March 29, 2023

Dealing With a Decade Of Depression

November 21, 2022 by · 1 Comment 

Shibe Park 1929

Shibe Park circa 1929 (Associated Press)

Given the economic storm warnings that have been posted of late, I can’t help but wonder how they will affect the Good Ship Major League Baseball. It’s not as though we haven’t had economic ups and downs before, but now, depending on your financial guru, we are on the verge of…a cyclical downturn, Great Depression II, or a total financial collapse. Optimists are as rare as triple plays.

During the 1930’s, all 16 teams defied the odds and survived the Great Depression. One wonders if all 30 teams today would be so fortunate. It’s one thing for a struggling franchise to move to greener pastures, and something else entirely for a franchise to give up the ghost – but I wouldn’t say it’s unimaginable (in 2001 former Commissioner Bud Selig “imagined” the possibility when he suggested contracting the number of franchises from 30 to 28). Given a hefty line of credit or a comfortable cash cushion, an MLB team owner can flout the law of supply and demand for a while, but eventually, he will sing a different tune, namely, “I Fought the Law and the Law Won.”

The baseball model of supply and demand can be crudely calculated as follows:  multiply the number of seats available at a team’s ballpark by 81, and you have the supply. Count the attendance for the season and you have the demand. The inventory (i.e., the tickets) has a notoriously short shelf life. The game date on your ticket is similar to the “sell by” date on foodstuffs – only worse. An unused ticket is worthless the day after the game is played. Packaged food that has passed its “sell by” date may end up on the clearance rack or at a salvage store to garner some modest revenue. Even yesterday’s newspaper is worth more than yesterday’s baseball ticket (a notable exception would be a game of some historic importance, in which case the ticket becomes a collectible).

The same principle applies to broadcast revenue. Viewership can be counted (or at least estimated) just like live attendance. Again, the supply is finite (162 games) and the demand is elastic, dependent on the fortunes of the team. Since a team in decline usually leads to a decline in ratings, the result is a decline in revenue, as teams base their advertising rates on the size of the audience they can deliver.

Typically, demand for MLB is greater when the product is better (i.e., a winning team), but during a financial downturn, when people are either out of work or afraid of losing their jobs, discretionary spending dwindles, even if the Mudville 9 is crushing the opposition. At least that’s the way it played out during the Great Depression.

1939 MLB BroadcastIn the 1930s, team revenue was all but synonymous with ticket sales. TV was in the future and radio was still viewed with some suspicion (1939 was the first year that all MLB teams broadcast their games). Fewer ticket sales also meant less concession revenue. With less money coming in, there was less money to pay the players. Salary cuts were inevitable.

From 1910 to 1919, no team eclipsed the 1,000,000 mark in attendance. In fact, no team came close; the best showing was in 1917 when the White Sox drew 684,521 to Comiskey Park. The next decade, however, was one of great expansion. The old wooden firetrap ballparks were gone. The last of the breed was Robison Field, vacated by the Cardinals during the 1920 season. More capacious steel and concrete structures, what we today call classic ballparks, were the norm and attendance was on the rise. Total MLB attendance for the 1920’s was 92,799,454, way up from 54,219,025 from 1910 to 1919.

In the American League, Babe Ruth – an individual slugger who out-homered entire teams – was the driving factor. Obviously, New York was the primary receptor for the Ruthian box office growth hormone. 1,289,422 paid their way into the Polo Grounds to see the Bambino’s record-setting (54 HR) season in 1920. The Yankees surpassed 1,000,000 in 1921 and 1922 when they won the AL pennant. After moving to Yankee Stadium in 1923, the team continued to draw 1,000,000+ in 1923 and 1924. 1925 was an off-year for the team (they finished in 7th place) and the Babe’s HR total shrank to 25, thanks to his belly-ache.  The million-plus mark was eclipsed again from 1926 to 1928, but dipped to 960,148 in 1929 when the A’s won the AL pennant by 18 games.

This is not to say that other teams were left in the dust. In 1924 the Tigers drew 1,015,136. The Cubs were the next team to breach 1,000,000 with 1,159,168 in 1927. They followed this up with 1,143,170 in 1928 and 1,485,166 in 1929. That 1929 figure was the best attendance for any team during the 1920s. The Cubs’ last game of 1929 (an 8-3 loss to the Pirates) was played on October 6, just 23 days before the stock market crash on Black Tuesday.

So far as a player’s income was concerned, the ups and downs of the stock market were much less important than his on-field performance. Most players had to work off-season jobs to make ends meet. Highly remunerated stars had the income to dabble in the stock market. Notably, Ty Cobb had grown wealthy from his investments in Coca-Cola and General Motors. Consequently, he had a great deal of leverage when it came time to talk contract with the Tigers. He was one of a select few who could live comfortably without a paycheck.

Unlike most of their players, team owners had the wherewithal to invest heavily in stocks. Of course, if you lived by the stock market in the 20’s, you died by the stock market in the 30’s. Branch Rickey, though he was the highest paid man in baseball in 1936 with an annual salary of $49,470, had seen his net worth plummet after the crash. If nothing else, the Great Depression was democratic; it affected all levels of society.

In 1930, the first full year of the Depression, it was business as usual in major league baseball. Hey, this Depression thing might just be temporary, right?  In the meantime, let’s go to the ballpark. Indeed, the 1930 season was a notable one, featuring record offense across the board, and the fans responded to the tune of 10,132,262, an improvement over 9,588,183 in 1929. The Dodgers, Cubs, and Giants all surpassed 1,000,000.

By 1931, the Depression had settled in. The Cubs were the sole team over 1,000,000 but only by 86,422. This was a drop-off of almost half a million in two seasons. The A’s dominated the AL with 107 victories but drew only 627,464 fans. At the bottom of the pack were the Browns, who drew a mere 179,126 in 1931, even though they had finished in 5th place, not a bad showing by their standards.

In 1932 Wrigley Field was packed (more than 49,000) for game three (the called shot game) and game four of the World Series, but the first two games at Yankee Stadium were well under capacity at 41,459 and 50,709. During the regular season, no team drew 1,000,000. The Cubs were tops with 974,688. The Yanks were the best of show in the AL with 962,320. Nevertheless, there were a lot of empty seats in the South Bronx in those days. The Yanks had 65 openings (they played 12 home double-headers) at 62,000 seats per opening. Of the roughly 4,000,000 seats available during the season, they sold less than 25% of their inventory. And this was a team that won 108 games!

In 1933, total attendance for MLB was 6,089,031, lower than any total reached in the 1920s, and the lowest since the war-shortened season of 1918, when just 3,080,126 watched major league ball. The first All-Star game, played in 1933 at Comiskey Park, was ostensibly part of Chicago’s centennial and World’s Fair. It was also an attempt to re-ignite interest in baseball during the nadir of the Depression. Total MLB attendance for the 1930s sank to 82,987,475, a decline of almost 10,000,000 from the 1920s.

The attendance drop-off was evident in the 1933 World Series. The Polo Grounds, home of the pennant-winning Giants, held 55,000 people, yet game one was played before 46,672, and game two before 35,461. Griffith Stadium, home of the AL pennant-winning Senators, was a much smaller facility, yet for games 3-5, the 32,000-seat facility hosted crowds of 25,727, 26,762, and 28,454.

In 1933, Commissioner Kenesaw Mountain Landis announced he was taking a pay cut from $65,000 to $40,000 to set an example for players, who were also suffering financial setbacks (though precious few were close to his salary range).

Though the Yankees eclipsed the 1,000,000 mark only in 1930, they did not fall off the table the rest of the decade. As a result, they led all of MLB for the decade with 9,089,953. The Cubs were right behind them with 8,791,668. On the field, this was one of the best decades in Cubs history, as they were above .500 every year, finished in the first division every year, and won pennants in 1932, 1935 and 1938.

The Giants were in third place for the decade with 7,516,744. They won three pennants during the decade (1933, 1936, and 1937), thus keeping the Yankees from monopolizing baseball fever in Gotham. (If you’re wondering, the Dodgers drew 6,594,663, which included one pennant in 1939.)

Right behind the Giants were the Tigers at 7,339,785. In fact, after 1932, the Tigers were the only team to reach 1,000,000 fans in a season: 1,034,929 in 1935 and 1,072,276 in 1937. Given the fact that new car sales were hardly robust in those years, it is amazing that so many people in the Motor City had enough money for baseball tickets. But the Tigers won pennants in 1934 and 1935, and finished second in 1936 and 1937, thus bolstering demand.

St. Louis was a curious case. The Cardinals won the pennant in 1930 and drew 508,501. The second-place Cubs, the third-place Giants, and the fourth-place Dodgers, all drew more fans B and by wide margins: Giants, 868,714; Dodgers, 1,097,329; and Cubs, 1,463,624.

Well, a team usually gets an uptick in attendance after a pennant year, and the same was true of the Cardinals in 1931. They drew 608,535 and rewarded the Mound City faithful with another pennant. Again, the Dodgers, Giants, and Cubs drew more fans, though not so many as in 1930.

By 1934, the Cardinals and Browns announced they would no longer broadcast games, since they figured radio was cutting into attendance. Hard to believe, given the enthusiasm for baseball in St. Louis today, but in 1934, the year of the famed World Series champion Gashouse Gang, they drew a mere 325,056 to Sportsman’s Park. Even harder to believe was the St. Louis unemployment rate, estimated at 35%. Given that grim statistic, the Cards would have had trouble pulling fans if they had gone 154-0 and Dizzy Dean had won 40 games.

The Cardinals’ failure to draw fans cannot be blamed on competition with the Browns, who had the worst attendance in MLB for the 1930s. A mere 1,393,827 paying customers showed up to see the Brownies for the entire decade. Of course, there was not much to see during the decade; nothing but sub-.500 baseball, including six seasons in 7th or 8th place. The low point was 1935 when a 65-87 Browns team finished 7th and drew just 80,922. This was the lowest season attendance for any team in modern MLB history.

Small wonder that the Browns were on the verge of moving to Los Angeles on the eve of World War II. How they managed to stay afloat in St. Louis is a minor miracle, but one factor in their favor was that they owned Sportsman=s Park and collected rent from the Cardinals.

Perhaps the most unusual MLB story of the Depression was that of the Cleveland Indians. The Indians won no pennants but they had a respectable decade at the box office. They never finished lower than 5th place (1936), but never higher than 3rd (1934, 1935, 1938, 1939); they were above .500 every year but one (75-76 in 1933). Yet their attendance for the decade was 6,488,810, a very respectable total for the 1930s. But there were unusual circumstances in Cleveland.

Max Schmeling

Max Schmeling

To a large degree, the total can be attributed to the opening of Municipal Stadium (or Cleveland Stadium or Lakefront Stadium as it was known during the 1930s). Miraculously (especially given the winter weather in Cleveland), the gargantuan (78,811 capacity) structure took just more than a year to build, from the June 24, 1930 groundbreaking to the first event, a heavyweight championship bout between Max Schmeling and Young Stribling on July 3, 1931. The construction cost was $2,844,000. It might seem like an unwise enterprise during the Depression, but Cleveland voters had signed off on the deal a year before the stock market crash.

While the Indians were the most obvious tenants for the facility (the Cleveland Browns football team was not founded till 1946), they had no lease when the stadium opened, so they continued to play at ancient (1891) League Park on the east side while Municipal Stadium hosted an assortment of other activities, such as track and field competition, a Shriners convention, and sandlot baseball.

Eventually, a lease agreement was worked out. On Saturday, July 30, 1932, an Indians-A’s match-up at League Park drew an estimated 5,000 people. The next day, the same match-up at the debut of the new stadium drew 80,184 (an MLB record at the time). The game itself was something of an afterthought, but the result was an Indians’ loss, a 1-0 four-hitter authored by Lefty Grove. The next game, a Monday afternoon contest against the A’s (another 1-0 four-hitter, this time by Rube Walberg), drew just 12,000.

The Indians played at the new stadium full-time until the end of the 1933 season. By that time, the novelty factor had worn off and attendance for the season was just 387,936. The overhead for the new stadium was way too much for such modest attendance, so the Indians went back to League Park for 1934 and 1935, though the 1935 All-Star Game was played at Municipal Stadium. Starting in 1936, the Indians played at League Park during the weekdays and at Lakefront Stadium during the weekends and holidays.

Of course, teams with depressed won-loss records to go with the economic depression had the most wretched attendance. A case in point was the Philadelphia Phillies, who finished in 7th or 8th place eight times during the decade. Only in 1932 did they finish above .500 and just barely at 78-76. As a result, their attendance (mostly at decrepit Baker Bowl, as they did not move to Shibe Park till the middle of the 1938 season) for the decade totaled just 2,290,639.

By any standard you choose, the Depression hit MLB hard. Of course, if you have no money, you can’t buy a ticket to a ballgame. If you have only a little bit of money and have to choose between bread and circuses, then you opt for the former. Yet that was the situation for all teams, no matter what their won-loss records.

Though all 16 teams survived the Depression, some of them just barely made it. The Reds went bankrupt after their 58-94 1933 season. No telling what would have happened if the bank hadn’t persuaded a local mogul, the multi-faceted Powell Crosley, to buy the team.

After the 1935 season, the Boston Braves (38-115) went bankrupt, though the league eventually found buyers (renaming the team the Bees was an attempt to re-brand the team).

Pondering the depressed attendance and salaries of the 1930s, one has to wonder if it could happen again. How bad would things have to get today before we see a comparable downturn?  I’m not sure we want an answer to that question, but let’s put on a brave face and do our best.

One way of getting more bang for the buck is to go the player-manager route. Player-managers were popular in the 1930’s, as it was more economical to pay a man doing two jobs slightly more than a man doing one job, but less than two men doing two jobs.

There are no player-managers today. In fact, there hasn’t been one since 1986 when Pete Rose helmed the Reds while pursuing Ty Cobb’s all-time hits record.

In the 1930’s their ranks included Jim Bottomley (Browns, 1937), Mickey Cochrane (Tigers, 1934-1937), Leo Durocher (Dodgers, 1939), Frankie Frisch (Cardinals, 1933-1937), Bucky Harris (Tigers, 1931), Rogers Hornsby (Cubs, 1930-1932; Browns, 1933-1937), Bill Terry (Giants, 1932-1936), and Pie Traynor (1934-1937), all of whom were enshrined in the Hall of Fame.

Unlike the 1930’s, baseball in the 2020’s is not coming off record attendance years. Baseball had had 30 teams since 1998, when 70,601,147 – a record at the time – paid their way into major league ballparks. The total fluctuated in subsequent years till 2007, when 79,484,718 – which remains the all-time record – turned out. Then a downward trend began, perhaps due to the Great Recession. From 2009 through 2017, attendance varied within a range of 73,061,763 (2010) to 74,027,037 (2013).

In 2019, the last season before COVID, the attendance dipped below 70,000 (68,506,896) for the first time since 2003. 2020, of course, was a washout, and in 2021 only 45,304,109 people showed up, perhaps understandably, given lingering COVID fears. Arguably back to normal in 2022, 64,556,678 fans showed up. That is roughly 15,000,000 below the record year of 2007. This downward trend was evident before COVID and the current economic woes. If the economy strikes out at the dawn of the 2023 season, how low can we go?

Thanks to overlapping seasons, other professional sports are competing for fans’ discretionary income. Of course, more televised sports makes it easier – and cheaper – to watch sports at home. Teams can always increase ticket prices to hype the revenue stream, but in an economic downturn that would only depress attendance even more. Ultimately, such a policy could bring back the COVID days of cardboard cutouts in the stands. More likely, teams would cut costs before they would go that far.

When the one-year contract was standard in the 30’s, it was easy to shrink the team payroll during the Depression. The reserve clause bound the player to the team so if he didn’t like his contract he could lump it. Sure, he could quit and find another job. But where?  Minor league teams and leagues were folding. The want ads weren’t exactly blooming with non-baseball jobs either. And playing major league ball, albeit with a lesser paycheck, was still a high-status job. So players signed for whatever they could get.

With multi-year contracts today, it would be difficult to pay players if a sharp drop in revenue occurred, and just as difficult to convince them to rework their contracts. What would the players’ union say?  One wonders if some teams would have to file for bankruptcy just to restructure their obligations. Or would all of MLB do the same?  More than likely, economic uncertainty would sound the death knell for new long-term contracts, and the one-year deal would again be the norm.

For sure, it would be extremely difficult to persuade taxpayers to pony up for new whiz-bang ballparks. Even make-overs of existing parks would be a suspect use of funds. Any expenditures beyond repairs would be highly unlikely. But given an era of lower expectations, complaints would likely be few.

One area ripe for cost-cutting is coaching. Today the average number of coaches for major league teams is in double-digits. The Giants, Twins and the Guardians have 16.  The Marlins and the Braves list 14 coaches on their web site. Even the lowly A’s have 12. Surprisingly, the Dodgers (11) and the Yankees (10), two teams that can afford all the coaches they want, are relatively conservative.

During the Depression, most teams made do with two coaches. I have to believe that the number of coaching positions would dwindle in a severe economic downturn. By contrast the number of players on the active roster has varied only slightly, from 24 to 26. It is not out of the question that rosters could shrink to, say, 23, which is not unusual in independent minor league teams. The most likely cuts would be the number of pitchers. With fewer arms in the bullpen, starting pitchers might have to pitch deep into games again.

Another area ripe for cost-cutting is personnel who do not don the team uniform. In the 1930’s year-round front office personnel were few in number. Most old-time team owners were depicted as tightwads. Buy a team yearbook today and count the head shots of all the employees, or go to a team web site and count the vice-presidents, advisors, coordinators, analysts, and software engineers, and all their associates. Bureaucracy rules.  But when it comes to trimming the fat, the deepest cuts would likely be in front office personnel. In all of baseball history, no fan has ever bought a ticket to watch the support staff strut their stuff.

If the bottom drops out of the economy, most of us will have more important things to worry about than baseball. We could survive (and people in the past have survived) without baseball or any other spectator sport. Still, it is difficult to imagine America without the Dodgers…the Yankees…the Cardinals…

As George Orwell might have put it, “If you want a vision of the future, imagine a vacant major league ballpark – forever.”  Just one big perpetual off-season. But in the event of a total economic meltdown, a lot of legacy institutions could disappear. A lot of small businesses went under during COVID; follow that up with Depression 2.0 and some big businesses might bite the dust.

One of my favorite sayings is:

God always forgives

Man sometimes forgives

Nature never forgives

Swap economics for nature and you have a pretty good idea what we – and MLB – are up against.

Guess that’s why Thomas Carlyle dubbed economics the dismal science.


One Response to “Dealing With a Decade Of Depression”
  1. Dirk Durstein says:

    No competent financial advisor currently expects anything more than a “cyclical downturn” or at worst a recession. I have not heard one legitimate economist projecting “Depression 2.0” or a “total economic collapse”. There are simply no parallels to 1929. Unemployment is less than 4%, inflation is now diminishing from 7%, growth continues strong. The economy has been buffeted by external factors like the pandemic and the war in Ukraine. The key economic indicators remain quite robust.

    That said, I appreciated the tour of major league baseball during the Depression. Well done. One aspect not mentioned is how devastating the 1930’s were for Negro League baseball, which collapsed completely. The teams and leagues had smaller markets and thus little margin for error. Disadvantaged people of color could not afford baseball games.

    The greater threat to baseball today is not the national economy, but the ruinous inflation of baseball salaries and ticket prices. The average cost of attending a game today is approaching $100 per fan, when ticket, parking , concessions are figured in. Taking a whole family is a costly luxury. I don’t see how baseball can sustain its own top-heavy economic system, where the rich teams get richer, the poor teams can’t compete, and the fan is the loser.

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