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BUSINESS WOES On money matters, a chip off old block
By Scott Bernard Nelson, Globe Staff, 7/21/2002
The self-proclaimed protector of the Splendid Splinter's legacy has left an unhappy legacy of his own over the past decade: bankruptcies, lawsuits, tax liens, and grumbling business associates. The younger Williams has been associated with more than a dozen ventures since graduating in 1991 from the University of Maine, eight of which folded quickly. Several of the companies ended up in litigation. ''John-Henry sets up entities, they last for finite periods of time. Then they dissolve once the creditors start coming after him,'' said Louis Muggeo, a Salem attorney suing the younger Williams for breach of contract in a dispute over sports memorabilia created and sold by several of Williams's firms in the mid-1990s. ''He moves things around between the entities, so you have to find them all and then try to sort out what went where.'' A call to Williams asking about the companies was forwarded to a lawyer who represents him in business-related cases, but who didn't want his name used. The lawyer conceded that Williams may not be a good businessman, but said his business record isn't as tortured as the records suggest. In some cases, he said, Williams was protecting a corporate name to use later and in other cases he opened firms with similar-sounding names in different states to avoid paying fees for doing business across borders. Whatever Williams's motive, corporate records on file in Massachusetts and Florida shed light on a tangled lineage of businesses he started and abandoned over the years. The first venture materialized while Williams was still a student, when he joined Nicholas Tamposi - son of former Red Sox part-owner and New Hampshire real estate developer Sam Tamposi - in a company called Legacy of a Legend Inc. The records aren't clear, but Legacy of a Legend appears to have been created to develop and sell T-shirts and other products commemorating the 50th anniversary of Ted Williams's magical 1941 season, when he became the last big leaguer to hit over .400. John-Henry graduated in 1991 and Legacy of a Legend closed up shop after that season ended. But the experience evidently gave him an inkling of what he planned to do for a living - virtually all of John-Henry's enterprises in the years since have involved Ted Williams memorabilia. After a short-lived effort to play semipro baseball and an even shorter stab at an acting career, John-Henry came back to Boston and began frequenting memorabilia shows and auctions. Over a period of 22 months, he founded three companies to market and sell all things Ted. In the process, he rubbed many collectibles dealers the wrong way by moving aggressively to eliminate from the market bats, balls, and pictures with Ted Williams autographs that he asserted were forgeries. The reason for all the acrimony, according to critics, was that John-Henry addressed the forgery situation by claiming everything that didn't go through one of his companies was a fake. ''The first time I ever laid eyes on John-Henry was in 1991 when I had an auction at the Kowloon Restaurant in Saugus,'' said Phil Castinetti, owner of the Sportsworld memorabilia store in Everett. ''He came strolling in and tried to hold up the auction, saying an item I had wasn't real. I told him his father had done a show in Boston only a few months before and had signed it right in front of me, so he sat down and the auction went on. He did that kind of thing to a lot of people.'' A pattern that begins to emerge over time, in fact, is one of John-Henry attempting to buy or bully his way into position as the clearinghouse for any products or licenses related to his father's career. It's a pattern that led him, in the spring of 2002, to file a lawsuit against his own sister, Claudia, for attempting to sell 1,845 autographed bats she owned to an Arizona memorabilia dealer. He thought the bats should stay in the family. ''The caring [between John-Henry and Ted] became an entitlement, and John-Henry used it to cross the line,'' said Brian O'Connor, a former Polaroid Corp. executive who, at Ted's request, tried to help John-Henry sort out his business affairs in 1996 and 1997. ''He really became Ted in the memorabilia sense.'' In 1993, though, John-Henry was still focused on the Ted Williams Store, which he opened at the Atrium Mall in Chestnut Hill. An employee for one of his businesses at the time said the store underscored just how tone-deaf John-Henry was when it came to business. He put the store in a quiet, suburban ''chick mall,'' as the employee called it, far from the Fenway Park neighborhood where it would have generated more foot traffic in one weekend of home games than it would get in its lifetime at the mall. ''He's a tough cookie to work for, and he doesn't take any advice,'' said the employee, who didn't want his name used. ''He does what he does, that's all. As far as he's concerned, he's John-Henry Williams and he doesn't need any help.'' Williams continued running at least two of the memorabilia companies at the same time as the store, and that's where he found himself embroiled in his first legal difficulties. Marblehead sports agent Lane Foreman signed an agreement to allow basketball stars Larry Bird and Charles Barkley to appear on trading cards, autographed balls, and pictures created and distributed by Williams's Grand Slam Marketing. In a legal filing, Foreman said his agreement with Williams entitled him to 5 percent of the gross profit of any of the products that included Bird's or Barkley's image - but that John-Henry had never paid him a dime. Muggeo, now representing Foreman, said Williams farmed the products out to other companies he was affiliated with and had them produce and distribute the cards. Then, since Foreman's contract was only with Grand Slam Marketing, he could claim that particular firm had no gross profits to share. ''Apparently, he was selling a ton of cards and making money,'' Muggeo said. ''He just didn't want to honor his commitment.'' That case still hasn't been heard by a judge. Just as the dispute was developing in 1994, though, in Florida, Ted Williams had a second stroke, which numbed his left side and left him temporarily blind. To look after his father's interests, John-Henry left the store, gave up his apartment on Beacon Street in Boston, hired a staff of health aides to care for Ted, and spent $145,000 to buy a home in nearby Lecanto, Fla. Within a few months, he incorporated a Florida company under the name Grand Slam Sports, presumably to continue the memorabilia business started by Grand Slam Marketing in Massachusetts. His involvement in another set of companies set up at the time remains murky, though. Ted Williams Family Enterprises Ltd. had been founded in Massachusetts in 1993, and Ted Williams Family Enterprises Ltd. Inc. was founded in Florida shortly after John-Henry moved to the state. John-Henry was not listed as a founder of either organization, but he was clearly involved. His one-time fiancee, Anita Lovely, is listed on Florida incorporation papers as the firm's secretary, and John-Henry's accountant, Sean Murphy of Franklin, is listed as an officer of the firms in both states. John-Henry also filed a trademark application May 14 to keep anyone from using his father's name on baseball gear, baseball instructional courses or videos, and baseball camps without paying royalties to Ted Williams Family Enterprises. He signed the application as firm president. Still, the most confusing period of the younger Williams's business career followed immediately thereafter, as he took increasing control over his father's life at the same time as he started more ventures. By the end of 1997, he was involved in some capacity in nine companies, including Hitter Inc., which he tried to build at least partially by using money from his other firms. When Hitter Inc. ultimately filed for bankruptcy last year, it listed John-Henry's Green Diamond Sports as a creditor. He had taken slightly more than $20,000 from Green Diamond and transferred it to Hitter Inc. He also reported that he had put more than $1 million of his own money into the bankrupt firm before it folded. Whatever the relationship between Williams's companies - and he isn't giving interviews to explain it - it's an open question whether any of them ever did anything but lose money. According to Hitter Inc.'s bankruptcy petition, it lost $2.5 million in 2000, more than the firm brought in from sales. Expenses, in other words, were more than twice revenues. Over the past several years, the Internal Revenue Service put more than $230,000 in tax liens on Hitter and Green Diamond Sports. Those were eventually paid, but federal tax officials have had a $91,094 lien against John-Henry's personal residence for more than two years that is still open. An IRS official wouldn't comment on any individual case, but said it's possible that he is making payments or has reached some other agreement short of paying his back taxes in full. Last year, another company also sued Williams for failing to pay more than $120,000 for leased equipment. And SunTrust Bank sued him for defaulting on a $570,000 loan for Hitter and failing to pay back more than $9,000 in credit card debt. The one business venture that appears to be a success came through Eric Abel, Williams's lawyer. Four Abel family members, along with John-Henry and another Florida man, are listed as founders of a company called Southern Hardwoods Inc. The firm operated a sawmill and wood import business in Pensacola, Fla., and only existed for a year before selling in May 1999 to a New York-based timber company. O'Connor said there's a reason most of John-Henry's businesses don't end profitably. When disputes with partners or customers inevitably arise, O'Connor said, John-Henry ''accelerates it from his end. He thinks he's getting screwed, so he tries to wrong the other person back - only double.'' It's no coincidence, O'Connor said, that ''all his business relationships are short-lived.''
This story ran on page A26 of the Boston Globe on 7/21/2002.
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ed Sox legend Ted Williams may have been one of the best players in the history of professional baseball, but those who knew him say the Hall of Famer was frequently out of his league when it came to financial decisions. That much, at least, John-Henry Williams seems to have inherited from his famous father.