Economics of Professional Baseball During the Great Depression

From Wikipedia, the free encyclopedia
Jump to: navigation, search

Professional baseball remains one of the United States’ most popular forms of sports entertainment; duly, it resonates as a widely successful economic venture. Like all professional sports organizations, however, the viability of professional baseball is dependent upon the consumers – the fans of each team – in that entirely all the revenue stems from the fans in the forms of ticket and merchandise sales, advertisements, television rights fees, etc. Notwithstanding, due to baseball being a form of entertainment, demand is elastic. Sports entertainment is not a necessity and relies on a relatively large disposable income in order to be consumed. During the Great Depression, the effects of unemployment, lower wages, and an overall decrease in the standard of living played a key role in negatively affecting the economic stability and profitability of “America’s pastime.”

The most notable impact of the Great Depression on professional baseball was the significant decline in attendance. During the worst years of the depression (1930–1934), baseball saw a 40% decrease in attendance, despite the price of single-game ticket remaining at 50 cents.[1] Americans simply could not afford the luxury of enjoying a game and were forced to allocate their money for more essential amenities.

Due to the decrease in attendance, professional clubs had to cut costs because they could no longer maintain the same level of expenses. Player salaries were among the first parts of the budget to be cut. During the depression, players salaries decreased by an average of 25%.[2] Nevertheless, the average salary of a professional baseball player ranged between $6000 and $7000… far more than the average income of an American during the same time period ($1,368).[3][4] Additionally, teams tried to decrease expenditures by reducing the number of coaches, as well as by cutting the roster size from 25 to 23.[5] Revenue had decreased, and in order for organizations to still earn a profit, total costs also needed to decrease. This was easier said than done, though, as many professional teams sustained financial losses for several years during the depression.

Considering the aforementioned circumstances, ingenuity was key for clubs looking to increase ticket sales and raise revenue. Surprisingly, the increases in entrepreneurial efforts during the Great Depression directly impacted the way Americans enjoy the game today. The introduction of night-games in 1935 by the Cincinnati Reds not only spurred an increase in ticket sales, but also provided a new and dynamic atmosphere to the game which proved popular with the fans.[6] Similarly, baseball teams began to broadcast their games on the radio in an effort to both cater to the current fan base and to potentially attract new fans to the game. The radio broadcast were met with high praise and became a staple in American sports entertainment in addition to contributing to an increase in ticket sales.[7] These efforts, combined with the eventual end of the depression, ultimately led to the resurgence of professional baseball on the national scale.

References[edit]

External links[edit]