March 18, 1937 - Gehrig ends holdout and accepts 36K

[Redskins Rick]

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[TD]1937[/TD]

[TD]Ending his holdout, Lou Gehrig, who had originally asked for $50,000, agrees to sign with the Yankees for $36,000 and a $750 signing bonus. The new deal for Bronx Bombers' first baseman, last season's American League MVP, makes him baseball?s highest paid player.[/TD]

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They talk about today's players making too much money compared to the working man.I can picture my grandfather, a blue collar guy, ranting about a guy getting 36K a year, and having the nerve to ask for 50K.For prospective, the average median family income for 1936 was $1,160.Today according to the consensus, the Maryland average is $70,482.

[Redskins Rick]

Mods,

Typo in Title Line, please correct, thanks

[Frobby]

[TABLE]

<tbody>[TR]

[TD]1937[/TD]

[TD]Ending his holdout, Lou Gehrig, who had originally asked for $50,000, agrees to sign with the Yankees for $36,000 and a $750 signing bonus. The new deal for Bronx Bombers' first baseman, last season's American League MVP, makes him baseball?s highest paid player.[/TD]

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They talk about today's players making too much money compared to the working man.I can picture my grandfather, a blue collar guy, ranting about a guy getting 36K a year, and having the nerve to ask for 50K.For prospective, the average median family income for 1936 was $1,160.Today according to the consensus, the Maryland average is $70,482.

Yep, same as it ever was. However, Gehrig's salary was "only" about 33 times the median family income, whereas a guy making $20 mm now (not even the very highest salary) is earning about 285 times the median family income, according to your figures. It's good to be a great baseball player!

[Redskins Rick]

Yep, same as it ever was. However, Gehrig's salary was "only" about 33 times the median family income, whereas a guy making $20 mm now (not even the very highest salary) is earning about 285 times the median family income, according to your figures. It's good to be a great baseball player!

Yeah, good to be a great ball player.

No TV revenue in those days.

For comparison sake, Spencer Tracy was best actor and making about $1,500 a week, and had to wait until 1941 to sign a new contract and jump to $5,000 per week.

I guess in those days, more people went to the movies.

[Frobby]

Yeah, good to be a great ball player.

No TV revenue in those days.

For comparison sake, Spencer Tracy was best actor and making about $1,500 a week, and had to wait until 1941 to sign a new contract and jump to $5,000 per week.

I guess in those days, more people went to the movies.

Or, the film industry didn't have an antitrust exemption and the reserve clause. Baseball's antitrust exemption remains, but without the reserve clause they really can't reign in salaries like they used to.

[skanar]

Adjusted for inflation (CPI), $38,000 in 1937 is about $620,000 in today's dollars.

Anybody know what the total baseball revenue was in 1937? Or the mean per-team revenue?

Today, Clayton Kershaw is being paid 0.4% of all the money made by baseball, and 12% of the average per-team revenue.

[Redskins Rick]

Adjusted for inflation (CPI), $38,000 in 1937 is about $620,000 in today's dollars.

Anybody know what the total baseball revenue was in 1937? Or the mean per-team revenue?

Today, Clayton Kershaw is being paid 0.4% of all the money made by baseball, and 12% of the average per-team revenue.

http://features.blogs.fortune.cnn.com/2013/06/02/big-league-baseball-fortune-1937/

Of what he pays out, the largest amount goes into players' salaries. For all sixteen clubs, salaries this year are reported to be in excess of $3,200,000--roughly half of total operating expenses. Individual payrolls differ considerably: the Yankees, probably baseball's highest-priced team and including baseball's currently highest-paid player (Lou Gehrig, $36,000), will cost this season around $370,000; the Pirates, by no means baseball's lowest-priced team, will cost around $200,000.

For a breakdown of annual expenses, the Cubs for 1936 offer a good example of a higher-bracket club. Omitting concessions, plant depreciation, and reconstruction costs, and omitting any expenses in buying players, total operating costs came to $644,000. Of this $74,000 went into fixed charges, such as taxes and rent; $177,000 went into supplies, equipment, spring training, traveling expenses, and publicity. The remaining $393,000 went into direct labor of all kinds, that is, ground crews, ushers, and office force as well as players. Office force absorbed just $33,000; Wrigley himself draws no salary as President.

As for profit and loss, they run a fairly extensive gamut. Over the two-year period 1933-34, the Cubs lost $430,000; over the two-year 1935-36, they made $198,000.

[skanar]

http://features.blogs.fortune.cnn.com/2013/06/02/big-league-baseball-fortune-1937/

Of what he pays out, the largest amount goes into players' salaries. For all sixteen clubs, salaries this year are reported to be in excess of $3,200,000--roughly half of total operating expenses. Individual payrolls differ considerably: the Yankees, probably baseball's highest-priced team and including baseball's currently highest-paid player (Lou Gehrig, $36,000), will cost this season around $370,000; the Pirates, by no means baseball's lowest-priced team, will cost around $200,000.

For a breakdown of annual expenses, the Cubs for 1936 offer a good example of a higher-bracket club. Omitting concessions, plant depreciation, and reconstruction costs, and omitting any expenses in buying players, total operating costs came to $644,000. Of this $74,000 went into fixed charges, such as taxes and rent; $177,000 went into supplies, equipment, spring training, traveling expenses, and publicity. The remaining $393,000 went into direct labor of all kinds, that is, ground crews, ushers, and office force as well as players. Office force absorbed just $33,000; Wrigley himself draws no salary as President.

As for profit and loss, they run a fairly extensive gamut. Over the two-year period 1933-34, the Cubs lost $430,000; over the two-year 1935-36, they made $198,000.

Fascinating! So if we assume that the owners made 0 profit (revenue = operating expenses), Gehrig was being paid about 0.6% of total revenue and 9.5% of the mean per-team revenue. Which is, actually, not that far off from Kershaw!

With a 10% profit, those numbers go down to 0.5% and 8.6%, respectively.