Why you should care
He was a legend in his own time, and he knew that gave him a certain amount of power.
After leading big-league baseball in home runs for the seventh time in his career in 1926, George Herman “Babe” Ruth Jr. and his agent leaked a rumor to the media that he would retire from baseball to open a chain of gymnasiums. According to a release in The New York Times, this venture would also include a correspondence course on how to stay physically fit and play baseball. At just 31, Ruth had yet to have his historic 60 home run season, in 1927.
Luckily for the annals of baseball, it was a bluff. Ruth had been offered $52,000 per year (the equivalent of $750,762 in modern dollars) to keep playing for the New York Yankees the following season. But he wanted more, so he told them he was quitting.
You might think baseball’s most famous player, then in the prime of his career, would have a better strategy. But the MLB reserve clause meant a team retained the rights to a player even when their contract was up, meaning Ruth couldn’t just sign with any other team even after finishing the three-year, $156,000 stint he’d signed for with the Yankees. He couldn’t threaten to go to another team, so, in a tactic Ruth would return to again and again throughout his career, he threatened to retire.
Baseball economist Michael Haupert’s estimate found that of the $3.4 million profit the Yankees earned while Ruth was on the team, about 37 percent can be attributed to his popularity.
“At other times he would say, ‘Oh, maybe I’ll become a boxer,’ or, ‘Oh, maybe I’ll become a full-time actor,’” says Jane Leavy, the author of a recent Babe Ruth biography, The Big Fella. “There was no other leverage other than to say, ‘I’m not gonna play for that money. I have options. I can do something else now.’”
While Ruth’s threats did appear to help spark a few contract negotiations throughout his career, they didn’t consistently get him what he wanted, and they certainly never got him paid what he deserved. When Leavy asked revered agent Scott Boras what Ruth would be worth today, Boras said he’d argue for somewhere in the ballpark of $60 million to $90 million annually. In large part this was not only due to Ruth’s statistical value on the diamond but also to his ability to put butts in seats. According to Leavy, he was the first athlete to also be looked at as an entertainer and this paid off big-time for the Yankees, a team which had never turned a profit prior to acquiring Ruth. Baseball economist Michael Haupert’s estimate found that of the $3.4 million profit the Yankees earned while Ruth was on the team, about 37 percent can be attributed to his popularity.
It appears Ruth first started his stunts while with the Boston Red Sox, during a disagreement with his manager at the time, Ed Barrow, in July 1918. Ruth threatened to join the Chester Ship of Chester, Pennsylvania, which played in the Delaware River Shipbuilding League. Before the Red Sox could file an injunction to stop it, one of Ruth’s Boston teammates talked him into joining the team and the club went on to win the World Series.
Following that season, Ruth said he wouldn’t play for less than $10,000 a year for a three-year contract (or $15,000 for a one-year contract), but he ultimately signed for $27,000 over three years. Yet, after the 1919 season, he still wasn’t satisfied and held out again. This time, he was traded to the Yankees, who renegotiated his contract and gave him a deal that made him tied with Ty Cobb and Tris Speaker for the highest-paid player in big-league baseball, with $20,000 a year. By the 1922 season, Ruth stood alone as the highest-paid player in baseball, a streak that lasted for 13 seasons.
Throughout Ruth’s professional career, he was aided by Christy Walsh, who is often regarded as the first baseball sports agent. Walsh helped Ruth make almost as much off the field as he did on it. Yet Ruth never made as much as Walsh led the press to believe. For instance, likely as a Yankee contract negotiation tactic in 1926, Walsh leaked that Ruth was making $100,000 for a 12-week vaudeville tour. In actuality, Ruth made $18,640.97 from vaudeville that year. Still an incredible sum in that day and age, but nowhere near the reported six-figure payday.
The most Ruth made in any season was $80,000 — a figure that would have tied Willie Mays for the highest baseball salary almost 30 years later. Baseball players, on the whole, weren’t compensated well until the reserve clause finally fell in 1975. That was the start of free agency and the beginning of an open market for players. The highest-paid player now, Washington Nationals pitcher Stephen Strasburg, makes $38.3 million.
Not all major professional athletes have the power that MLB players have today. The NFL does offer large contracts to its players, but those often come with caveats that make players uneasy. “There are $80 million contracts [in the NFL], except if they get injured or cut,” Leavy says. “Basically, it’s a question of whether the money is guaranteed and for how long. And so the amounts of money sound far more imposing than they often are.”
Some, like New York Jets running back Le’Veon Bell, fight Ruth-style to get what they feel they deserve, especially in a game that’s as dangerous as football. But Bell went further than Ruth ever did, sitting out the entirety of the 2018 NFL season with the Pittsburgh Steelers. Eventually, Bell did get slightly more money — though he didn’t get paid for last season.
Maybe, if Ruth had done the same, his threats would have been taken more seriously and athletes to come would have been better off for it.