Echoes Dispatches From Economic History
Babe Ruth hits a homerun in the 1932 World Series. Source: AP Images
Babe Ruth Takes a Pay Cut
The season began well enough. On opening day, 25,000 “shivering enthusiasts” gathered to watch the New York Giants, the favorite of the National League, collapse in a “humiliating defeat,” to the Philadelphia Phillies, as the New York Times put it. That afternoon, the Yankees crushed the defending champions, the Philadelphia Athletics.
But as the year wore on, it became clear that even baseball couldn’t escape the economic trials of the Great Depression.
By May, attendance figures showed a 45 percent decline from 1931, a slide accelerated by a new 10 percent federal entertainment tax on tickets. The fans who came sought cheaper seats. Unreserved and bleacher tickets accounted for 35 percent of all seats sold in 1932, versus 25 percent in 1928, historian David Surdam wrote in “The New York Yankees Cope With the Great Depression.”
After disappointing returns in 1931, the league's 16 club owners had reduced rosters to 23 players per team from 25 and cut umpires to 10 for each league from 12 , Charles Alexander wrote in “Breaking the Slump: Baseball in the Depression Era.”
Yet the owners refused to reduce ticket prices, claiming they hadn’t raised them in good times. They were also concerned that cutting players’ salaries would sap their competitiveness.
Yankees owner Jacob Ruppert Jr. had said that Babe Ruth would have to swallow a big reduction from the $80,000 salary he had earned the past two years, but the slugger’s 1932 pay only slipped to $75,000. Teammate Lou Gehrig’s salary stayed at $25,000. The only salary hike (to $7,500 from $4,000) went to pitcher Lefty Gomez to recognize his sparkling 1931 record. Overall, the Yankees' payroll shrank by only 4 percent.
The Yankees reached first place in May, then steadily increased their lead over the Philadelphia Athletics. In the National League, the Cubs lagged behind the Pittsburgh Pirates into August.
Then Cubs President Bill Veeck, frustrated with tough-guy manager Rogers Hornsby’s incessant gambling, fired him and installed popular first baseman Charlie Grimm as player-manager. Grimm promptly took the Cubs on a 14-game winning streak, captured first place and swept an early September series from the hard-charging Brooklyn Dodgers, effectively ending the race.
In the World Series, the Yankees won in four games, outscoring the Cubs 37 runs to 19. The series became an instant classic when Ruth allegedly “called his shot” in the third game during the fifth inning, with the score tied and two strikes. He waved his bat toward the outfield bleachers, then hit the next pitch almost 490 feet over the wall for a home run, putting the Yankees ahead to stay. Few remember that the next batter, Gehrig, also hit a home run.
Yankee players earned $5,011 each for winning the World Series, a sizable pay supplement for all but Ruth. When the year’s accounts closed, the team had lost $32,000 on total revenue of almost $1 million. 1933 would be much, much worse.
(Philip Scranton is a Board of Governors professor of the history of industry and technology at Rutgers University, Camden, and the editor-in-chief of Enterprise and Society. He writes "This Week in the Great Depression" for the Echoes blog. The opinions expressed are his own.)
Read more from Echoes, Bloomberg View's economic history blog.
To contact the writer of this blog post: Philip Scranton at firstname.lastname@example.org.
To contact the editor responsible for this blog post: Kirsten Salyer at email@example.com.