RadioShack, kicking off what it promises will be a reinvigoration of its marketing efforts, said Thursday that it will sponsor seven-time Tour de France champ Lance Armstrong’s new cycling team beginning next year.
Armstrong will compete for Team RadioShack in the 2010 Tour de France, as well as in running and triathlon events, the Fort Worth-based electronics retailer said. The company will also sponsor the Armstrong Foundation’s Livestrong Challenge Series, a 5K run/walk and cycling event that raises money to fight cancer.
“Teaming up with RadioShack makes sense for a number of reasons. For one, it’s very appealing to me that they have a huge base of stores throughout the U.S. and Mexico,” Armstrong, an Austin resident, said in a prepared statement. “We have an incredible opportunity to leverage Radio-Shack’s connection to tens of millions of people to spread the Livestrong message,” represented by the popular yellow plastic bracelets worn by supporters.
Lee Applbaum, RadioShack’s chief marketing officer said: “We are relaunching our brand with a new creative platform in early August. As one of the greatest athletes of our generation, a father, a cancer survivor and a tireless advocate in the fight against cancer, Lance Armstrong understands the power of keeping people connected, and that’s why we feel he’s the perfect partner for our brand.”
RadioShack has kept a low profile the past three years as CEO Julian Day has sought to get the company into fighting trim.
Day, an avid runner, heads a company that has cut costs, consistently makes money and was sitting atop more than $800 million in cash as of March 30.
Neither RadioShack nor Armstrong representatives would say how much money the deal is worth.
But it apparently won’t make much of a dent in the stash.
Wendy Dominguez, a RadioShack spokeswoman, said the company has never been involved in a sports sponsorship this big before.
Craig Depken, an economist at the University of North Carolina at Charlotte, speculated that the deal cost RadioShack between $5 million and $10 million a year. Armstrong will have to pay team members out of that, said Depken, who is vice president of the North American Association of Sports Economists.
Bob Stapleton, manager of Team Columbia, which is competing in the Tour de France, told Bloomberg News that major cycling team sponsors typically pay between $6 million and $15 million per year.
“If you ever got a number out of them [sponsors], you might be surprised at how little it is,” Depken said.
He noted that the recession has decreased the amount of money in sports sponsorships.
He said the economic benefit of engaging the cancer survivor/cycling champ may be “nebulous,” because few Americans pay attention to cycling on an ongoing basis.
Also, Armstrong probably won’t win the Tour, and RadioShack doesn’t have stores in Europe, where cycling is much bigger.
Still, Depken said, “if he’s on the podium, RadioShack is probably doing a good thing.” Armstrong is third in the Tour with three stages remaining.
RadioShack’s sponsorship will mark Armstrong’s return to an American cycling team. His present team, Astana, is sponsored by the central-Asian nation of Kazakhstan, a former Soviet republic.
The Texas cycling legend has ridden for teams sponsored by the U.S. Postal Service and Discovery Channel.
David Abrutyn of IMG Global consulting said there could be “pass through” opportunities to get RadioShack vendors involved or to bring exclusive Armstrong-related merchandise into stores.
Homer Erekson, Texas Christian University’s dean of business, said the company has clearly decided that the deal is worthwhile, even if Americans don’t watch much cycling and the company lacks an obvious link to the sport.
After all, many companies that sponsor bowl games aren’t synonymous with football, he said.
“I think what drives this is the number of times RadioShack will be touched through Lance Armstrong,” Erekson said.
“He has an incredible prestige. It’s going to result in a lot of touches.”
Depken suggested that RadioShack may feel compelled to spend some sponsorship dollars to meet the competition. Best Buy, for example, has sponsorships with NASCAR.
(Source: star-telegram.com)
RadioShack to sponsor Armstrong’s cycling team
