Why on Earth Did Boston Sell Babe Ruth to the Yankees? - The New York Times

Ruppert saw the future in the trajectory of Ruth’s record-breaking 28th home run, an epochal clout that he hit against the Yankees; it sailed over the roof of the Polo Grounds’ right field grandstand, coming to ground among weeds in an adjacent lot. No doubt The Times’saccount would have caught Ruppert’s attention if only for its unaccustomed hyperbole: “Ruth stood firmly on his sturdy legs, like the Colossus of Rhodes, and, taking a mighty swing at the second ball pitched to him, catapulted the pill for a new altitude and distance record.”

Ruth had scrapped and squabbled all season with Ed Barrow, the Red Sox manager. Barrow had resisted moving Ruth to the outfield, and then resented Ruth’s refusal to pitch when needed, which was hardly Ruth’s only act of insubordination. But when Frazee informed him of the sale, Barrow replied: “I thought as much. I felt it in my bones. But you ought to know you’re making a mistake.”

The full dimension of the error would not become clear until long after Ruth was done wreaking havoc on baseballs. In 2000, the economist Michael Haupert discovered the Yankee accounting books and ledgers from Ruppert’s ownership languishing in unopened boxes at the Hall of Fame. A professor of economics at the University of Wisconsin-La Crosse, Haupert has since become the go-to guy on the economic underpinnings of the Evil Empire.

Frazee received a record sum of $100,000 for Ruth — not $125,000 as reported in The Times and The News — to be paid in four $25,000 installments, the first in cash, and three promissory notes at 6 percent interest due every subsequent November. But Frazee never actually received the full purchase price. He was so hard up for cash, he sold the notes at discount — to Huston’s bank.

On those terms alone, the sale would have been historic; the price was twice the record amount paid for Eddie Collins five years earlier. What made it “the greatest financial swindle since the purchase of the Louisiana Territory,” Haupert said, was Ruppert’s willingness to gamble $300,000 of his own money in the form of a personal loan to Harry Frazee, who in return put up Fenway Park as collateral.

“Ruppert paid $108,750 with interest,” Haupert said. “Frazee borrowed $300,000 at 7 percent a year, or $21,000 annually. After five years, he had paid more than $115,000 in interest out of his own pocket. And Ruppert had the deed for Fenway! He was a genius and Frazee was desperate. Bottom line: The Red Sox actually paid the Yankees to take Babe Ruth.”

What’s more: Ruppert got Frazee to pay half of the raise Ruth had demanded when, as an inducement, the Yankees promised to double his salary on the two remaining years of his Red Sox contract. Miller Huggins, who had been dispatched to California to woo the Big Fella, delivered the sweet news of fiscal suasion.

Source: The New York Times

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