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Why did the Postal Service sponsor Lance Armstrong's cycling team?

Cyclist Lance Armstrong admitted to doping in an interview with Oprah Winfrey that aired last week. Armstrong is in talks to return a portion of the multimillion-dollar sponsorship he received from the United States Postal Service, and former teammate Floyd Landis is suing Armstrong on behalf of the U.S. government. Why did the post office sponsor a cycling team in the first place?

Because sports, like mail delivery, involve speed, persistence, and global influence. There are few people at the Postal Service willing to talk about the logic behind the cycling sponsorship these days, but the deal was relatively uncontroversial in 1996. The original agreement was for just $1 million in the first year, $1.5 million in 1997, and $2 million in 1998. (The Postal Service spent more than $232 million on advertising in 1996.) The deal had nothing to do with Lance Armstrong, who was a minor competitor at the time and wasn't part of the team when the Postal Service signed on. The sponsorship was about sports in general. The Postal Service has a long history of sponsoring athletes, including a controversial decision to spend more than $100 million on the 1992 Olympics. The agency believes that athletes represent the characteristics business owners should associate with mail delivery in the era of rapid globalization: speed, reliability, consistency, and worldwide reach. Their commercials demonstrate this connection. In a 1992 advertisement, for example, figure skater Michael Weiss, depicted working long hours on his technique in Albertville, France, receives a videotape via overnight mail from his grandfather showing him how to perform a double axel. A 1996 commercial featured cyclist Rebecca Twigg speeding around a track, while a voice-over promoted the incomparable speed of Global Priority Mail.

The cycling sponsorship raised eyebrows only once Armstrong became a household name by winning multiple Tour de France titles, raising money for cancer research, and dating rock stars. The annual outlay was more than $3.3 million in 2000 and ballooned to $8 million by 2004. Between 2001 and 2004 alone, the Postal Service paid $31.9 million to Armstrong's cycling team, including bonuses. When the press questioned the sponsorship, an agency representative said, "Lance is about perseverance, and so is the Postal Service." She even mentioned the old saying, adapted from Herodotus, about mail carriers working through snow, rain, etc.

It's now fashionable to mock the Postal Service's cycling sponsorship as a nonsensical waste of quasi-governmental money on a sport that is contested overseas and watched by relatively few Americans. Business expert and talking head Seth Godin, for example, wrote in 2006 that the sponsorship was "almost without value" and asked, "Do you really think someone sees Lance Armstrong and says, 'Oh, yeah, I gotta go out and mail some stuff?' " But in the late 1990s, it seemed like a pretty good deal to many observers. Armstrong the cancer survivor seemed to embody the comeback spirit of the Postal Service, which went from a $536 million loss in 1992 to a $1.57 billion surplus in 1996.

The Postal Service commissioned a pair of studies, disclosed in 2011, that claimed the Armstrong sponsorship's publicity value paid back the agency's investment threefold, but those figures could be called into question. It's very difficult to tell how much a marketing deal is worth, and the Postal Service has faced this issue before. After a public outcry over the nine-figure Olympics sponsorship in 1992, the U.S. General Accountability Office admitted it couldn't determine whether the deal was profitable, as the Postal Service claimed.

Why did the Postal Service sponsor Lance Armstrong's cycling team? 01/21/13 [Last modified: Monday, January 21, 2013 2:24pm]
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