Troubled Beitar Jerusalem eyes IPO as police investigate IFA on match-fixing charges
Troubled Israeli first league team Beitar Jerusalem, notorious for the racism and militant nationalism of its supporters, is hoping to escape its dire financial straits by going to market with an Initial Public Offering (IPO).
Beitar, the storied bad boy of Israeli soccer, has started the process of raising money from investors, according to Israeli daily Ha’aretz by entering into negotiations with potential underwriters led by Migdal Capital Markets, part of Israel’s largest insurance group in the lead.
A successful IPO would not only boost Beitar’s fortunes but also those of Israeli soccer. Beitar is seeking to go public at a difficult time for the club as well as for Israeli soccer.
While Beitar is appealing an Israeli Football Association (IFA) decision to dock it two points after fans shouted racist slurs against a Nigerian-born international striker Toto Tamez during a match against Hapoel Tel Aviv and defending itself after refusing to hire an Israeli Palestinian player on racial grounds, the IFA itself is under investigation for match fixing.
IFA Chairman Avi Luzon was this week the latest Israeli soccer official to be questioned for eight hours by police as part of an on-going match-fixing probe involving fraud, breach of trust and abuse of power.
Police are seeking to establish whether referees were assigned to certain matches so as to influence their results.
"At the end of this investigation, I can promise that Israeli soccer is clean, as is the chairman of the IFA. I can say with all certainty that no referee fixed any match,” Mr. Luzon was quoted by Army Radio as saying.
Mr. Luzon, a 56-year old member of European soccer body UEFA’s executive committee, is among scores of Israeli soccer officials, players and referees to have already been interrogated by police.
Beitar, he winner of Israel’s Premier League and cup championships in 2008, is seeking to raise $25 million with its IPO to compensate for the fact that its owner, Russian billionaire Arcadi Gaydamak, has been unable to live up to his financial obligations. Mr. Gaydamak’s shares were impounded following a devastating result in a Jerusalem mayoral election and a series of financial scandals that persuaded him to leave Israel.
Mr. Gaydamak’s 2005 acquisition of Beitar was likened at the time to Roman Abramovich’s purchase of English giants Chelsea in 2004.
Hopes last year that Beitar would solve its financial problems and shed its racist image were dashed when the sale of the club to two American Jewish businessmen, one of whom is associated with Israel’s peace camp, fell through. The businessmen had vowed to change the behaviour of Beitar fans.
Beitar has the worst disciplinary record in Israel’s Premier League. Since 2005 it has faced more than 20 hearings and has received various punishments, including point deductions, fines and matches behind closed doors because of its fans’ racist behaviour.
Beitar’s matches often resemble a Middle Eastern battlefield. It’s mostly Sephardic fans of Middle Eastern and North African origin, revel in their status as the bad boys of Israeli soccer. Their dislike of Ashkenazi Jews of East European extraction rivals their disdain for Palestinians.
Supported by Israeli right wing leaders such as Prime Minister Benjamin Netanyahu, Beitar traces its roots to a revanchist Zionist youth movement. Its founding players actively resisted the pre-state British mandate authorities.
Beitar is Israel’s only leading club never to have signed an Israeli Arab player because of fan pressure.
Beitar fans shocked Israelis when they refused to observe a moment of silence for assassinated Prime Minister Yitzhak Rabin, who initiated the first peace negotiations with the Palestinians.
Its racist outbursts have prompted the Israeli Football Association to become the Middle East’s only soccer institution to launch a campaign against racism and discrimination.
The move to take Beitar public on the Tel Aviv Stock Exchange was initiated by Beitar’s general manager and former goalkeeper, Yitzhak Kornfein. Mr. Kornfein believes that the IPO will position Beitar as a profitable business.
Beitar backed out of an earlier attempt in 2000 to go public after then owner and businessman Gad Zeevi concluded that an IPO would not make the club commercially viable.
James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore and the author of the blog, The Turbulent World of Middle East Soccer.