Field of failed dreams
Jul. 24, 2008
ELLI WOHLGELERNTER , THE JERUSALEM POST
It's not that playing baseball in Israel is so important, when there are real bombs bursting in air and real rockets' red glare; it's just that the idea was so novel, the vision so grand, the imagination so captured and emotions so impassioned that few believed it could ever happen. And then, amazingly, it did. And then, sadly, it died.
The dream actually started to unravel just minutes after the maiden season ended last August 19: After the Beit Shemesh Blue Sox won the Israel Baseball League championship game, Commissioner Dan Kurtzer and the league brass presented them with the championship trophy. Missing from the ceremony was the league founder, Larry Baras. He had slipped out in the middle of the game.
Before long it became clear why: There were serious financial issues affecting everyone connected to the league, starting with the players.
"I saved every check that I got this summer from the league, my entire salary, and deposited them the day after I got back to the States," one player e-mailed after the season. "Well, a week later, the checks didn't cash because the league had insufficient funds, so every purchase that I made since then has needed to come from a loan account which I now need to pay back, plus interest, plus overdraft fees... I worked for a whole summer and have yet to get paid."
That became a familiar, angry refrain heard from many many players, and they weren't alone. At least 23 companies, vendors and individuals were owed money at season's end, including the fields where the games were played; Kfar Hayarok, where the players lived; and the Sports Channel, which broadcast some of the games.
When investors and the advisory board of the IBL asked how much money had come in and where it had gone, Baras promised to provide a full financial disclosure. The board members - including Smith College professor Andrew Zimbalist, the preeminent baseball economist in America; Marvin Goldklang, minority owner of the New York Yankees and owner of four minor league teams; Randy Levine, president of the New York Yankees; Marshall Glickman, former president of the NBA Portland Trailblazers; Marty Appel, former Yankees public relations director; and Dr. Stuart Hershon, team physician for the Yankees - never received the breakdown.
Some of the board members were less actively involved, like Levine, who was there more for show. Most of the group served as unpaid consultants, motivated by their love for the game, their love of Israel and their desire to fuse those dual passions. But as the questions mounted and no answers were forthcoming, they grew impatient, sensing something was very wrong. The dream was falling apart. THE ISRAEL Baseball League started amid great fanfare and brilliant preseason hype. American Jewry went gaga over the idea, with dozens of adults and teenagers alike offering to do anything needed - for free even - just to see the dream get off the ground.
But two weeks after the season ended, a 4,500-word exposé was first posted by this reporter on the Web blog site TabloidBaby.com and in four Jewish newspapers, detailing the inside story of a problem-plagued season that included late paychecks; a players' near-strike; a high-profile manager who trashed the league in the media and was subsequently fired; and substandard playing conditions and living quarters for the athletes, including no laundry service, no weight room, no ice for sore muscles and poorly manufactured bats that kept breaking. The situation nearly turned tragic when a player was almost killed by a batting practice line drive, a near-miss which might have been prevented with proper equipment.
While many at first were quick to excuse the IBL's troubles, attributing them to nothing more than the typical growing pains experienced by any startup company, the league's advisory board refused to accept that as an excuse. It wanted Baras to show financial transparency in his operation, and insisted that he reveal how much money was raised and how much was spent.
"Several of us had been arguing with Larry and Martin [Berger, league president and COO] for some time, in view of our understanding that they were continuing to solicit investors, without providing them or us with the financial results of operations by the league and its franchises for last season," advisory board member Goldklang said last fall.
On September 19, Goldklang and Kurtzer - the former US ambassador to Egypt and Israel, and now a professor at Princeton - held a four-hour meeting in New York with Baras, which included Zimbalist on a speaker phone, in which they demanded an exact financial accounting of the season's income and expenditures, as well as how much money was owed.
Kurtzer especially felt the need for financial clarity. Not only was his name on the line, but also his word: He had personally guaranteed the players that each and every one would be paid in full.
Over a year before the inaugural season began, Baras had said that he was budgeting $3 million for the first season, which he would be able to raise "very easily." Now, despite the pressure from Kurtzer and the advisory board, Baras would not divulge that financial information, which later was revealed to be a deficit of $475,000 in Israel alone, and some $1.5 million overall.
"Larry indicated that the league didn't have financials available nor, at least as of September, an accountant to prepare them," Goldklang said after the season. "I responded by offering to pay for an independent financial professional acceptable to Larry to review and assemble the financial information in an expeditious manner. When Larry did not accept that offer, there was, in my mind at least, a crisis of confidence. I was never entirely sure - nor am I sure even now - of exactly how much money was raised."
Doubts over the league's finances were reinforced by the revelation that a lawsuit was filed against Baras in US District Court in Massachusetts on September 24. Natalie Blacher of Dade County, Florida, claimed that Baras duped her out of $275,000 that was supposed to go toward his bagel company, SJR Foods, but instead went to "his personal living expenses or expenses which should be charged to IBL."
The suit alleged fraud, securities fraud and breach of fiduciary duty, contending that "from February through May 2007, contrary to his promise and fiduciary duties to Blacher and despite his verbal assurances, Baras failed to provide Blacher with any financial statements or otherwise comply with her request for financial statements and the other material documentation regarding the company's business and financial condition."
Baras told WCVB-TV in Boston that the claims in the lawsuit were "absolutely, 100 percent, not true," and that his SJR Foods is still "a profitable, functioning company of which [Blacher] is a shareholder." He maintained that Blacher could still see a return on her investment, and that "the goal is still to sell the company and distribute the proceeds to the shareholders." He denied using any money invested in SJR Foods to prop up the baseball league, which he said would continue to operate "despite the distractions."
BUT THE "DISTRACTIONS" and the lack of financial transparency were now affecting the IBL's business dealings with everyone. Spectrum Capital Group, an investment banking company, had agreed in September to loan the IBL money. When Blacher's lawsuit was revealed, the deal was called off.
"You never disclosed the existence or threat of this lawsuit to us," Michael Lederman, Spectrum's managing partner, wrote Baras the next day. "Had you done so, we would not have entered into the agreement. The agreement is hereby terminated and canceled, effective immediately."
The advisory board members were also growing increasingly frustrated, and suspicious, over Baras's lack of financial transparency. On November 14, Kurtzer and nine other board members quit the IBL, submitting various letters of resignation. Several other advisers did not submit specific letters, but requested that their names be removed from the board, including baseball commissioner Bud Selig, his wife and daughter, all of whom had served in a supportive role rather than as part of the hands-on functioning of the league.
"It has become apparent that the business leadership of the league has ceased to perform in an effective, constructive or responsible manner, and has failed to manage its capital and other sources in a manner likely to produce successful results," Goldklang and Zimbalist wrote in their resignation letter.
Baras did not issue a statement on the lawsuit or on the resignations, but IBL President/COO Berger sent an e-mail to the players thanking the resigning board members "for their help in launching this amazing venture. I want you all to know that this will have no effect on the incredible things going on right now with the league... We have every intention of playing next season, and will be updating the Web site shortly with exciting news."
OTHERS WERE less optimistic about the IBL's future, but were just as passionate about professional baseball in Israel. Four days after the IBL 10 quit, a new baseball league was announced: the Israel Professional Baseball League. It was created by former IBL players and investors, led by multimillionaire Jeffrey Rosen, one of the main investors of the IBL and the owner of the Haifa basketball team; Michael Rollhaus, another IBL investor who served as general manager of the Beit Shemesh Blue Sox; and Alan Gardner, a Blue Sox player.
Israel, hardly big enough to support one league, was now being fought over by two.
Both leagues continued operating in expectation of a season in 2008, but there was a problem: Playing baseball in Israel needs the approval of the Israel Association of Baseball. Without its certification, no one could take the field. And it too was growing frustrated.
While the IAB - the governing body for baseball in Israel - was not involved in the actual running of the league, it was embarrassed by the debts that had accumulated in its backyard.
On January 9, the IAB sent Baras a letter terminating their agreement.
"They owe money in Israel, that's why we terminated the relationship," said Peter Kurz, secretary-general of the IAB. "We have been pressuring them for six months, and their answer was, 'We'll have the money next week, we'll have it next week.' And we got tired of it."
The future of baseball here needed to be resolved. On January 31, a meeting was held at the Penn Club in New York, attended by 14 people associated with the IBL, the IPBL and the IAB, including two on speaker phone from Israel.
Baras was not invited, but the IBL was represented by Berger; Dan Duquette, director of baseball operations; and Ami Baran, manager of the Netanya Tigers. Other participants included Jeffrey Royer, general partner of the Arizona Diamondbacks and the largest individual investor in the IBL, and Mitchel Rosenzweig, chief financial officer of the Jewish National Fund, which provided more funding for the IBL's operations - an unaccounted-for $480,000 - than anyone else.
Goldklang chaired the meeting, together with Kurtzer. Their aim, as well as that of the IAB - which was represented by its president, Haim Katz, on the phone from Israel - was to settle the bills left behind by Baras and to persuade all parties to get behind a common effort to operate a professional league in 2008 and beyond. An angry Rosen would have none of it, saying it was the IBL's responsibility to pay the debts, not his. The meeting lasted seven hours, right through a working lunch and much dissension.
"Everyone recognized the need to resolve things quickly to have a 2008 season, but by the end of the day, there was no resolution," said one participant.
Conversations and negotiations continued with all parties for months, but neither league attracted enough investors, nor was either league sanctioned by the IAB to play baseball in Israel.
THE IBL, NEVERTHELESS, continued operating as if there would be a second season. On June 16 it announced that play would begin on July 27, five weeks behind schedule and in abbreviated form: The league would consist of a four-team, 20-game, three-week, momentum-keeping mini-season.
Moreover, the league announced that a player from last summer, Dan Rootenberg, would serve as league president; that all money owed would be paid; and that founder Baras would not be involved in day-to-day operations.
But there were no schedule, no tickets being sold, no fields that had agreed to let the league play, no advertising, no marketing campaign and no announcement of players, managers or coaches.
It appeared that the IBL was attempting to salvage at least something, in order not to be in breach of last season's agreement with the IAB requiring the IBL to run a second season. But the IAB had still not certified the league, awaiting the clearing up of debts before doing so.
The IBL was seeking new shareholders, drafting Boston businessman David Solomont to help bankroll the league and attract investors. But Solomont's prior legal problems with a software company raised many questions about the appropriateness of his appointment.
Moreover, efforts to have the untainted ex-player Rootenberg be the new face of the league blew up on July 16, when he declined to accept the position. Sources say he was lied to, and did not want to attach his name to the venture. Its credibility shot, the IBL promptly canceled the 2008 season and announced a restructuring of the league: Solomont would serve as interim president, Duquette and Gary Woolf, a Boston businessman and son of famed agent Bob Woolf, would oversee long-term development, and Baras would no longer be involved in the league, although many observers felt he was still pulling the strings behind the scenes. Solomont also said the new management had raised enough money to pay off all remaining debts, and to finance the league for at least two more seasons.
The league further announced that a seven-game series of exhibition games would be played beginning August 14; that a winter league would be created and play in the South; and that plans were moving forward for a league in 2009. Given the history of the IBL and the debts still not paid, fields not secured and certification by the IAB not yet acquired, the announcement was met with a great deal of skepticism.
"I'll believe it when I see it," said Seth Cogan, an early board member of the IBL, who dissociated himself from the league before last season began.
"I'm kind of upset, I liked how they played," said Avishai Tokayer, a nine-year-old from Beit Shemesh. "I loved going to the games and getting the balls and autographs. At least they'll have baseball in 2009."
But will they? Can the reconstituted league generate the same innocent enthusiasm the IBL built up in the two years leading to last summer's inaugural season?
"I think that a big opportunity was missed this summer by not renewing the baseball season," said Yaniv Rosenfeld-Cohen, 16, from Jerusalem, "and I'm not going to be that excited if they do in fact renew it."
"The magic," said Rosenfeld-Cohen, "just doesn't appeal so much any more."
