Shack attack? Is Radioshack under threat?

Monday, 19 April 2010

Radioshack is the US electronics retailer that you probably as the backer for Lance Armstrong’s team. But like any big company, it operates in a competitive field and there’s now talk that the company could be a takeover target. Today’s New York Post says that the company could be for sale, with rival Best Buy as a likely bidder, but private equity houses could be in the frame too.

Does this matter for the cycling team? Well let’s explore a few angles…

Texas
The cycling team was launched because of Texan connections. If the company gets taken over then these ties are unpicked, especially if the incumbent management get the ejector-seat treatment.

Long term deal
Teams often sign sponsorship deals that means the sponsor can’t walk away without paying a penalty, in other words even if the sponsorship deal was ripped up then the team could be safe. I don’t have the small print of the deal here so this is a guess.

…but a change of ownership
Sometimes these agreements allow some get-out clauses, “change of ownership” is one such thing.

Rumours
The financial markets are filled with rumours and the New York Post could be wrong, in which case there’s no change.

Conclusion
We’ll see what happens, this could be empty market chatter. Given the takeover talk is itself speculative, I’ll stop building on this. One thing is certain, Lance Armstrong intends to start the Tour de France and corporate deal making shouldn’t prevent this.

David Barnes April 19, 2010 at 5:47 pm

The Post business section is well connected. What this will bring for Lance remains to be seen but a good spot, I like the way you go beyond the sport.

David (Weehawken, NJ)

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