The Revenue Side
Why did the owners of baseball teams suffer losses between 1931 and 1935? Was there such a sharp decrease in demand and revenues that owners simply could not adjust their costs quickly enough to maintain or restore profits? Gate revenue was affected by the number of attendees and ticket prices. Was falling attendance the main culprit? A reduction in attendees would tend to reduce revenue, unless it was matched with an increase in ticket prices. Did ticket prices change and exacerbate the declining attendance? A reduction in ticket prices could either reduce or increase revenue, although one must be careful in identifying nominal and real (inflation-adjusted) ticket revenue. What happened to the owners’ other revenue sources?
Baseball’s attendance peaked in 1929–30. The stock market crash and eventual economic downturn did not trigger an immediate diminution in Major League attendance. The Sporting News editorialized that baseball was “such a good tonic… that it can turn the more or less depressed mind to watch its fascinations. If depressing conditions do bring about enthusiasm in baseball, perhaps that is partly the reason why the interest has been so great this year.”1 Such glad tidings proved ephemeral and baseball suffered from falling attendance during the Depression. The fall in attendance reached its nadir between 1932 and 1934.