CHICOPEE, Mass. (AP) – Spalding Sports Worldwide is getting out of the basketball business to focus on its golf game.
In a $65 million deal announced Thursday, the nation’s oldest sporting goods company is selling the Spalding name for all products – including basketballs, volleyballs, footballs and soccer balls – to Russell Corp.
Spalding officials say the move will let them focus on developing and marketing their Top-Flite, Ben Hogan and Strata golf products, which account for about 70 percent of sales.
“We become a stand-alone golf company with those three brands,” said Spalding president and CEO Jim Craigie.
Craigie said the deal will also help the company retire some of its debt, but would not say how much. Spalding is a private company, and reported $90 million in sales last year from its sporting goods business. Total wholesale revenue for the Spalding name, including licensed products, is over $300 million annually, company officials said.
“That debt burden, plus a few other factors including increased golf ball competition and a very weak market out there … has had an impact on our company,” Craigie said.
The deal, which is expected to receive federal approval by the end of May, also gives Russell control of the name and inventory under Spalding’s Dudley brand of softballs. Russell also gets Sherrin, a brand of Australian-rules football equipment, and contracts with more than 60 licensees around the world for apparel, shoes, sporting goods and related products.
The deal marks Russell’s continued expansion in the sports, outdoors and athletic markets. The company, known for producing uniforms and other athletic wear, bought Moving Comfort in 2002 and Bike Athletic Co. earlier this year.
“It allows (Russell) to embark on a new strategy to be an athletic brand, not only a clothing brand,” said Scott Creelman, who will be president of Russell’s Spalding division.
Thomas Doyle, vice president of information and research for the National Sporting Goods Association, said the deal will benefit both companies.
“It gets Spalding down to a core business and the part of their company they’re most successful in,” Doyle said. “And it’s a good fit for Russell, which will have a strong equipment name tied to a strong clothing name.”
Russell, which is based in Atlanta, will continue operating the Spalding sporting goods business in the Springfield area.
Most of Spalding’s inflatable balls are made either in Asia or on the West Coast, and Craigie said the sale won’t impact the manufacturing and distribution of Spalding equipment.
Spalding, which will likely rename itself after one its golf ball brands, will continue producing the Top-Flite, Ben Hogan and Strata balls at its Chicopee plant. The company has about 1,000 employees.
Spalding was founded in 1876 by A.G. Spalding, a star pitcher for the Boston Red Stockings and later the Chicago White Sox. He retired from the mound to make baseballs.
It also was the nation’s first manufacturer of basketballs after the game was invented in neighboring Springfield in the 1890s.
The company’s centurylong domination of the professional baseball market ended in 1976 when the Rawlins Corp. of St. Louis was awarded the contract to supply balls to the major leagues. It stopped making basketballs at its U.S. plants in the 1980s.
Russell shares closed at $18.16 Thursday on the New York Stock Exchange.
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On the Net:
http://www.russellcorp.com
http://www/spalding.com
AP-ES-04-17-03 1717EDT
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