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Breaking Down Lance's RadioShack Deal

Lance Armstrong
AP
Lance Armstrong

Lance Armstrong will be back to the Tour De France in 2010 and moments ago, it was announced that he’ll be back with a new primary sponsor in RadioShack to form a new team.

The deal also interestingly includes the rights to Lance as he competes in events as a runner and triathlete.

While terms of the deal aren’t available, we’ll still be glad to break down this deal that was forged by Wasserman Media Group.

In terms of sponsor bang of the buck, it seems like RadioShack has a better chance to cash in on the attention Lance gets simply because they sell consumer products.

That’s what makes it a better fit than the Kazakh holding company who currently sponsors him and Armstrong’s other recent primary sponsors in the Discovery Channel and the U.S. Postal Service. In general, when you can buy something an endorsement is more measurable. And RadioShack provides another plus in that they are tied to technology, making it possible to have exclusive Lance branded gear in their stores should they wish.

RadioShack gets the reputation as a dying brand, but people in the know who follow the company understand that they’re actually holding up pretty well. Best Buy is always named as a beneficiary to Circuit City going out of business, but RadioShack is right up there.

Much of the value from this deal might come from whether Armstrong can win again. After today’s stage, Armstrong, 37, is in third place in the Tour De France. His teammate Alberto Contador is still in first with the yellow jersey.

If anyone questions the value of this deal, it will be over what the worldwide reach of the RadioShack brand is. Since Armstrong is big in Europe, where cycling is more popular, his endorsement might mean more over there. RadioShack has 5,800 locations nationwide, but the company has almost no traction overseas, save for a few authorized distributors mainly in the Caribbean. Perhaps they use Armstrong to help them open up some doors for them.

Questions? Comments? SportsBiz@cnbc.com

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