MLB Goal: Spend 20% of Its Money With Diverse Businesses In Next 5 Years

Major League Baseball (MLB) proudly claims that for 21 years it has run the longest Supplier Diversity Program in all major sports. Now, the organization wants to build on that tenure and boost procurement further with minority-owned firms, including black-owned businesses.

In fact, the League aims to double its spending with diverse businesses within the next five years.

That news comes after MLB earlier this month conducted its annual MLB Diversity Summit. Among the initiatives discussed were how to advance spending between MLB and MLB clubs with diverse-owned businesses as part of the six-day Baseball Winter Meetings. Another initiative: Elevate women into the pipeline of on-field operation roles.

The event in San Diego gave new and existing diverse entrepreneurs a chance to network with MLB procurement leaders, increase their potential to sell more goods and services within the League, learn what teams opt for in selecting a supplier, and establish new relationships or build on existing ones within the sport.

Corey Smith, MLB senior director of supplier diversity and strategic sourcing, talked with Black Enterprise to offer some perspective on MLB’s supplier diversity initiatives, what new developments came from the winter meetings, and how potential suppliers can do business with the League.

Black Enterprise: We hear among the big topics discussed at this year’s MLB Winter Diversity Summit was boosting the number of goods and services MLB and MLB Clubs purchase from black and other minority suppliers. What is the goal to boost spending?  

Our Supplier Diversity Program, which falls under the Diverse Business Partners Program, has since 1998 focused on creating growth and economic impact for diverse businesses. That includes black and minority-owned businesses.

Since the Supplier Diversity Summit was launched, nearly $2 billion have been spent with diverse businesses. The goal is to have MLB and MLB clubs spend 20% of their dollars buying goods and services from diverse suppliers by 2024, up from 10% now. In the last nine years, MLB has increased diversity spending in MLB by more than 450%.

BE: What were some of the top growth strategies that came out of the meetings to help reach that goal?

We discussed the organic growth of businesses through partnerships with diverse businesses. So start by doing business with one MLB Club and grow that over time to doing business with as many of the 30 Clubs and MLB businesses as possible.

BE:  What kind of businesses is that spending typically with?   

The Supplier Diversity Summit at the Winter Meetings is only four years old. Our overall Supplier Diversity Program consists of spend with small businesses owned by black, Hispanic, Asian, Native-American Indian, LGBT, women and veterans. Forty-five percent of that spend is with minority-owned businesses, including black firms.

BE: What were the hottest topics affecting black suppliers discussed during the meetings?

We spent a lot of time discussing business readiness, including a supplier’s operational and financial ability to take on MLB as a customer. We also talked about innovation, which means we are looking for black entrepreneurs that align with our business growth. For example, diverse businesses in e-gaming, virtual reality, and statistical analytics. So to the extent that black businesses are created in these new industries as opposed to more traditional sectors or areas with low barriers to entry, their diversity actually works to their advantage.

BE: Why are those topics significant in determining how black suppliers do business with MLB during the next 3-5 years?

Business readiness is important because to handle a larger business like MLB, we look for operational excellence as well as financial stability. In addition, our growth areas are in the technology space and creating new ways for fans to consume our game, so to the extent that we are leveraging technology to achieve that, having a supply chain that supports those efforts is important.

BE: How would you describe diverse vendors that are now doing business with MLB? 

We have such a talented pool of diverse businesses as a part of our supply chain, across our entire business from marketing companies, communications companies to consulting companies to financial audit companies. Small businesses to larger diverse firms. Local companies only doing business with their hometown team to global companies helping us with our international business. Some have been with us for 20 years and some received their first contract this year.

  BE: Why is now a good time for those vendors to line up deals with MLB or MLB clubs?

The Supplier Diversity Summit at the Winter Meetings is timed perfectly because this time of year, during the off-season, is when our Clubs are preparing for the upcoming season, so from a budget perspective, this is when the bulk of the dollars are being spent—getting ready for the next season.

BE: What are some of the biggest challenges diverse suppliers face whey trying to sell goods or services to MLB?

Suppliers face the same challenges with us as they would with trying to get in the door with any potential client. There usually is an incumbent already doing what you want to do for MLB. So that raises the question of how do you identify the unique and innovative things about your business that would not only attract me to your value proposition but also leave the incumbent who I have established a relationship with when there is no learning curve? That is a challenge all businesses face, something not unique to MLB. To me, innovation in addition to great pricing and quality work is what’s needed to overcome that.

How can potential or existing suppliers get more details to start doing business with MLB or expand a current relationship?

For more information on the Diversity & Inclusion program at MLB, visit www.mlb.com/diversity-and-inclusion.