1872.12

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NA Clubs Struggle to Meet Payroll

Salience	Noteworthy
Tags	Business of BaseballBusiness of Baseball
Location	Baltimore, MDBaltimore, MD
City/State/Country:	Baltimore, MD, United States
Modern Address
Game	Base BallBase Ball
Immediacy of Report
Age of Players	AdultAdult
Holiday
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Text
Sources	Baltimore American September 7, 1872.
Warning
Comment	Richard Hershberger, "150 Years Ago Today," 9/8/2022: "The officers of the Baltimore Club are working to raise funds to carry the club over the coming winter. This speaks volumes. The Baltimores were a good team. At this point their record is 29-13-1, putting them in second place behind Boston. The quality of the product on the field is not their problem. Yet they aren't breaking even, and have to scramble to raise funds to stay afloat. I have had two great realizations about the early business of baseball. It dawned on me years ago that the later 1870s makes sense only in light of the Panic of 1873 and the depression that followed. But that is in the future. My more recent realization is that even apart from the general economy, they did not yet have a viable business model. Competition for players inevitably drove salaries up beyond the break-even point. The scramble to raise funds we see here is the rule, not the exception. This is why the churn rate was so high. Investors got tired of being tapped for more cash. Two or three years was about the limit for most clubs. The creation of "organized baseball" was all about controlling costs, by which I mostly mean player salaries. This will take a while for them to figure out. The great breakthrough will be the reserve system, but that won't come until the 1879/1880 offseason."  See also Steve Colbert comment, in Supplemental Text (Below). Edit with form to add a comment
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Submitted by	Richard Hershberger
Submission Note	FB Posting, 8/9/2022
Has Supplemental Text

1872.12 NA Clubs Struggle to Meet Payroll"

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Steve Colbert, FB Comment, 9/8/2022:

Although the salaries would be the biggest expense, the clubs also had to consider travel and room and board expenses when going on the road. So when management had to set up their schedules, they also had a challenge of the order in which their opponents would be scheduled to be most cost effective. Since much of the schedules were not defined prior to the season, that meant trying to coordinate when their opponents would be in their respective cities was another thing. This obviously was another business challenge that would grow into a more definitive role for the traveling secretary, the cost of the club traveling. One of the challenges that led to the collapse of the Kekiongas of Fort Wayne in 1871 was that very issue. Not only did the Kekionga management not pay the players on time, many times they failed to pay for the travel, room and board of the players. The believed those were the responsibility of the players even when they failed to pay their monthly salaries.