Why did Russell remove Doug Kelly?

Tim Darnell

April 1, 2008

The firing, at press time, of Russell Athletic president Doug Kelly – a highly respected and accomplished sporting goods professional – has sent shockwaves through his industry.

"I really can't comment very much on it, because it caught me completely by surprise," says Matt Powell of SportsOneSource.com, a leading Internet portal for sporting goods industry professionals. "I thought he was lining things up and the company was going in the right direction. Sometimes these things revolve around personality issues, but I truly don't know." AB_Russell

"Doug Kelly is one of the most respected and accomplished executives in the sporting goods industry," says Mike May, director of communications of the Sporting Goods Manufacturers Association. "Whether it was with Converse, Easton, Pro Player or Russell, he always brought an entrepreneurial spirit with him which many people have admired over time."

This was the second time in two years the Atlanta-based sports apparel company has removed its top executive. Kelly took the helm of the 100-year-old company after Warren Buffett's Berkshire Hathaway purchased it in 2006 for almost $600 million.

The company did not respond to Business to Business' requests for comment.

"I don't think Russell is in trouble; it could just be a flattening of the company's managerial structure," says John Horan, longtime publisher of Sporting Goods Intelligence, a newsletter covering the sporting goods industry. "There may not be a lot more to it than what the company said.

Basically, Russell doesn't seem to think it needs a CEO, which is evidenced by the fact his work has been divided up among three other executives."

The timing of Kelly's removal has befuddled several industry observers. "It is curious, as it seems he was taking on more responsibility," Powell says. "Russell owns the Spalding title, and he was taking that on as well."

Kelly also is the executive who led Russell into a sponsorship package with the Atlanta Falcons. When his firing was reported, the Atlanta Journal-Constitution attempted to connect the Falcons' PR troubles, particularly with Michael Vick, to Kelly's firing. However, Horan doesn't believe the two are connected.

What could be an issue, however, is Russell's future relationship with the NFL. Reebok's exclusive on-the-field apparel license with the league is set to expire within four to five years.

"Russell is one of several companies that have been positioning themselves when that deal expires," Horan says. "[The Falcons' deal] may have been an attempt to gain some more credibility with the league. Doug has some history with the league, and I'm sure he wanted to take Russell in that direction. Now, I don't know if they want to continue in that direction or not."

"The Reebok deal was just renewed," Powell says. "Maybe Russell was going to go after some other business in that area, but I do not see them as a competitor for the apparel deal."