| For Immediate Release | Contact: Mark Carpenter |
| July 8, 2003 | (202) 467-5300 |
Postal Officials Continue To Waste Millions on Sports Sponsorships
(Washington, D.C.) — Citizens Against Government Waste (CAGW) today criticized the United States Postal Service (USPS) for its abysmal track record of botched marketing initiatives and mismanaged sports sponsorship expenditures. The USPS has sponsored the U.S. Cycling team since 1996, and Lance Armstrong, who came on board in 1998, is the odds-on favorite to win his fifth consecutive Tour De France. While Armstrong has a well-earned reputation for athletic excellence, a February 25, 2003 uncensored, draft report by the USPS Office of Inspector General (IG) and obtained by CAGW, shows that USPS has bungled its sports sponsorship programs.
“Lance Armstrong is a champion and hero to millions of Americans. Each year, he delivers a stirring performance at the Tour De France,” said CAGW Director of Special Projects Leslie K. Paige. “Unfortunately, Armstrong’s top sponsor, the USPS, is going downhill fast financially and managing to lose millions on its sports sponsorships. Despite a corporate loss of $676 million in 2002, the most recent sponsorship contract with the cycling team reportedly cost the USPS more than $40 million. This does not include the costs associated with sending postal executives and their spouses on junkets to the Tour De France as they have done in the past.”
The IG report reviewed expenditures of $48 million for 11 USPS sports sponsorship programs active between the years 1996 and 2002. Besides the U.S. Cycling Team, USPS sponsorships included the New York Yankees ($3.7 million), the New York Giants ($1.9 million), the Chicago Bears ($632,500), and the Tampa Bay Devil Rays ($630,500). The IG found that the USPS was unable to verify revenue claimed as a result of the sponsorships, lacked goals and objectives for 10 of the 11 reviewed, and did not track or properly use events tickets and invitations in 2001. Since 1998, according to the report, the USPS has eliminated 200 sponsorships, leaving only 5 as of October 2002.
“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. 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 percent of the USPS’ total revenue and anecdotal evidence suggests that the USPS’ performance in the international arena is substandard. Congress, the Presidential Reform Commission, and the USPS Board of Governors ought to put the brakes on these wasteful expenditures,” Paige said.
“The USPS is a government-owned monopoly and does not need to spend money on ‘brand’ advertising. 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. Lance Armstrong will continue to deliver without USPS sponsorship,” Paige concluded.
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.