02/02/2011 01:57 pm ET Updated Jul 27, 2011

Gregg McArthur, McArthur Towel & Sports: Maker Of The Steelers' Terrible Towel Is A Packers Fan!

Come Super Bowl Sunday, Pittsburgh fans everywhere will be waving their Terrible Towels, hoping their beloved Steelers will bring home a record seventh Vince Lombardi Trophy. And while the towels' manufacturer, Gregg McArthur, will look out at the sea of yellow and black in Cowboy Stadium and feel a sense of pride -- he'll also be pulling for the Steelers to lose.

That's right, the man behind the Steelers' gridiron good luck charm is actually a diehard Packers fan -- and worse yet, the Terrible Towels are made in Wisconsin.

McArthur, 52, is CEO of McArthur Towel & Sports, his family's Baraboo, Wis.-based business originally founded in 1885. How to explain McArthur's longevity? As legendary Packers coach Vince Lombardi once said, "The only place success comes before work is in the dictionary." That's how you stay in the towel business game for 115 years.

I think I speak for football fans everywhere when I ask, the Terrible Towel is really manufactured in Wisconsin?

It's funny, we've become a big media story. I did an interview with ESPN radio in Pittsburgh a few days ago and I promised not to sabotage the Terrible Towels. The announcer said, "He sounds like a good guy, Steeler Nation," which is cool because I think both franchises are good for the NFL.

Your family has been in the towel business for a long time.

Our Scottish ancestors came over and initially made hammocks for a living. In 1885, my family got into making towels for YMCAs, schools and health clubs. We manufactured them until 1972, when the textile industry changed and it became cheaper to import towels. Since then, we've imported the towels and done custom designs.

How did you get involved in professional sports?

We went to the NBA in 1980 with an imprint of their logo. It took off, so we started to license towels to other leagues and companies like Gatorade. We make the towels you see on the bench. That led to the NFL, so now you'll see our custom towels throughout the season, at the championship games and, of course, the Super Bowl.

I've always wondered, what happens to merchandise printed up for the losing team?

The losing team towels get boxed up right after the game and shipped to the Third World. They are donated overseas, so we lose money, but we don't make a big run of towels until after the game -- only a couple of hundred. We budget for those.

Did you ever consider skipping out on the family business?

After I graduated from UW-Stout, I was looking at doing something else, but one of the sales managers passed away and my father kept the position open. I'd been sent to do the laundry service, delivering towels to colleges, and I wasn't sure I wanted to do that as a career, but here I am. I'm fifth generation and my daughter Lexie is marketing manager, so she will carry on the McArthur legacy.

Is the towel business steady?

It changes. Every year is different. Right now there's a worldwide cotton shortage, so we're never sure what's in store year-to-year, but towels don't change and it's premium advertising space. Sponsorship is great for teams and every season more and more franchises are interested. It's a good way to ensure fans see the sponsors. For the NFC Championship, we did 60,000 towels for the Bears and there were four different sponsors. They lost, but the message still got out there.

You were acquired by WinCraft in the early 2000s. Can you tell us about that experience?

In 1999, we were bought by a company called Action Performance that specialized in NASCAR. It was a good relationship, but they went out of business. We had a clause that said we could buy the business back. A few years later, we were acquired by WinCraft, which has 325 licenses. McArthur has some 50 licenses and longstanding distribution, so it's been the perfect marriage.

Have things changed under WinCraft?

We're not perfect at everything, so we've capitalized on WinCraft's reach. There has been some consolidation, but there are a lot of moving parts, and WinCraft shares our management philosophy. The partnership has opened a lot of doors. They have fantastic digital equipment and we've capitalized on their IT infrastructure. We have to be creative in the towel industry because at the end of the day, we're peddling rags.

How do the towel orders work?

We'll do anywhere from 36 promotional pieces to hundreds of thousands, so it's a challenge managing inventory. Often, it's a quick turnaround. We did tens of thousands of Terrible Towels for the Steelers right before the playoffs. We have three manufacturing plants in Chicago, Minneapolis and Chippewa Falls, Wis., where we utilize Chippewa River Industries. They hire developmentally challenged workers and we're proud that they're part of our manufacturing efforts.

How do the sales break down?

Half of our work is making promotional towels, followed by the NFL, which is nearly a quarter of our business, and then other leagues. We still make locker room towels for the YMCA, which has been going on for more than 115 years.

The Terrible Towels are everywhere. That must be a big boost every year, no?

Not for the bottom line. In 1996, the Terrible Towel trademark was gifted to the Allegheny School by beloved Steelers broadcaster Myron Cope, who died in 2008. He started the phenomenon in 1975, and the schools are set up for people with intellectual and developmental disabilities. The Steelers control the distribution. The profit margin means we basically break even, but we're happy to be involved. It's a great organization.

Has the Terrible Towel been an inspiration for other teams -- say, the Packers?

When the Steelers played the Cowboys in Super Bowl XXX, I looked around and saw all these yellow towels. I thought we needed to do something like this for the Packers. The next season, we debuted the "Title Towel" and everyone loved it. Fortunately, the Packers went on to win the Super Bowl that year.

Do the Packers have a towel of their own for Super Bowl XLV?

This year is the perfect storm. The slogan sells it, so McArthur brought out the Titletown Towel to match the Steelers Terrible Towel. We won't have as many, but we are pumping a lot of Packer towels into the system. We've made hundreds of thousands and we're hoping to sell a ton of them through our retailers ... if the Packers win the Super Bowl, of course.

What are your Super Bowl plans?

I am headed down to Dallas on Thursday. We've got lots of meetings, and NFL Properties always throws a great party. It's a lot of fun and a good networking experience, but this year is extra special because the Packers are in the big game.


Well, because it's the Packers and Steelers, I think fans will be into this Super Bowl even more than usual. It's a house divided. People won't be on the fence -- they will root for one or the other. In the end, I think it will be a good game, but Aaron Rodgers has it. The Packers will win by a touchdown.

Name: Gregg McArthur
Company: McArthur Towel & Sports
Age: 52
Location: Baraboo, Wis.
Founded: 1885
Employees: 30
2011 Projected Revenue: Undisclosed

The original version of this article appeared on AOL Small Business on 2/2/11.