Postal, cycling parting ways at season's end

As the saying goes, all good things must come to an end. One of the biggest and most widely recognized sponsors in the sport of cycling will be no more after the 2004 year.

There have been a number of snippets in the press from critics of the sponsorship program, saying it's a waste of money to sponsor a cycling team. They've asked for proof that the sponsorship had a positive impact, but like all marketing tactics, it is very difficult (if not impossible) to quantify the effect of an ad campaign or sponsorship move. Who can truthfully describe the exact effect of money spent on marketing? Sadly, because there was no easy way to describe the positive effects of sponsoring one of the biggest cycling teams in the world, the decision-makers at US Postal succumbed to pressure and decided to pull the plug at the end of the year.

Curious to find out more, I did some digging and discovered interesting results.

For an organization like the United States Postal Service that has annual operating expenses in the billions of dollars (look at the numbers yourself), it seems a bit unreasonable to cry over sponsorship money. We're talking a few million dollars (maybe 10?) a year on a high-profile, globally recognizable cycling team, which is literally only a fraction of a percent of what is spent by the US Postal organization.

From the 2003 Annual Report, the operating revenue for the year was $68,529,000,000 (yes, that's 68.5 billion dollars), operating expenses came to $63,902,000,000, income was $4,627,000,000, and the number of career employees was 729,035.

So we've got 3/4 of a million people working for a company with $68 billion dollars in revenue, $63.9 billion in expenses, $4.6 billion income (which I assume represents profit), and yet people blame a cycling sponsorship for the financial strains on the USPS organization. I don't get it. If you're gonna question anything about an organization's spending, why go after the something that represents 0.015% of total expenses?

For sake of argument, consider the following. If you paid your average employee $30,000 annually, cutting headcount by just 500 people would reduce the outright operational costs by $15,000,000. That would still leave you with another 728,535 employees. Want to really make a difference? Reduce employee headcount by 28,535 (to bring the total to an even 700,000 people) - presto! You've just saved the US Postal Service $856,050,000 per year!