With the A's leaving Oakland, the Pioneer League B's want fan investment in Bay Area baseball

Paul Freedman, a 45-year-old serial entrepreneur who has founded and sold five educational technology companies, decided last June that he wanted to start a new kind of business: a baseball team.

When the MLB A's announced last year that they planned to leave Oakland, California, for Las Vegas, Freedman was dejected. Freedman, a native of neighboring Palo Alto, moved to Oakland when he was 15 after spending much of his early school years in Chicago. Arriving as a new high school student, Freedman initially struggled to make friends, so he relied on A's games — particularly the $2 Wednesdays at the Oakland Coliseum — as a regular activity to socialize with classmates.

“It helped me feel welcome,” Freedman said in an interview with CNBC. “Right field at the Coliseum made me feel part of a community again.”

Freedman has lived in Oakland for 30 years and has seen one professional sports team after another leave the city. The NBA’s Golden State Warriors left what was then Oakland’s Oracle Arena in 2019. The NFL’s Raiders relocated from Oakland to Las Vegas in 2020. And after this season, the MLB’s Oakland A’s will pack up and move to Sacramento before finally settling in Las Vegas in 2028.

Feeling discouraged about his city, Freedman texted Bryan Carmel, a friend from high school A's games, last June with a provocative introduction: “I have a crazy idea.”

Freedman began brainstorming ways to keep baseball in Oakland. That led to the birth of the Oakland Ballers, or the B’s — the Pioneer League team that debuted earlier this year, co-founded by Freedman and Carmel. The team, which is just getting off the ground with its first round of seed funding, faces an uphill battle to find a successful business model in Oakland — a city with daunting crime challenges and nearly abandoned by professional sports.

The Pioneer League, an MLB affiliate league whose teams are not affiliated with the professional teams in minor league baseball, immediately appealed to Freedman's technical sensibilities because it's a proving ground for baseball's evolution. Oakland, too, has built a reputation for groundbreaking thinking in baseball, first in the 1960s and 1970s under owner Charlie Finley and later in the “Moneyball” era of the 2000s, which ushered in an age of analytics that has been adopted across nearly all sports.

Instead of extra innings, nine-inning ties in the Pioneer League end with a five-pitch home run derby. The league allows players to challenge balls and strikes in real time using a computer-controlled system. The B's also boast the league's first female player, pitcher Kelsie Whitmore.

Now Freedman has another innovation in mind: a new investment model.

Freedman has invested $1 million in the Oakland B's and loaned the team another $5 million. Freedman and Carmel have also raised $3 million in outside financing from about 60 individual investors.

Freedman and Carmel are about to set a new valuation for their investment with the launch of a crowdfunding round of up to $1.235 million. This is the legal limit allowed under Securities and Exchange Commission regulations for an entity whose finances have been reviewed by an accountant but not formally audited.

The new round of funding will give fans direct equity in the team. While there is no market yet for team stock to one day trade and function as a true investment, Freedman and Carmel hope that it can eventually become a reality. That sets the concept apart from common stock in the publicly owned Green Bay Packers, for example, which are purposefully designed as a nonprofit.

“We're testing the waters here,” Freedman said. “There could be a dividend. There could be a secondary market. Shares come with voting rights.”

A liquid secondary market would allow for team shares to be monetized, even outside of large transactions such as the sale of a team.

DealMaker, the platform the B's use to raise money, has received interest from more than 3,500 people who have indicated they want to invest in the team, with pledges totaling nearly $8 million.

Of the hundreds of campaigns DealMaker has facilitated that are starting with early expressions of interest, this is the highest number of potential investors the platform has ever seen, said Jon Stidd, DealMaker's Chief Marketing Officer.

“It's a tribute to the fans of the B's and what they do for the community in general,” Stidd said in an interview.

The fundraising campaign is expected to officially launch in the coming days. Potential investors will be able to purchase their shares on a first-come, first-served basis, “just like you buy sneakers from the Oakland B's,” Stidd said.

Initial interest has led to inquiries from other local baseball and soccer teams also looking to raise money through DealMaker, Stidd said.

“It's a rising tide. The Oakland Ballers are getting the message out,” he said.

Freedman plans to use the crowdsourced money for general baseball activities, with a specific emphasis on marketing. In its first year, the B's sold about $1 million in merchandise, according to the team, and signed up 47 sponsors, including San Francisco's BART transit system and AAA Insurance.

In partnership with Oakland city officials, the team used $1.6 million of the team's initial funding to renovate Raimondi Field in West Oakland, a historic baseball stadium that Oakland's all-black A-26 Boilermakers played before racial integration. The field sat abandoned and fell into such disrepair that it was unusable even for Little League games, Freedman said.

Speaking at a workshop on how to keep baseball in Oakland, Freedman said he ruled out simply buying and relocating a minor league team. He feared that putting a team in Oakland would reinforce the city's reputation as a second-tier location, ill-suited to supporting major league teams.

But he'll have to make sure the B's become a feel-good story, and not a somber reminder of what Oakland once had.

“We don't think we're replacing the Oakland A's,” Freedman said. “We mourn the loss of the A's as much as anybody else.”

One of Freedman's biggest challenges is convincing locals that Raimondi Park is a fun — and safe — place to visit. Last month, The San Francisco Chronicle reported that agent Lonnie Murray, who is married to former A's star and Oakland resident Dave Stewart, recently brought players' concerns to Freedman about substandard housing in an area where players' cars were being vandalized or stolen. The B's responded by moving the team to a hotel in a safer area.

It wasn’t long ago that Raimondi Park bordered a homeless camp in West Oakland. Revitalizing the area is important to both Freedman and Oakland, but it’s also a potential roadblock to attracting fans. Raimondi Park seats about 4,100. So far, most home games have drawn about 2,000 fans — slightly below the average for Pioneer League attendance.

Even among locals, there’s a misconception about how dangerous the area is, Freedman said. He compared the neighborhood to Chicago’s Wrigleyville, where the Chicago Cubs play. Freedman said he’s developing partnerships and relationships with local businesses to promote the team and hopefully expand entertainment and dining experiences outside the stadium.

“We definitely have headwinds,” Freedman said. “Oakland hasn't gotten a lot of good press lately in terms of crime. What changes the perception is that people have safe experiences. That's what we provide.”

It's especially important to alert locals to the team's existence next season, when the A's are no more. Green Day singer Billie Joe Armstrong recently gave the team some free publicity by spray-painting a B's logo over an Oakland A's logo at Toronto's Rogers Centre.

Winning will help, too. The B’s have had an impressive first season. The Pioneer League season is 96 games long, split into two halves, and ends on Sept. 8. The top two teams from the first half and second half of the season advance to the playoffs, which begin on Sept. 10. The B’s are currently 42-30 overall and 15-9 in the second half, making them eligible for the playoffs.

“There's value in having baseball in a city,” Freedman said. “Oakland deserves to have baseball if it wants to have baseball.”