Postal Service Drops Sponsorship of U.S. Cycling Team 

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today urged the United States Postal Service (USPS) to abstain from future sports sponsorships following the agency’s announcement that it will end its relationship with the U.S. Pro Cycling Team.  The USPS has sponsored the team for eight years.  When asked about the possibility of future sports sponsorships, spokesman Gerry McKiernan said “it's possible.”

“The decision to disengage from the U.S. Pro Cycling Team is a sensible one, though largely symbolic,” CAGW Director of Special Projects Leslie Paige said.  “Dropping the cycling team may only shift resources to more wasteful spending.”

Mr. Armstrong, the five-time Tour de France winner, has begun trolling for a replacement sponsor before the current contract with USPS expires at the end of 2004.  USPS has been the team’s lead sponsor since 1996, renewing the current contract in 2000 for $25 million.  With another $12 million in advertising expenses and the expense of sending postal employees on junkets to France for the annual event, the true cost is closer to $40 million.

The USPS renewed the cycling team’s contract at a time when the postal service was showing signs of financial strain.  During 2000 and 2001, the USPS hiked rates three times.  The rationale for sponsoring the Pro Cycling Team was that having the postal service logo on the team’s jerseys would boost postal employee morale and generate “brand awareness.” 

“Any sensible private sector company would have yanked the sponsorship and refocused its resources on its core mission,” Paige continued.  “During a dramatic downturn in business, the top priority should be customer satisfaction.  However, a government bureaucracy with a built-in customer base can afford to ignore their clients’ pleas.” 

Postal officials had hoped to capitalize on cycling’s popularity in Europe to increase international business.  Although the Postal Service does not customarily make cost and revenue statistics available to the public, a 1998 report showed that postal products and services were losing money in Europe.  The USPS claimed that the sponsorship generated $18 million over four years.  The USPS Office of the Inspector General was able to account for only $684,000 in revenue and documented widespread weaknesses and accounting lapses in all of the USPS’s sports sponsorship programs.   

“Europeans may love Lance Armstrong, but that admiration did not translate into more revenue for the USPS,” Paige continued.  “Because the USPS has complete control over the pricing of its products and services, they are using captive ratepayers’ money to cross-subsidize these boondoggles.”     

“The minute savings obtained from canceling the contract for a $68 billion entity, such as USPS, won’t save it from the financial abyss,” Paige concluded.  “But postal management’s decision to squander $40 million on the cycling team demonstrates that many of the USPS’s financial misfortunes are self-inflicted.  The agency’s financial problems are correctible only with deep and dramatic reform, and ultimately privatization.” 

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.