Venerable sporting goods brand Rawlings, now under the ownership of MLB and a private investment firm co-founded and led by San Diego Padres general partner Peter Seidler, is considering the development of a second plant to produce official league baseballs that would supplement the current one in Costa Rica.
Peter Seidlerap images
Official league balls have been made exclusively in the Central American country since 1987, leading up to the completion earlier this month of a $395 million deal in which Seidler Equity Partners and MLB purchased the 131-year-old company from Newell Brands Inc. As part of the new ownership structure in which the California-based firm will be lead owner and MLB a 25 percent equity holder and on the board of directors, Seidler said a second factory for official balls is being considered.
“We’re studying whether it makes sense to have a second facility somewhere else,” Seidler said. “If anything happened to the first facility, like a fire or a force majeure event, we could have a second one that would be able to continue manufacturing the balls. We’re in the early stages of this, but the idea is to ensure the production of the baseballs under any circumstances.”
Rawlings, which was founded in 1887, had $330 million in net sales last year before being sold in June to Seidler Equity Partners, led by Peter Seidler and Major League Baseball for $395 million. getty images
The ownership of the St. Louis-based Rawlings by the league and an entity directly connected to one of its team owners also is designed to provide MLB a closer role in the production and specifications management of its official ball, as well as to heighten efforts around future research and development.
“There is arguably no single product more important in professional sports than the baseball itself. Minor tweaks in the specifications in the ball can obviously produce dramatically different outcomes on the field,” said Chris Marinak, MLB’s executive vice president of strategy, technology and innovation. “So it made a lot of sense, both from a risk management and a forward-looking research perspective, to have a more active, vertically integrated role in the company.”
For MLB, the deal was developed through its Baseball Endowment L.P. fund, which earmarks some national revenue for investments in outside ventures.
In May, MLB released the findings of a detailed scientific study on the aerodynamic properties of the ball, suggesting the recent spike in the league’s home run rate could be in part due to a more centered pill within it. Seidler said the continued monitoring of the ball’s properties, along with the overall operations of Rawlings, will be made on a deliberate, research-driven basis.
“We’re going to very methodically analyze every step of the process,” he said. “We’re going to put our typical approach into the Rawlings equation. It’s boring and methodical, but it’s how we’ll go about growing Rawlings, one segment at a time.”
Rawlings’ contract as the league’s official ball and helmet supplier runs through 2021. Marinak said a renewal bid of that deal will likely be constructed on a cost-plus basis in which Rawlings’ overhead to produce the products will be combined with a small, to-be-determined percentage.
First Look podcast, with Rawlings discussion beginning at the 14:07 mark:
