The Worst Trade Ever
He made the deal the day after Christmas in 1919 and his name is mud in some quarters to this day. Harry Frazee was still young, not yet 40, a theatrical agent, producer and director, at the top of his game, eyes on him after he made a small fortune on stage productions in and around Chicago, built Chicago’s Cort Theatre, moved to New York around 1910, took aim at Broadway.
In no time Frazee was printing money on Broadway, with a string of his shows—Madame Sherry, Ready Money, A Pair of Sixes, A Full House and Nothing But the Truth—becoming huge hits. The small fortune grew large. He built the ornate Longacre Theatre in Midtown Manhattan, kept it full with his own productions and those of others.
Nearly everything Frazee touched made money, a real estate company, a brokerage business. He managed a professional wrestler, dabbled in boxing promotion. He knew everybody who was anybody, not just in New York, but all over the Northeast, including Boston.
Baseball was the national pastime. With more money than he knew what to do with, Frazee made a bid in 1911 to buy a major league baseball team, the Boston Braves. When that pursuit was thwarted, he made additional overtures, showing interest in acquiring the Chicago Cubs and the New York Giants. Finally, in 1916 he was able to swing the purchase of Boston’s other big-league team, the Red Sox, but was mortgaged to the hilt to pull off the transaction.
For a brief time, it looked as though another thing Frazee touched had turned to gold, as the Red Sox won the 1918 World Series. But the Great War had disrupted the public’s appetite for amusement. The 1918 and 1919 baseball seasons had been shortened, diminishing gate receipts. Frazee’s latest Broadway production, A Good Bad Woman, tanked in the spring of 1919, opening and closing in the span of only a month. A new show, My Lady Friends, was to open by year’s end, but cash was short to bring it to the stage. His team’s best player was demanding that his salary be more than doubled.
Harry Frazee is no household name. The same cannot be said for that player who wanted the big raise. George Herman Ruth. The Babe.
Ever the wheeler-dealer, the asset-rich but cash-poor Red Sox owner sold Babe Ruth to the rival New York Yankees for $100,000—$25,000 up front, with three promissory notes for $25,000 at 6% interest due in each of the next three years—plus a $300,000 loan at 7% a year for which Frazee put up Boston’s Fenway Park as collateral.
Including interest, Yankees owner Jacob Ruppert paid Frazee $108,750 for Ruth, whose legendary exploits and the fan reaction they generated led to the Yankees amassing $3.4 million in profits over the course of the Babe’s 15 years in pinstripes. The $300,000 loan was not repaid until July of 1933, meaning Frazee’s Red Sox must have paid Ruppert something in excess of a quarter-million dollars in interest over a 13-year period. In the end it was Frazee who paid Ruppert, not the other way around, to take arguably the greatest baseball player who ever lived off his hands.
A century later The New York Times quoted an economist describing Ruth’s sale as “the greatest financial swindle since the purchase of the Louisiana Territory,” and called it a “transformational moment, not just for two baseball franchises but also for the cities they inhabited. Boston became the capital of grievance and curse; New York became the locus of power and stardom, and not just in sports.”
One hundred and five years after that great swindle, an entire nation repeated Harry Frazee’s colossal error, bewitched by performative spectacle, trusting in the art of the deal. Americans were in a foul mood, felt financially strapped, many wanted someone—or something—to blame. Looked for easy solutions to complicated problems, wanted to think we could tariff our way to revived manufacturing on our soil, wanted to believe we could deport our way to renewed prosperity. Bought into grievance and its faithful travel companion cruelty.
The biggest Harry Frazee of our time continues to wheel and deal like crazy, to no good effect. In demanding ownership of Greenland, the U.S. needlessly alienated trusted allies, eventually pushing away from the negotiating table with no more than we already had before wrecking all those relationships. For the empty promise to restore national glory, we pay an immense price. We surrender the moral high ground, diminish our standing globally, abandon any claim to leadership of the free world.
So here we sit, Americans still in a foul mood, still financially strapped, swindled for certain, bound to pay through the nose for what’s being stolen from us just as Harry Frazee was obligated to pay interest on his foolishly accumulated debt. And those payments will be only a small part of the Ruthian price we pay for what little we ever get in return.
History will judge the trade our country is making now as the worst ever. Worse even than the one Harry Frazee made the day after Christmas in 1919.