Great depression took toll on baseball and the Cubs
January 7, 2009 11 Comments
This morning the NY Times had a great piece on baseball during the Great Depression. There were some similarities with today and some differences too. As Ken Belson explains, baseball did not feel the impact of the 1929 stock market crash in 1930. As a matter of fact 1930 was a record attendance year for MLB. As 1931 approached the league wasn’t really concerned with the depression:
As the 1931 season dawned, Frank J. Navin, the acting American League president and the owner of the Detroit Tigers, saw no sign of the impending collapse.
“Former business depressions have not hurt baseball,” he told The Associated Press, “and I do not think the present depression will materially affect attendance this year.”
Sounds very similar to the claims that we heard earlier this fall that baseball is ‘recession proof’. I don’t have a crystal ball and cannot tell you what will happen in 2009 or 2010, but in 1931 things got really ugly:
But the hard times did arrive, and quickly. Attendance fell 16 percent in 1931, driven not just by rising unemployment but also a decision by the owners to dampen the scoring boom by changing the rules for what constituted a home run and tinkering with the composition of Spalding’s baseballs.
Ironically this was the last era when the Cubs were consistently in contention. The Cubs won pennants in 1929, 1932, 1935 & 1935. All other years they were either second or third place in the eight team National League. The attendance figures are staggering. The ’29 Pennant winning club drew 1,485,166; ’30 wasn’t much different with the Cubs drawing 1,463,624. (Amazingly enough the Cubs wouldn’t draw that many fans again at Wrigley Field until 1969). By 1931 attendance fell to 1,086,422, 2 years later the Cubs bottomed out at 594,112. Still, the Cubs were one of the fortunate teams during these times thanks in large part to their popularity, and other teams benefited:
Some weaker teams survived partly because they received a share of the gate when they played against popular teams like the Yankees, the Cubs and the Giants.
The real question today is not the impact on teams like the Cubs, they’ll get by. What happens to clubs in Pittsburgh, Kansas City, Cleveland, Cincinnati or other towns? Hopefully they’ll get by. In the Great Depression everybody did:
Remarkably, while thousands of banks collapsed during the Depression and millions of people lost their jobs, no major league baseball franchises folded or moved during the period (though at least two changed hands, including the Boston Red Sox).
So, what did teams do to survive? Well Scott Boras and the MLBPA won’t like this:
Many teams, strong and weak ones alike, kept costs down by reducing the number of coaches, or by eliminating them and employing player-managers. Owners opted for 23-man rosters, down from 25. Even the best players — Babe Ruth among them — took pay cuts. Connie Mack sold many of the stars from the pennant-winning Philadelphia Athletics teams of 1929, 1930 and 1931.
Only the two pennant-winning teams — the Chicago Cubs and the Yankees — made money in 1932. In 1933, only the New York Giants and the Philadelphia Phillies finished the season in the black.
That was a different time, and how this whole economic downturn impacts MLB is yet to be seen. Still I find it very interesting to look back at what happened the last time baseball faced grim economic realities.
Interesting read, cob. Not that I have a crystal ball, but I feel like baseball might weather this one better than the last. In 1932, revenues were almost exclusively generated by the sales of tickets and beer — it made it a workin’ man’s game, more or less. Now, you got media and the all-important cash cow of premium seats/skyboxes which make corporate sales drive a good chunk of revenues.
While I’m not about to tell you that corporate America isn’t in trouble, the guys who get the box seats on the corporate dime ain’t gonna be standing in soup lines with Jose Pacquete de Seis. Call me a cynic, but I just don’t see the yuppie fucks who pack Wrigley suffering enough to completely gut MLB revenues over the next five years or so.
Also dave, much of MLB’s revenue these days is guaranteed in contracts with TV, radio, mlb.com, and gameday or the pitchf/x (paid by Sportvision with money going to each mlb team as well).
Nobody could show up to the games and the teams are still going to bring in a sizable amount of money.
Great point MD, contracts on both sides play a major difference here. Don’t forget, the 30′s were the days of the reserve clause. So players didn’t benefit from the safety net of guaranteed long term deals. I tend to think that we will begin to see less large $ contacts to players who are at the end of their careers. The smaller teams (I don’t like to use the term ‘small market’ anymore it’s been abused by too many teams that are not in small markets) will be more willing to go young because they can control those costs. I believe the smaller teams will struggle, but many of these teams would struggle in boom times too.
MLB will survive, this is not doom and gloom it’s just going to be another challenging time in it’s history.
Not a cynic Uncle Dave, the stronger teams like the Cubs will be okay. I’d hate to be in ticket sales in a town like Detroit or Pittsburgh. I wonder though how many corporations will keep their sports tix. I guess it depends on how many can stay in business. The next thing we will see is big time revenue decreases from advertising on ballgames. A-B and MasterCard have already pulled out of advertising in the WBC (Pepsi may too). This is a crazy thing that we are watching. Consumers and corporations are not spending. If this lasts for a lengthy period of time, there will be an impact.
You know, if teams do in fact go younger, it’s going to be blamed on the economy, but it’s been in motion for a few years now. The last 5 years has seen more quality stars enter the game than any period since the 80s when such stars as Clemens, Bonds, Maddux, Glavine, and others entered the game. Teams understand the value of cost-controlled players and we’ve seen this as trading has become less valuable to teams because they either pay much of the contract of the player they’re trading or they get little in return.
I would definitely agree with that MD. Anyone who has been paying attention should have noticed that most teams have begun valuing cost-controlled players much more over the past few years.
Some of this is probably due to the incredible amount of young talent that has been entering the game lately, we’ve just seem teams get smarter over the past few years.
alright CCD, Fire Al Yellon is now up and running
enjoy
I wonder though how many corporations will keep their sports tix. I guess it depends on how many can stay in business. The next thing we will see is big time revenue decreases from advertising on ballgames. A-B and MasterCard have already pulled out of advertising in the WBC (Pepsi may too). This is a crazy thing that we are watching. Consumers and corporations are not spending. If this lasts for a lengthy period of time, there will be an impact.
Yeah, I hear you. I wonder if the WBC is failing because the WBC is failing, and not because of the economy. But I agree — if things stay as rough as they appear to be, we’ll see some reduction in corporate perk spending and a lot of empty skyboxes. Maybe we can use them as temporary housing for foreclosed families? After all, most of these parks were built with public funds…
Maybe we can use them as temporary housing for foreclosed families? After all, most of these parks were built with public funds…
I’ll send that idea to the new junior senator from illinois.
Several teams, including the Cubs, did not charge women for admission, a promotion that East Coast teams soon copied.
that’s how you do it!
the way i see it, ballclubs have three avenues — gate, gate derivatives (eg concessions), and advertising (incl broadcast) — to two client bases — individual and corporate.
baseball has tried to diversify its revenue sources, but there’s really very little it can do. since the 1930s, their big transition has been away from individual and into corporate — particularly since the invention of the skybox. that’s meant much more money, but…
… BUT i would argue that they are more vulnerable to a slump than they used to be, because corporates will cut the frills even faster than individuals.
i wouldn’t even be sanguine about broadcast revenue, honestly, as it’s all advertising money — which is being absolutely annihilated. the national deal is relatively trivial. the local broadcast is where money is, and it’s mostly derived from small business adverts. small business is more dependent on bank credit than big corporates, and (news flash) bank credit is in the shitter, forcing many small business to cut all nonvital expenses to survive. those teams who don’t own their outlets (and therefore feel the ad revenue collapse directly) will be hearing from broadcast counterparties who need to renegotiate because the economics of advertising have changed.
as to corporate attendance, i’m sure abbott keeps its skybox — but some boxes will go empty i bet. the real deal, however, is that most corporate tickets are small vendors using them as client entertainment. i suspect they will stand up even less well than individual ticket sales as client entertainment becomes a thing of legend for a while.
the scale of the depression itself may not rival the great depression (although then maybe it will…) — but i’d bet baseball actually suffers disproportionately more than it did then.
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