In these troubling times, it’s important to remember something called “fun.”
Our weekly newsletters tend to cover big industries like retailing and automobiles. But we also find smaller, niche industries fascinating. Here is a look at who makes the balls used by America’s major team sports, with as much history as we could discover.
As we investigated three great American brands and their history – Rawlings, Spalding, and Wilson – it became clear that these are both among the most beloved and most unloved brands. Beloved because most of us have used those products and know their names. They are old brands, seen in most American households at one time or another. Unloved because their owners seem to buy and sell them over and over again and never keep them very long. Today it looks like they may have more stable ownership, but only time will tell. Certainly their pasts are extremely convoluted, as you will see in the following paragraphs.
Baseball and Rawlings
Before 1876, pitchers made their own baseballs. That approach had obvious weaknesses. Then, in 1876, Boston Red Stockings pitcher A.G. Spalding started making standardized balls, and went into the ball business full-time. Spalding’s company became the source for major league balls. Spalding also acquired the Reach brand, which they used on some products, including baseballs. In 1929, the A.G. Spalding company went public.
In 1955, Spalding bought another key sporting goods maker, Rawlings. Rawlings was founded in 1887 as a sporting goods store in St. Louis by brothers George and Alfred Rawlings. They also published a catalog to reach a broader audience.
When Spalding (the second-biggest sporting goods maker) bought Rawlings (fourth biggest), they started having their baseballs made by the Rawlings division. But the federal antitrust folks did not like Spalding owning former competitor Rawlings. Moving at their usual snail’s pace, the feds took until 1963 to force Spalding to sell Rawlings. Rawlings was purchased for $10 million by private investors and returned to being a private company.
At the same time, Spalding liked supplying the MLB with baseballs, but Rawlings had the baseball production skills. So Spalding signed a contract to have the newly independent Rawlings keep making baseballs for it, to be sold to the teams with the Spalding brand on them.
When this contract expired in the mid-1970s, MLB still wanted the Rawlings balls. So, from 1977 on, the league has used Rawlings balls. Today the Rawlings factory in Costa Rica makes over two million baseballs a year. (Rawlings is also a major producer of baseball gloves.)
Who has owned Rawlings since 1963? After the private owners, try this for craziness:
- In 1967, Rawlings was bought by conglomerate Automatic Sprinkler Company of America (later named A-T-O, then called Figgie International after CEO Harry Figgie).
- In 1994, Figgie spun out Rawlings as an independent public company.
- In 2003, the K2 ski company bought Rawlings for about $70 million.
- In 2007, the diversified consumer products company Jarden bought K2.
- In 2015, the even more diversified consumer products company Newell Rubbermaid bought Jarden.
- In 2018, a partnership of MLB and Seidler Equity Partners bought the Rawlings business for $395 million.
So does anyone love this poor old company, handed from one owner to the next to the next, lost inside giant diversified companies? And who the heck is Seidler Partners, do they even care about baseball or will this just be another buy-and-sell deal?
Surprise, surprise! Seidler is run by the two Seidler brothers, Peter and Robert. Their grandfather just happened to be Walter O’Malley, the legendary owner of the Brooklyn and then Los Angeles Dodgers from 1950 to 1979. Today the Seidler family is a major investor/owner in the San Diego Padres. Perhaps old Rawlings, owned by MLB and baseball lovers like the Seidler brothers, has found a lasting home after all.
Yet, in the intervening years, think what it must have been like for the people working at the company. How many new forms, new reports, new strategies, and different cultures they must’ve dealt with. None of that makes it easy on a company, its employees, its suppliers, or its customers. Dealing with change can be hard enough, without the excess challenges of being part of yet another company every few years. It can be a real circus.
Back to Spalding
What became of our friend Spalding?
Not only did they have a nice run with MLB from 1876 to 1976, but they also made the basketballs for the National Basketball Association from 1983 to 2019. In May of 2020, it was announced that the NBA was switching to Wilson for their balls – more on Wilson in a minute.
We last left Spalding in 1963, when they were an independent public company, having recently lost their Rawlings division. So now try this circus of ownership:
- During the 1960s, Spalding stock was bought up by public company Dunhill International, a diversified company with interests in tobacco (Dunhill), bank notes, and infant feeding and bottle products (Evenflo).
- In 1967, Dunhill was merged with muffler maker AP Parts and renamed Questor Corporation.
- In 1982, Questor “went private,” dropping off the stock exchange.
- In 1984, parts of Questor (Spalding and Evenflo) were bought by the sons of Venezuelan supermarket operator Diego Cisneros. The Cisneros group renamed these businesses the “Spalding and Evenflo Company.”
- In 1996, pioneer private equity firm Kohlberg Kravis Roberts (KKR) bought Spalding and Evenflo from the Cisneros group, possibly for as much as $1 billion. Two years later, KKR broke Evenflo and Spalding into two separate companies. As is often the case in private equity deals, both companies were saddled with more debt.
- In 2003, after many efforts to restructure Spalding and reduce its heavy debt load, KKR sold Spalding to athletic apparel and t-shirt company Russell.
- In 2006, Warren Buffett’s Berkshire Hathaway bought Russell for about $600 million. Buffett saw it as a good addition to the Fruit of the Loom company, which he had purchased in 2002 after it had gone bankrupt. Mr. Buffett seems to have a passion for longstanding brand names which he thinks have potential, even if they have been mis-managed in the past. Today Spalding is part of Fruit of the Loom, which in turn is part of Berkshire Hathaway.
So there you have another company literally “footballed” around by owners. But, like Rawlings, maybe Spalding finally has a good owner, an investor known for buying and holding rather than flipping what he buys for short-term profits.
Then, yet another circus of ownership begins:
- In June 1967, Texas wheeler-dealer Jimmy Ling’s LTV (for Ling-Temco-Vought) conglomerate bought Wilson & Company, including the sporting goods operation. At the time, Wilson was twice the size of LTV.
- Six weeks later, LTV took Wilson Sporting Goods public as a separate company, offering the public a one-half interest in the company and keeping half.
- In 1970, snack and beverage giant PepsiCo bought Wilson Sporting Goods.
- In 1985, PepsiCo sold Wilson Sporting Goods to private equity firm Wesray Capital, run by former Treasury Secretary William Simon.
- In 1989, Wesray sold Wilson Sporting Goods to the Amer Group, a Finnish conglomerate that distributed Toyotas and sold cigarettes in Finland.
- Over time, Amer morphed into Amer Sports, focused on sporting goods, including Wilson and the French Salomon brand (skis, snowboards, etc.).
- In 2019, Chinese sportswear giant Anta bought Amer for about $5 billion.
And thus, after a third ring in our circus of conglomerates and private equity players, we find both the NFL and the NBA buying their balls from a Chinese-owned company!
P.S. In case you wondered, both MLS and FIFA soccer (foot?) balls have been made by the big German sports company Adidas for decades. Hockey pucks have been made by a small Canadian company, Inglasco, since the 1980s. These are two islands of stability in this complex, ever-changing industry history.
When we finally get sports up and going again, we look forward to seeing Rawlings making home runs, Spalding in our homes and gyms, and Wilsons going through the goalposts.
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As always, we appreciate your time and interest. Please pass this email along to anyone you think might find it of interest. Donations to support our cause, learning from business history, are always welcome!