this sponsorship and advertising.

I know that it has been said, but perhaps operating losses of a company who pays for advertisements and sponsorships are due to things like bad management, comeptition in the marketplace, poor pricing policies and such rather than a failure of a single sponsorship. Perhaps they would have lost even more had they not sponsored the team.

 

[Race Radio]

One of the reasons Italian teams are so well funded are the Italian government gives companies huge tax breaks for sponsoring sports.

Liquigas is unique in their makeup as they are 100% owned by Liquigas the company with no management group in between to skim as much money as possible.

 

[flicker]

Based on the logic that was being used in the original post, ie. that sponsorship must increase the revenues of the sponsor or the sponsorship has been a waste of money, I respond as follows:

If I was Michael Ball, I would be suing the sh*t out of the Rock Racing Team. You see, he started putting money into the cycling sponsorship and the next thing you know his company was bankrupt.

Also, GM and Chrysler were advertising to the tune of hundreds of millions a year and they soponsored NASCAR races, yet they almost went bankrupt. Should they have sued their ad agencies that prepared their television and radio ads and NASCAR (where people get caught cheating all the time) for fraud? After all they failed to increase their sales through this sponsorship and advertising.

I know that it has been said, but perhaps operating losses of a company who pays for advertisements and sponsorships are due to things like bad management, comeptition in the marketplace, poor pricing policies and such rather than a failure of a single sponsorship. Perhaps they would have lost even more had they not sponsored the team.

I joke around here but I do not understand the advert business of cycling. I felt like TMobile USPS Liguigas CSC can benefit from cycling ads. Rock I don't know. Ball is a nutter, untraditional and brash, if he were Branson of Virgin Airlines I would say fine, but he and his team had no foundation to stand on. I feel bad for his ex-riders.

 

[Anonymous]

I know that it has been said, but perhaps operating losses of a company who pays for advertisements and sponsorships are due to things like bad management, comeptition in the marketplace, poor pricing policies and such rather than a failure of a single sponsorship. Perhaps they would have lost even more had they not sponsored the team.

USPS = Gov't Entity = Bad Management. 'Nuff said.

The team gave the USPS a lot of exposure. Heck, everyone here still remembers the name and not everyone here is from the US. It just didn't translate into the big dollars the USPS thought it would or might.

Then again, if you really need something shipped next day would you trust a company specializing in that service (UPS, FedEx) or a poorly run governmental entity? Just sayin'.

 

[Kennf1]

USPS = Gov't Entity = Bad Management. 'Nuff said.

The team gave the USPS a lot of exposure. Heck, everyone here still remembers the name and not everyone here is from the US. It just didn't translate into the big dollars the USPS thought it would or might.

Then again, if you really need something shipped next day would you trust a company specializing in that service (UPS, FedEx) or a poorly run governmental entity? Just sayin'.

I agree with this. If I have to ship a package, I use UPS. Overnight- Fed Ex. Mail? Well, I mail maybe four envelopes a year now.

The internet and on-line bill paying is what has killed USPS. The main thing keeping them in business right now is bulk (junk) mail.

As for RadioShack, they are circling the drain, and have been for a while. The most they can hope for is a slight increase in value to make the acquisition by Best Buy next year a little more rewarding.

 

[cathulu]

I have to say that if you buy something internationally and have it shipped to you, you want to use the countries national carrier to deliver the item to you. So as I am in Canada I get things shipped USPS which then gets delivered to my house with Canada Post. Or if I buy in Britain I use their national carrier also.

UPS and Fedex basically hold your item for ransom until you pay their extremely excessive and seemingly arbitrary brokerage charges. Never again!

Thank god for USPS!

Sorry for straying way off topic...

 

[MacRoadie]

Based on the logic that was being used in the original post, ie. that sponsorship must increase the revenues of the sponsor or the sponsorship has been a waste of money, I respond as follows:

If I was Michael Ball, I would be suing the sh*t out of the Rock Racing Team. You see, he started putting money into the cycling sponsorship and the next thing you know his company was bankrupt.

Also, GM and Chrysler were advertising to the tune of hundreds of millions a year and they soponsored NASCAR races, yet they almost went bankrupt. Should they have sued their ad agencies that prepared their television and radio ads and NASCAR (where people get caught cheating all the time) for fraud? After all they failed to increase their sales through this sponsorship and advertising.

I know that it has been said, but perhaps operating losses of a company who pays for advertisements and sponsorships are due to things like bad management, comeptition in the marketplace, poor pricing policies and such rather than a failure of a single sponsorship. Perhaps they would have lost even more had they not sponsored the team.

Aside from the fact that my original post contained nothing but several referenced internet articles, and that I never suggested "that sponsorship must increase the revenues of the sponsor or the sponsorship has been a waste of money", I do not disagree with your general statements. I do, however, disagree with the converse argument that the USPS in fact increased revenue as a result of the sponsorship of the cycling team (and other professional sports enterprises).

This thread was created in response to the people and posts on this forum who are/were adamant that the US Postal Service actually reaped significant benefit from the sponsorship. I believe I clarified the poorly-worded title in a previous post.

I don't know what the USPS was thinking. I don't know how they perceived their sponsorship of a cycling team would expand their market share, I don't know how much revenue appreciation they anticipated, or what representations were made by the team management.

What I do know is that their own Inspector General prepared a report saying the sponsorship was a bust and recommendting no further expenditures on professional sports.

Somehow, I don't think "Perhaps they would have lost even more had they not sponsored the team." equates to the representations on the forum that USPS's revenue increased as a result of the sponsorship.

 

[JayZee]

Perhaps it is addressed in one of the linked articles, but I recall that at the time of its sponsorship USPS was attempting to gain a bigger share of the international shipping market by competing with Fed-Ex, UPS, DHL, etc. No easy task. The goal was to gain international exposure for USPS international business. It more than likely succeeded in that, but failed in its overall goal to compete in the international shipping business. There were likely many reasons the USPS business plan failed but, I highly doubt that the relatively small amount of money spent on the USPS team was one of them. I would think it is more likely that the USPS team helped it to be a little less of a failure but, it failed nonetheless and USPS continued to lose money.

Competing as a global shipper is very difficult. Just look at DHL's failed effort to compete in the U.S. domestic shipping business.

 

[outrage9]

Imagine that, a government entity that can't make good financial decisions...

 

[Anonymous]

I work for USPS as a mail carrier...the original reason given by the company was to expand express delivery in europe, and european package delivery in general...they thought it would be a good promotional idea via that market...which, to me, was not a bad way to do it...no idea how it turned out costwise and effects...but I will say this...as a cyclist I was surely happy to see them putting some money into a cycling team...now they blow that money on a friggin nascar team...

 

[NashbarShorts]

I work for USPS as a mail carrier...the original reason given by the company was to expand express delivery in europe...

Thanks for clearing that up. I posted this point earlier, but it seems nobody caught it. To increase brand awareness in the European market, their sponsorship made total sense.