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USPS Sponsorship raises questions

Old 07-10-03, 10:12 AM
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KevinG
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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."
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Old 07-10-03, 10:30 AM
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Dont they have a tree to save somewhere?
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Old 07-10-03, 11:08 AM
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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.
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Old 07-10-03, 12:21 PM
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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
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Old 07-10-03, 12:23 PM
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<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!!
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Old 07-10-03, 12:37 PM
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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.
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Old 07-10-03, 01:19 PM
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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.
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Old 07-10-03, 01:24 PM
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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.
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Old 07-10-03, 02:17 PM
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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."
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Old 07-10-03, 08:33 PM
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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
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Old 07-10-03, 10:41 PM
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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.
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Old 07-11-03, 12:16 AM
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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 (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."

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Old 07-11-03, 01:10 AM
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What a load of rubbish. Some people have nothing better to do.
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Old 07-11-03, 02:01 AM
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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).
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Old 07-11-03, 07:57 AM
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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.
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Old 07-11-03, 08:19 AM
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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.
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Old 07-11-03, 08:32 AM
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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.
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
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Old 07-11-03, 09:18 AM
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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.
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Old 07-11-03, 09:32 AM
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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!!!!
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Old 07-11-03, 09:45 AM
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<donning nomex suit> I think UPS oughta put out a cycling team. I wanna see 'em race big Brown bikes.
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Old 07-11-03, 09:59 AM
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Originally posted by Raiyn
<donning nomex suit> I think UPS oughta put out a cycling team. I wanna see 'em race big Brown bikes.
And stylish brown lycra clothing!! Or would they wear the courier shorts?
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Old 07-11-03, 10:38 AM
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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.
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Old 07-11-03, 10:54 AM
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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".
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Old 07-11-03, 11:02 AM
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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.
 
Old 07-11-03, 01:08 PM
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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".
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.
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