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Will Suppliers Strike Out? : Baseball's Ancillary Businesses Try to Cover All Their Bases

August 12, 1994|JAMES F. PELTZ | TIMES STAFF WRITER

Like an errant player caught in a rundown between bases, the industry that supplies everything from hot dogs to uniforms for big league baseball would find itself trapped by the players' strike that was set to start today.

There would be nothing the suppliers could do to recapture their sales to the national pastime except wait and hope the walkout is brief. But the strike's potential impact on their operations would be decidedly mixed, depending on each company's size and what it sells to the game.

Take Carl J. Shields, the man who literally puts the baseball in Major League Baseball. He's chief executive of Rawlings Sporting Goods Co., the Fenton, Mo.-based concern that supplies the roughly 720,000 baseballs the big leagues use each year.

Fortunately for Shields, the balls--along with bats, uniforms and other gear that it sells to professional baseball--account for less than 3% of Rawlings' $140 million in annual sales. Besides, this year's balls have already been shipped and paid for and now wait in storage at each stadium, he said.

"If it had started in April or May, then you would have had a larger risk," Shields said.

Overall, the strike's imminence has sparked a flurry of predictions about what effect baseball's absence would have on the nation's economy. The predictions show why economics is dubbed an inexact science: Various forecasters warn that a walkout could either cause a damaging ripple effect on cities with pro teams, or be hardly felt because fans would merely spend their money elsewhere.

But there's no disputing that a strike would quickly inflict some damage on certain industries and their workers.

Just ask Tom Clougherty. He's the marketing vice president of family-owned Clougherty Packing Co. in Los Angeles, which makes Dodger dogs and other Farmer John brand hot dogs sold at Anaheim Stadium and Jack Murphy Stadium, home of the San Diego Padres.

Clougherty, whose firm sells a combined half-million pounds of hot dogs to those parks each year, said he "really couldn't put a dollar amount at this point" on what a strike could cost the company. "It has a financial impact, although the majority of my sales are retail," he said, noting that baseball represents less than 10% of his firm's revenue.

"Actually, I'm more concerned with the people who stand out there" selling the dogs to fans, Clougherty said.

Indeed, if any one group strikes out from the game's labor strife, it would be the aisle vendors and concession stand workers who hurl the peanut bags and pour the beer.

They would lose their jobs today, although those jobs are secondary sources of income for many of the workers, said David Flaherty, a spokesman for ARA Services Inc., the giant food services concern that recently assumed management of Dodger Stadium's concessions. ARA also provides those services to five other big league parks.

The ARA vendors--there are between 800 and 1,000 at Dodger Stadium and at each of the other venues--work strictly on commission, which typically pays them $80 to $100 a night, Flaherty said. The concession stand employees are paid a salary of about $6 an hour.

"We wouldn't want to see it (the strike) go more than a few games," he said. "We prefer not to see it happen at all."

ARA itself, a closely held company based in Philadelphia, won't disclose the sales that Major League Baseball provides, except to say that it's "an important part" of its food and refreshment group, which accounts for about half of ARA's $5 billion in annual revenue.

If a strike drags on, however, "it could have a significant impact on our ballpark concessions," Flaherty said.

The impact would be less serious for Anheuser-Busch Cos., the St. Louis-based producer of Budweiser, Busch and other beers. The nation's largest brewer won't say how much beer it sells at, say, Dodger Stadium or Anaheim Stadium or to baseball overall, but it's a fraction of the 87 million barrels the company ships annually.

As for Anheuser-Busch's massive advertising effort, the company's contracts with television and radio stations include terms that free Anheuser-Busch from paying for ballgame ads that would not appear.

"We will not pay for something we didn't get," said Tony Ponturo, an Anheuser-Busch vice president for sports marketing. "But we will miss the marketing value of those games."

In any case, the strike's likelihood prompted Stuart F. Meyer, president of the St. Louis Cardinals (which Anheuser-Busch owns), to issue a statement Thursday saying that a walkout "would not noticeably affect" the brewer's profit.

But the memorabilia market would definitely feel the impact if the season ends for good, said Craig Mankowski, Rawlings' chief financial officer.

Rawlings, besides making baseballs for the big leagues' regular season and playoffs, also produces specially marked baseballs for the World Series. If a strike wipes out the season, that World Series inventory will jump in value, he said.

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