November 11, 2019 / 5:57 PM / a month ago

Venezuelan baseball's bid to save sanctions-shortened season hits snag

CARACAS (Reuters) - The U.S. Treasury Department has told Major League Baseball that a change to its sanctions on Venezuela last week does not allow MLB to resume a partnership with the Venezuelan baseball league, according to a person familiar with the matter.

Players of Tiburones de la Guaira team, prepare before a match at University Stadium in Caracas, Venezuela November 10, 2019. REUTERS/Manaure Quintero

The Venezuelan Professional Baseball League’s (LVBP) season got off to an underwhelming start last week, with stadiums nearly empty and star players absent from the eight teams’ rosters.

MLB in August suspended a deal with its Venezuelan counterpart as it awaited word from the U.S. government on whether players’ participation was allowed under the sanctions.

Washington’s sanctions on Venezuela’s state oil company PDVSA and its ban on U.S. companies doing business with the government have not succeeded in ousting socialist President Nicolas Maduro, who has overseen an economic collapse in his oil-producing nation.

Washington accuses Maduro of rigging his re-election last year, committing graft and violating human rights. Maduro says the United States wants to dominate Venezuela’s vast oil reserves.

MLB’s decision, which prevented any major or minor league player from playing in the baseball-mad South American country during the U.S. off-season, showed how the sanctions are deterring companies from doing business even with Venezuelan entities not targeted under the measures.

The LVBP thought a solution was in sight when the Treasury Department’s Office of Foreign Assets Control (OFAC) on Nov. 5 issued a license clarifying that U.S. individuals and companies operating in Venezuela were allowed to pay taxes to the government.

“We told MLB that the November 5 license was a perfect opportunity for them to lift the suspension,” said LVBP director Giuseppe Palmisano, who met with State Department officials in Washington about the case last month. “They responded that their lawyers were reviewing the license together with OFAC.”

A person familiar with the matter, who spoke on the condition of anonymity, said OFAC informed MLB that the license “does not affect in any way” MLB’s request for guidance about the sanctions.

OFAC told MLB it was still reviewing its requests, the person said.

A Treasury spokesperson said the department does not generally comment on “specific individual communications related to license or other requests.” The State Department declined to comment.

The MLB ban was on full display last Thursday, when the Caracas Lions hosted the Navegantes de Magellanes, their rival from Venezuela’s third-largest city, Valencia.

The game is Venezuela’s equivalent of the New York Yankees playing the Boston Red Sox, but entire sections of the stadium were empty and Reuters reporters purchased tickets minutes before the game, which was impossible in past seasons.

“In the past people would have done anything to go to a Caracas-Magallanes, but today I invited a bunch of people and they told me no,” said Genesis Martinez, a 30-year-old systems engineer who came with three friends to support the Lions.

“This doesn’t even come close to what it was like in years past. There are lots of rookies. Players from the U.S. league are not playing and that has hurt the game. But I’ll still come to cheer on my team,” she said.

NO PDVSA BILLBOARDS

To demonstrate its independence from the government, the LVBP cut sponsorship ties with PDVSA, which provided the league with $12 million last season. The company’s bright red logo - prominently displayed on stadium billboards in years past - is absent this year.

While private sponsors provided more, the league cut each team’s budget and reduced the number of games to 42 from 63, Palmisano said.

Other cost-cutting measures include reducing the number of foreign players and having teams play longer series against each other to reduce travel.

“I hope we have a second chance, but in the meantime we cannot delude ourselves and we have to play with what we have,” said Luis Rodolfo Machado, president of the Zulia Eagles team, from western Venezuela.

To be sure, sanctions are far from the only problem. Venezuela’s hyperinflation has eroded salaries, meaning many baseball fans cannot spare 70,000 bolivares - roughly $3 - for a grandstand ticket.

While MLB stars like Miguel Cabrera and Wilson Ramos once played in the LVBP during the off season, in recent years only minor leaguers who need the extra money or practice have played, as rampant insecurity dissuaded wealthy players.

But Palmisano said the MLB’s stance was jeopardizing the season. Managers and players who had been lined up to participate in the season dropped out immediately after the August measure, he said.

“I understand they were acting in good faith to protect themselves, but it is not right to protect yourself by harming others,” Palmisano said.

Additional reporting by Sarah Kinosian in Caracas, Mariela Nava in Maracaibo, and Matt Spetalnick in Washington; Editing by Daniel Flynn and Dan Grebler

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