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Audit of Postal Service raps sports sponsorship
Question of the Day
An inspector general’s report is criticizing the U.S. Postal Service’s management of sports sponsorships, including the cycling team led by Tour de France superstar Lance Armstrong.
Postal Service officials said they began making improvements before receiving the new study, and they challenged some findings of the report.
The inspector general’s analysis charged that the Postal Service had not effectively managed the sponsorships, was unable to verify revenue from them, lacked goals and objectives for some sponsorships, and did not track use of tickets to events.
The Postal Service has one national sponsorship — Armstrong’s professional cycling team — and several local sponsorships, including the New York Yankees, the Chicago Bears, the Tampa Bay Devil Rays and the University of Notre Dame.
The agency has declined to make public the cost of the sponsorships, arguing that it is proprietary information. The agency did note, however, that an independent analysis estimated the value of the publicity at $19 million in 2001.
The aim of the sponsorships, like that of any advertising, is to generate publicity and income for the Postal Service, which competes for business in package, overnight and international delivery.
Under its charter, the Postal Service is required to operate like a business, breaking even over time, and does not receive tax money for its operations. Eighty-two percent of its $66.7 million in revenue in the fiscal year ended Sept. 30 came from first-class, periodical and standard mail.
Anita J. Bizzotto, chief marketing officer for the Postal Service, said the agency agrees with many of the inspector’s recommendations. She said it has begun tightening record keeping to better track costs associated with the sponsorships, has a system to track sales associated with the teams, and is monitoring use of tickets to events so they can be directed to approved guests.
In addition, no new sponsorships will be undertaken without full review, she said.
However, a proposal to have a single postal official in charge of all sponsorships was rejected, she said. Instead, the national sales office will continue to manage the pro cycling sponsorship, while management of local sponsorships will be decided by the chief marketing officer.
She did take issue with some findings in the audit:
The audit says the agency was not able to track revenue because it didn’t have a system to do so. The Postal Service has several systems to track revenue, she said, but field representatives did not always enter data correctly for a particular event.
The report said tracking media exposure can be distracting compared with studying actual sales results. “We do not agree entirely with this statement and believe that media exposure is a very important part of any sponsorship arrangement,” she replied.
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