The Postwar Yankees: Baseball's Golden Age Revisited

6. Where Is Robin Hood When You Need Him?

One potential remedy for the American League doldrums during the 1950s was revenue sharing, in the form of gate sharing between teams. Revenue sharing was not new then—it had been around since the inception of professional baseball. The practice was sometimes controversial , however, given different teams’ ability to draw fans at home and away, among other things. Revenue-sharing agreements began informally but have remained a fixture of Major League Baseball. During recent years the issue has come under scrutiny again within Major League Baseball. The Report of the Independent Members of the Commissioner’s Blue Ribbon Panel on Baseball Economics revisited the topic in 2000 and suggested increasing the amount of revenue sharing, among other changes. Committee members made their recommendations in the hope of increasing the competitive balance within Major League Baseball.1 The committee described the current status of Major League Baseball as being a world divided into the “haves,” such as the Atlanta Braves, Chicago Cubs, the Los Angeles clubs, and New York Yankees, and the “have-nots,” such as the Minnesota Twins, Montreal Expos, Oakland A’s, and Pittsburgh Pirates. Shortly after the report’s release, the Twins and A’s won their divisions. The Expos, however, remained as baseball ’s charity case and are now, since 2005, the Washington Nationals. Where Is Robin Hood When You Need Him? Revenue Sharing in the American League 6 164 t Where Is Robin Hood When You Need Him? Because the New York Yankees had won three consecutive World Series, the committee members were concerned about the apparently growing competitive imbalance, which they feared could weaken Major League Baseball. In a sense the committee’s description echoed those of congressional hearings convened almost fifty years earlier, in 1951 and 1957. During those hearings legislators and some of the witnesses had cited the Yankees’ dominance of the American League as being potentially detrimental. According to data supplied at the congressional hearings and shown in table 6.1, the Yankees sometimes had 3.5 times as much total revenue (gate, concession, and broadcasting revenues) as the Washington Senators (see appendix).2 The data presented at the investigations was not typically made public, and the baseball researcher is frustrated by the limited number of years for which data was provided. These data are useful in examining how revenue sharing based on gate receipts worked in the past. The 1950s were a period of anticommunist hysteria in the United States, but that bastion of Americana, Major League Baseball, was in fact practicing a limited form of communal sharing. How well did the policy work? The American League had a revenue-sharing program during the postwar era, but it failed to create even a semblance of revenue parity. Ironically, in 1956 the plan transferred similar amounts of revenue to the Indians, Senators . . . and Yankees, despite those teams’ vastly different fortunes on the field and on the ledgers. Debates about revenue sharing continue today, with new proposals being offered, some of them quite similar to measures undertaken in the past. Thus, besides the historical interest in considering the experiences of the American League during the 1950s, such an examination might provide some clues about the possible effectiveness of current approaches to reducing revenue disparities among Major League teams. A Brief History of Revenue Sharing in Major League Baseball Baseball historian Harold Seymour claimed in 1971 that the revenuesharing rules in early professional baseball leagues arose from informal Where Is Robin Hood When You Need Him? t 165 agreements made between team owners: “Appreciating the results of inequality of markets, the owners tried to compensate by sharing gate receipts, giving 50 percent of the base admission price to visiting teams. Anything above that, taken in through the sale of seats that cost more than the base price, was kept by the home team as an incentive to improve its stands by adding more box and reserved seats.”3 His argument echoed testimony made during the 1951 congressional hearings.4 Early clubs arranged games and agreed to split the gate. The earliest overtly professional team, the Cincinnati Red Stockings, played almost all of its games on the road. Harry Wright, the manager of the team, negotiated the gate-sharing arrangements with captains of other teams. Because the Red Stockings were a superior team that drew well, Wright was able to get either a relatively large guarantee or a fairly high percentage of the...