Road Bike Racing - USPS Sponsorship raises questions

From cyclingnews.com:

USPS Sponsorship raises questions
As the US Postal Service team assumes control once more at the Tour de France, winning the stage 4 team time trial and putting Victor Hugo Peña in the yellow jersey, the sponsorship program has come under fire in the United States. Citizens Against Government Waste (CAGW), and non-partisan watchdog group, has openly criticized the Postal Service for wasteful spending and a poor management of its various sponsorship initiatives, of which the cycling team is the largest and most expensive.

The CAGW group cites a draft report from the United States Postal Service Inspector General (February 25, 2003), which reportedly indicates flaws in the sponsorship programs and unverified revenues from the cycling team, as well as with the New York Yankees, New York Giants, Chicago Bears, and Tampa Bay Devil Rays.

"Postal officials routinely pedal the line that sponsorship of the cycling team raises 'brand awareness' in Europe and results in $19 million in revenue annually," explained CAGW Director of Special Projects Leslie Paige to PR Newswire. "Yet, they present no verifiable evidence of this and, according to the IG report, fail to quantify any impact to the bottom line with any of its sports sponsorships. International sales account for only 2.6% of the Postal Service's total revenue and anecdotal evidence suggests that its performance in the international arena is substandard."

The US Postal service reported a corporate loss of $676 million in 2002, and the reported cost of at least $40 million per year for the cycling team has raised the ire of the watchdog groups.

"Lance Armstrong is a champion and hero to millions of Americans," Paige acknowledged, but added that Armstrong's popularity and sporting achievements would endure without the Postal Service's support.

"The Postal Service is a government-owned monopoly and does not need to spend money on 'brand' advertising," he insisted. "In its current fiscal crisis, it cannot rationalize sponsorships of any kind. Postal officials simply recycle the feel-good mantra that these sponsorships boost the agency's image and make postal employees feel good. If postal officials want to retread their image, they should bow out of the sports sponsorships, redirect those revenues to improving mail delivery, reduce costly overhead, and furnish better customer service."

Dont they have a tree to save somewhere?

The postal service is no longer a monopoly they have a ton of competition out there and the internet is cutting into a huge portion of their revenue.here we mail/ship a majority of our stuff other ways than postal, they are also not really a government agency (like the IRS) they are a private corporation supported by the government.

Originally posted by ngateguy
they are a private corporation supported by the government.

Well, as big a fan as I am of cyling and the postal team, don't any of you think its a waste of tax money? I mean, its well and good to say its private, but if we bail it out every year that is our money.

sorry, but i'm going to have to side with the critics here, even watching the TDF I wonder why we have a government sponsored team. Even if it just looks that way, I think that is reason enough to drop it. Now, if the USPS stops taking government money and is no longer allowed to do discriminatory hiring (e.g. veterans get preference over regular citizens) then i'm all for them sponsoring whomever they want.

take care,

Steve

<in the most sarcastic tone you can imagine>

Ah yeah, that's where the waste in the postal system is - it's the bike sponsorship!

Cut me a break!! :rolleyes:

The USPS is a private entity.

What the critics fail to address is: What would the USPS deficit be without the sponsorships and advertising? Critics don't consider the economic benefits of advertising. They are there, otherwise companies would not advertise.

The postal service has much competition; UPS, FedEx, e-mail and hosts of local couriers. First class letter volume is down, and spam has replaced a lot of "junk mail."

Keeping the brand in front of the buying public is necessary, frequently, just to maintain business, and mandatory to grow it.

I have a friend that worked for the USPS for a while....I swear she got paid like a government employee with lots of the same benefits....I'll have to check that out.

Postal service is not funded by tax dollars. The sale of services and stamps funds postal costs just like a business.

These people are morons who need something to cry and whine about. They should all find some useful thing to do with their lives or shut the he** up.

Besides, the team brings a lot of attention to the USPS like stated above in advertisements.

Just ignore these idiots. Bunch of bed wetting crybabies.

sam's right on this one. your tax dollars don't support the postal service. it's technically still a government entity, but it's theoretically self-sustaining. i've got no problem with them sponsoring the team--in fact, i think it's quite cool and support the USPS whenever i can (ship all my stuff through them, even if it costs a bit more). fact is, they have a mandate from the government (provide universal service--you folks in the sticks ask ups or fedex how much they charge to deliver a letter to you. if it's under $.37 i'll eat my bike) and are, accordingly, hamstrung financially. if they so much as break even on this team, i'm all for it. even if they don't, it's their business. but for me, rooting for the USPS means a hell of a lot more than rooting for "berry floor."

it's technically still a government entity, but it's theoretically self-sustaining

So, Theoretically self sustaining, that means it needs help or you would have said actually self supporting.


What would the USPS deficit be...

there is a Deficit on this self supporting company, who picks it up, taxpayers?


they are a private corporation supported by the government.

Sorry folks but a $676 million government financed deficit does not an independent company make.

I have no problem with the USPS team itself, I just am not sure that is where tax $ should go. Would you all support a USPS Nascar team? Bass fishing team? Pro Wrestling team? These would all raise brand awareness.

I think many of us are being a bit blind on this because of our love of Lance and cycling, but anyhow, good show on the team TT.

take care,

Jester

Originally posted by SamDaBikinMan
Postal service is not funded by tax dollars. The sale of services and stamps funds postal costs just like a business.

Just ignore these idiots. Bunch of bed wetting crybabies.

Where do you guys come up with this stuff?? Remember the Post Office???? What the heck is that if not a government-run office. The USPS is an agency which the government has been trying to privatize for a long time, but has not been successful. Yes they compete for business, but they are fully subsidized by you and me........

And i think the critics have valid arguments.

Originally posted by Bikesick
Where do you guys come up with this stuff?? Remember the Post Office???? What the heck is that if not a government-run office. The USPS is an agency which the government has been trying to privatize for a long time, but has not been successful. Yes they compete for business, but they are fully subsidized by you and me........

And i think the critics have valid arguments.

I did some research into the taxpayer support issue and came up with the following information from the USPS (http://www.usps.com/communications/news/press/2003/pr03_033.pdf) (it's a pdf file):

"The Postal Reorganization Act of 1970 created the Postal Service to operate as a public service in a businesslike manner without taxpayer support. It has generated its own revenues from the sales of stamps and related services without taxpayer subsidy for postal operations since 1982. Funding for some mail, such as free mail for the blind, overseas ballots, and the Free Mail privilege extended to military servicemembers overseas is reimbursed by Congress. Under the Homeland Security Act, the Postal Service received funding to support biohazard related detection and prevention activities. None of the security funding is used to support postal operations."

What a load of rubbish. Some people have nothing better to do.

Funny thing is, as I understand it, TdF and cycling as a whole does not get a huge amount of coverage outwith Europe (when copared to it's exposure in Europe) and seeing a USPS sponsor doesn't make me post anything with them as I can't (Not available here).

Originally posted by jester69
I have no problem with the USPS team itself, I just am not sure that is where tax $ should go.

I think that most of us are missing the obvious point. The point is that the post office is one GIANT, wastefull organization. It always has been, and it always will be - that's the way it is. Attacking them for spending a few dollars in order to sponsor a cycling team is more than just silly ... it doesn't make any fiscal sense!

If we are serious about government waste, we should shoot for the low hanging fruit. The Postal sponsor ship is a cherry @ the tip-top of the highest tree in America. :D

U.S.P.S is a quasi-government agency that is mandated (as pgreene stated above), in its agreement with the gov't, to provide universal service. Consequently, it is not (and shouldn't be) expected to make a profit. No matter where you are (in the U.S.) U.S.P.S. is mandated to provide you with the same service that I enjoy in midtown NYC. That exacts a cost in overall efficiency; so, as pgreene adeptly points out, it (U.S.P.S.) cannot compete with the private services which are under no such partnership mandates from the U.S. government.

Originally posted by bac
If we are serious about government waste, we should shoot for the low hanging fruit. The Postal sponsor ship is a cherry @ the tip-top of the highest tree in America. :D

I would agree with that, on the scale of government waste the ammount of $$ spent on the postal team really isn't much, and it could even make them money (not sure on that one, if it could make money in a way that could be proven, i'd support that.)

Using your metaphor my point would be that yes, its not low hanging fruit, but its a very obvious, shiny and prominent cherry. It screams at the world "look at me" ;)

take care,

Jester

Originally posted by bac
I think that most of us are missing the obvious point. The point is that the post office is one GIANT, wastefull organization. It always has been, and it always will be - that's the way it is. I agree the USPS is a giant organization, performing a giant task. I don't think your statement about being wasteful is supported by ANY facts. The USPS is overseen by a vast, and most likely inefficient armada of overseers, including OMB and GAO. (GAO might be some low hanging fruit) Every anomaly is explored in excruiating depth. The bottom line is the USPS can deliver a letter from Miami to Nome, charging only 37 cents, and still break even.

Maybe if the USPS charged differing rates for differing hauls it could make more money, but we would find many anomalies, such as the cost of moving a letter from NYC to LA being much less than moving a letter from North Platte, Nebraska, to Mexico, Missouri, a condition we find in deregulated airfares at present. Then there would be a massive outcry about "unfairness."

To the extent there is waste in the USPS, the waste comes from the mission as defined. It also comes from charging a much lower margin over marginal cost for bulk mail, because of political influence of mass mailers.

The world grows smaller each day and successful business' must compete worldwide. The Postal service is a poorly run business that is alledged to be attempting to be competitive. Is the sponsorship of the cycling team appropriate and is it the highest and best use of $ to achieve it's goal of increasing business and gaining recognition???? I suspect that a realistic bottom line evaluation would show the following.

1) Initial brand awareness brand awareness increased dramatically!

2) That time has probably passed and their are other more cost effective ways to enhance profitability!

Please note that this approach is chosen by many team sponsors that are run by savvy profitable companies...sponsor a team for a few years and then get out. As much as I hate how this effects the sport and deprives us of long term team recognition it seems to be reality...also sells a lot of jerseys...hehe

Tyler Hamilton is a stud!!!!

<donning nomex suit> I think UPS oughta put out a cycling team. I wanna see 'em race big Brown bikes. :D

Originally posted by Raiyn
<donning nomex suit> I think UPS oughta put out a cycling team. I wanna see 'em race big Brown bikes. :D

And stylish brown lycra clothing!! Or would they wear the courier shorts? :D

I have often wondered why UPS and, particularly, FedEx, have not gotten in on the action. Especially considering the success of thier competitor, USPS. I think these guys would have even more to gain by getting more global exposure.

Back on topic, I don't know about waste in the USPS, but from what I see, they provide an AWESOME service. I really can't understand how they can do it. I have recently received a letter from several states away, that I got next day, when it was sent regular mail. For 37 cents. And I ALWAYS get great service whenever I go to the PO. Always.

Originally posted by FOG
I agree the USPS is a giant organization, performing a giant task. I don't think your statement about being wasteful is supported by ANY facts.

Ah, have you ever been to the post office?

Nah, you're right, the post office is the picture of efficiency and productivity as are most government "organizations". :rolleyes:

Originally posted by OtheloTheMoor
U.S.P.S is a quasi-government agency that is mandated (as pgreene stated above), in its agreement with the gov't, to provide universal service. Consequently, it is not (and shouldn't be) expected to make a profit. No matter where you are (in the U.S.) U.S.P.S. is mandated to provide you with the same service that I enjoy in midtown NYC. That exacts a cost in overall efficiency; so, as pgreene adeptly points out, it (U.S.P.S.) cannot compete with the private services which are under no such partnership mandates from the U.S. government.

The above is as close to the truth as it gets. USPS is striving for brand recognition and association with the characteristics of bicycle racing-speed, endurance, etc.... They have competition now like they have never had before.

Originally posted by bac
Ah, have you ever been to the post office?

Nah, you're right, the post office is the picture of efficiency and productivity as are most government "organizations". :rolleyes: Most lost effiiency in government is responding to those who think they have magical elixirs to improve efficiency. In general, government offices, especially at the Federal level are extraordinarily effecient.

Originally posted by FOG
Most lost effiiency in government is responding to those who think they have magical elixirs to improve efficiency. In general, government offices, especially at the Federal level are extraordinarily effecient.

:roflmao:

Originally posted by FOG
Most lost effiiency in government is responding to those who think they have magical elixirs to improve efficiency. In general, government offices, especially at the Federal level are extraordinarily effecient.

Let me guess, living in Annapolis, MD, you wouldnt happen to work for a government agency would you, :D That would explain your, ah, rosy outlook on Govt. waste.

Do some reasearch on the Bureau of Indian Affairs trust fund debacle if you want to see a well run agency. They are very efficient at screwing up, hehe.

take care,

Jester

Originally posted by jester69
Let me guess, living in Annapolis, MD, you wouldnt happen to work for a government agency would you, :D That would explain your, ah, rosy outlook on Govt. waste.

Do some reasearch on the Bureau of Indian Affairs trust fund debacle if you want to see a well run agency. They are very efficient at screwing up, hehe.

take care,

Jester I do work for the gov't, and I agree that BIA has problems, but I also know that the everyday workers at the overwhelming majority of agencies do a great job of executing the orders passed on to them. When the orders are conflicting or incompetent, which can occur because the public knows to be true facts which later prove to be false, then the orders lead to inefficiency. In the case of the USPS, their orders are unambiguous- they must move the mail rapidly and efficiently, and they do, despite a raft of requirements which do not hobble private enterprises. I do not know how the BIA debacle got started, but I am willing to bet good money that if the truth ever gets out that a political appointee will turn out to have been the culprit, and that ambiguous or conflicting requirements will also be part of the mix.

I work with an advisory committee, which has many individuals from the affacted industry, and they are considerably more impressed with our skill and diligence now that they have attempted to assist us in finding good and appropriate policies.

Some government agencies get into trouble with the public when they are too efficient, such as the IRS, or when they move in one direction or another to fit policy. The DOL has a rulemaking going on redfining who will be subject to overtime pay. As a result of their effective work, they will probably have made enemies of the labor unions. The real issue is not whether the DOL employees did a good job but whether the affected people are happy with the outcome of a politicial decision, which was not made, but which was implemented by skilled and efficient government workers.

Someone may say that "we were just following orders" is not a good excuse. I, and most of my coworkers that I have discussed the matter with, belive that it is not up to government workers to second-guess the electorate, their elected leaders or thepolitical appointees of the elected leaders, as long as the orders are not immoral, ilegal or unconstitutional. If an elected or appointed official says the world is flat and we are going to make policy accordingly, the remedy lies only with the voters. We will do our absolute best to implement a flat earth policy, even if we hold personal beliefs, or even knowledge, which conflict with that. We work work diligently, and as efficiently as we can given that a policy is based on false assumptions. We will, of course, do our best to give accurate information to the elected and appointed officials, but relatively few of them go to the trouble of getting elected or appointed so that they can seek our advice.

Since you are a voter, and therefore in many ways the ultimate decisionmaker, you can do a few things to make government more efficient. You can recognize that there are tradeoffs, and accept that if you want better transportation you may have to put up with more construction, more jobs, then you may have to accept more pollution or drilling in the ANWR, less crime you may have to pay more for prisons and staffs, better education higher taxes and so on. Public employees are great at using the resources allocated within the framework prescribed. Help us make a better framework by acknowledging tradeoffs and we can do an even better job.

If you pretend that we are all living a life of ease and adding no value, then you are likely to provide insufficent resources to attract good enough workers. A good enough worker would have to be very good where a large program is involved, yet often the wages are not enough to draw appropriate talent. If the quality of a worker's efforts can affect outcomes of a program by 1/2% (a very modest percentage), and the program is a one billion dollar program, then the difference affected by that worker's quality is $5 million. Nickle and diming that employee by a few thousand is not wise.

At the moment it is politically expedient for both major parties to blame government shortcomings on the employees, which is almost as stupid as blaming fires on firefighters. Look beyond the headline-grabbing stories and analyze the more common cases of emplyeees doing their jobs well and drawing no attention.

Originally posted by FOG
At the moment it is politically expedient for both major parties to blame government shortcomings on the employees, which is almost as stupid as blaming fires on firefighters. Look beyond the headline-grabbing stories and analyze the more common cases of emplyeees doing their jobs well and drawing no attention.

Perhaps I was misunderstood here, perhaps not.

I have friends and relatives that do great jobs for the government, The employees aren't the problem, its often the system and, like you say politics or appointees. Politics ruin more things in this country than I could ever possibly list :eek:

Some things you said in there I might take issue with specifically, but in general I think we are on similar wavelengths. However, as a taxpayer it is hard to see waste and not blame "the government" or an agency as a whole, even though ill concieved policies concieved by others may have put those in charge of that agency in a bind rather than any fault or inaction of their own. All I would ask of someone in that situation is, if asked, to be honest about what caused the problem.

take care,

Jester

French lender Cofidis dropped Lance Armstrong's contract after his treatment for cancer. Then in 1998, the USPS took a chance on Lance and as we all know the rest is history. Can you imagine Lance riding for a foreign team like Cofidis? Thank goodness for the USPS!

Originally posted by FOG
Look beyond the headline-grabbing stories

Like this one from today?

More government "efficiency" (http://www.cnn.com/2003/ALLPOLITICS/07/11/credit.card.agriculture.ap/index.html)

Originally posted by Revenig
Can you imagine Lance riding for a foreign team like Cofidis?

Sure I can, why not? Lemond rode on a foreign team and he was no less of Hero and Champion. Hamilton rides for a foreign team and he is one of my favorites. As well as Fred Rodriguez and Leipheimer. Hell my Favorite rider isnt even a American.

Originally posted by bac
Like this one from today?

More government "efficiency" (http://www.cnn.com/2003/ALLPOLITICS/07/11/credit.card.agriculture.ap/index.html) What they don't tell you is that employees were told to put all their travel expenses on cards, and given little clarification. I managed to run slightly afoul of the regulation by buying toothpaste at a Walmart when I was on travel. I thought it was mandatory to use the cards for such expenses, and that I would have been subject to discipline had I not used the card. As far as some of the other stuff- slow payment of the credit card is part of the huge number of alleged abusers. The cards are issued by major banks, like citibank, and are mastercards with high limits. We are PROHIBITED from using any other card to charge airfares and lodging, and are told we must use the card to pay for meals any time we are on travel, unless the restaurant does not accept the card.

When we get back from travel we often find the travel vouchers are not processed promptly, making us unwilling creditors of the government. Many of us then pay the credit cards slowly, because we have not yet been reimbursed. The big dollar figures include slow payments, as well as misuse. The actual cost of a sixty-day late payment is in the neighborhood of 0.8%, given a 4.5% APR. So, if there are $10 million in late payments, the actual cost is somewhere around $80,000- not worth the salary of a single investigator for a year.

All of this is to ensure we do not get any rebates like you might get from a discover card, or airline points for using an airline credit card. I would be just as happy to pay all my travel expenses off one of my other mastercards, but that wouldn't meet the minimum requirements. In the meantime, the government and the credit card companies have tightened up the acceptance rules, so our cards will not be accepted at most retailers.

There were real cases of abuse, and in my agency we fired some employees who misused their cards. These were individuals who had little or no experience with credit cards on their own, and IMO were punished beyond the magnitude of the offense.

In the meantime, no one has measured the cost of the investigations into the abuse and alleged abuse. I would bet that the abuse cost less then 10% of what the total cost of the investigations was. This is a typical example of running in circles making a big stink over fraud, when the actual cost of finding the frwud far exceeded any alleged fraud. The public will never hear the real story though, because it is a lot sexier story to tell the public that its employeees are robbing them blind, even if it is a wild exageration.

Originally posted by KevinG
Sure I can, why not? Lemond rode on a foreign team and he was no less of Hero and Champion. Hamilton rides for a foreign team and he is one of my favorites. As well as Fred Rodriguez and Leipheimer. Hell my Favorite rider isnt even a American.

The question was in reference to the whole USPS sponsorship issue. The point is that the USPS took a chance on Lance and he has delivered ten-fold. He has done much to improve on the negative image of the USPS. I believe this point was best expressed in an article titled "Is Lance Just Too Good?" on the dailypeloton.com (http://www.dailypeloton.com/displayarticle.asp?pk=4107) website:
The USPS started sponsoring cycling in 1996, figuring it was an easy, uncrowded sport to break into. Cycling stands for teamwork and endurance, its marketing people reasoned, and they say those qualities have indeed rubbed off on the much-maligned Postal Service. "Lance has completely changed the meaning of 'going postal," says spokeswoman Joyce Carrier.

Yes, Lance would have been a star on any team (American or foreign), but I'm glad that Cofidis passed on him and that he gave the USPS something to be proud of. An American helping an American based business. The so-called marriage between Lance and the USPS is a perfect match and I would like to see it continue despite of what these watch-dog groups think. So, I apologize for not expressing my point more clearly.

The U.S.P.S is a independent, government bound company, trying to be competitive in the market, and people bash them for it. There is an old saying "you have to spend money to make money", very true in the U.S.P.S' case.