Friday, February 26, 2016

On Being a Baseball Team Owner - the Wrong Stuff

 In his book, The New York Giants Baseball Club, James Hardy wrote that the major problem with late 19th century baseball club owners was their failure to understand that while they may have owned the club, the team really belonged to the fans.  The concept was most likely far too subtle for what were effectively a group of small businessmen who operated, if not nationwide, at least across a large area of the country.  It was, after all, their money that built the ballparks which fans paid as little as a quarter to enter, to watch players who the owners also paid.  Yet the wise magnate recognized that the cranks willingness to put down that quarter was, in fact, the final determination of the owner's success or failure, at least financially.  Unlike today's game with multiple revenue streams, 19th century owners were at the mercy of one solitary spring that could dry up quickly in the space of one drought of wins.  It was not a business for the financially faint of heart.

Cover of the Players' League Guide for the League's One and Only Season

In spite of these obvious warning signs, however, the profits of the late 1880's and the limited upfront capital outlays along with the beginning of the Players' League War, attracted people totally unsuited for club ownership.  Such owners had the potential to destroy major league baseball in a specific locale.  A case in point is the three lead owners of Brooklyn's Players' League franchise, Wendell Goodwin, Edward Linton and George Chauncey, with Goodwin and Chauncey going on to become minority owners in the team that is known to history as the Brooklyn Dodgers.  The story of the Players' League has been well told in appropriate detail by Harold Seymour, David Voigt and others so what follows is a brief summary.  The seeds of the conflict were sown during the profitable late 1880's when the owners foolishly tried to control player salaries beyond any reasonable level.  In an attempt to better their lot, the players formed the Brotherhood of Professional Baseball Players, a union led by John Montgomery Ward, a star player and, very unlikely for the time, a college graduate and attorney.

Prior to the 1889 season while Ward was out of the country on Alexander Spalding's world baseball tour, National League owners led by John Brush arbitrarily imposed a salary scale from $500 to $2500 based upon five different classifications of playing ability.  Not surprisingly the players were furious and considered boycotting the season which was about to begin.  Upon Ward's return, however, he convinced the players to honor their 1889 contracts while he worked on a radical, more permanent solution.  The result was the formation of the Players' League, which as the name implies gave the players an ownership role designed to facilitate more equitable long term treatment.  Each of the eight clubs were governed by an eight man board chosen equally by the players and those who were variously called contributors, investors and ultimately capitalists, in other words those with money to build the ballpark, hire the players and operate the ball club.

John T. Brush

Fortunately, or perhaps unfortunately in the long run, investors weren't hard to come by.  As often happens in any business, a run of profitable years highlighted the rewards and downplayed the financial risks.  The local Brooklyn club had not only won the 1889 American Association championship on the field, but at the box office as well, more than sufficient incentive for a group of investors led by the three men, none of whom had any business being in the baseball business, to invest in the formation of the Brooklyn Players' League club.  Chauncey was the only one with a baseball background, having played for the Excelsior Club at the end of that organization's baseball playing days around 1870.  His playing career now long behind him, Chauncey, reportedly a "never failing booster of Brooklyn," was a broker in his family's real estate business.  Earning his living in real estate, Chauncey had a vested interest in anything that increased or expanded the value of property in the then independent city of Brooklyn.

Unlike Chauncey who was born in Brooklyn and never left, both Linton and Goodwin were native New Englanders.  Linton's father had been the associate editor of "The Liberator," the abolitionist newspaper founded by William Lloyd Garrison.  Supposedly the younger Linton escaped from Charleston on the last boat in April of 1861, enlisted in the 11th Massachusetts and after the war founded the Unexcelled Fireworks Company in Brooklyn.  Linton's description of his company as "unexcelled," suggests he wasn't troubled by excessive modesty.  Severely injured in a fire at his factory, Linton sold the company and began developing real estate in the less than picturesquely named village of New Lots.  Absorbed into Brooklyn in 1886, the area became Brooklyn's 26th Ward with the more seemly, but geographically unhelpful name of East New York.  Supposedly in 1890, the time of the Brotherhood War, Linton "literally owned half of East New York."  Perhaps not surprisingly for a real estate developer, Linton reportedly had "no trouble promoting himself or his causes" with a reputation of being "rather contentious and difficult at times," offending someone on almost a daily basis.

One of the challenges facing Linton's development efforts was East New York's relatively remote location.  Helping overcome that obstacle beginning in 1888 was Wendell Goodwin, an executive of the Kings County Elevated Railroad which ran only one line, but "one of the most lucrative in Brooklyn," In 1891, the line carried almost 1.6 million passengers at a profit of $278,000 or about $5.5 million today.  So with lead owners who were a real estate broker, a developer of East New York and a transportation executive, could there be any doubt where their new ball park would be located?  Certainly not some place convenient to the fans, but in East New York, of course, generating more traffic for the subway line and hopefully increasing local real estate values.  Taking no chances the three new magnates not only located the park in East New York, but built it on land owned by one of their real estate companies insuring rental income from their baseball investment regardless of the profitability of the team itself.

Brooklyn Player's League Club Team Picture 

In the end the location of the team's grounds may not have made much difference in the ultimate results, at least on the field.  Both clubs were successful with Charles Byrne's team winning the National League pennant and the Players' League club coming in a respectable third under the on the field leadership of Ward himself.  At the box office, however, it was another story with both clubs losing money, a common experience in 1890 which made peace look very attractive to all concerned except the players.  Ultimately the negotiations in cities like Brooklyn with two competing clubs took the form of a club by club settlement.  Not surprisingly given the Eastern Park magnates' agenda, their major priority was for the consolidated club to play its games in East New York, so much so that they promised to put $30,000 into the new venture.  What is surprising is that Charles Byrne who had made very few bad decisions as Brooklyn president, agreed in the end to take the money and desert much more accessible south Brooklyn.  Even at more than a 100 years distance, it's a hard decision to understand.  At an National League owners meeting almost ten years later, Charles Ebbets and Ferdinand Abell cited the Eastern Park move as evidence of their willingness to put National League interests before their own.suggesting their may have been outside pressure.

Brooklyn Daily Eagle - April 4, 1893 depicting the upcoming pennant race, but perhaps also capturing the difficulty for Charles Byrne of making Eastern Park work financially

Even surrender on the ballpark issue wasn't enough for Edward Linton who got an injunction to hold up the deal until he got what he wanted - to be bought out.  Given his personality and Linton's future financial problems that was probably a blessing in disguise.  Even so, not only did Byrne make a bad decision in agreeing to go to Eastern Park, but he never realized the promised benefits as only $22,000 of the $30,000 investment was ever paid.  Furthermore, Goodwin, Chauncey and the other investors refused to put any more money into the club, understandably infuriating Ferdinand Abell who had to keep covering losses including rent payments to the minority partners real estate company. The experience may have contributed to his supposed refusal to put in additional funds during the American League war, a decade in the future which caused major problems for the Brooklyn teams of the early 20th century.  Brazenly both Goodwin and Chauncey denied that they were unwilling to cooperate, Goodwin was clearly bluffing since like Linton, he too ran into financial difficulties and had to make an assignment for the benefit of his creditors.

Ferdinand Abell - Majority Owner and Unofficial Banker of the 1890's Brooklyn Teams

The Brooklyn team finally got rid of their unhelpful partners in late 1897 when Chauncey, acting as trustee for the minority shareholders, sold the entire interest to Charles Ebbets, who only a few weeks later would become club president upon the death of Charles Byrne.  Although Chauncey doesn't seemed to have contributed much to major league baseball in Brooklyn, he and Ebbets became good friends with the former named as one of the trustees of a bequest from Ebbets' will to organize a memorial dinner on the Brooklyn magnate's birth anniversary, something Chauncey did until his own death a few years later.  Having sold his interest, the Brooklyn real estate broker could do no further damage to major league baseball in Brooklyn.  The problem with the Brooklyn Players' League owners was perhaps just as much in "their stars" as in "themselves." A few years after the Players' League war,  the Eagle wrote that Linton promoted the team, "not that he was particularly interested in the sport,but it accomplished his end."  Too many owners of that ilk would have killed major league baseball before it could be fully developed as a national business.

Thursday, February 11, 2016

"Till Lower Manhattan comes to Brooklyn"

In the Scottish play, Shakespeare uses the three witches to give the doomed Macbeth, a false sense of security by promising, among other things, that he need not worry till Birnam wood comes to Dunsinane, a physical impossibility.  Another unlikely movement of the earth's surface would be shifting the tip of lower Manhattan into the Flatbush section of Brooklyn, but what's impossible physically can take place metaphorically.  None of this, it's safe to say, was on the minds of the people who gathered at the Real Estate Exchange in lower Manhattan on May 20, 1886.  Among those present were Civil War veteran, George Bissell and his wife, Charlotte, James Quick and his wife as well as other relatives and friends of the Quick family which had deep roots in New York City.  So deep, in fact that they went all the way back to the 17th century when Manhattan was New Amsterdam, a Dutch colony before it became a British colony in 1664.  Like most of the Dutch immigrants trying to make a new life in a new world, the Quicks were involved in different commercial enterprises including real estate development at the extreme southern end of Manhattan Island. The purpose of the gathering at the real estate exchange, more than 200 years after the Quick family had arrived on these shores, was to witness the sale of two properties, all that remained of the estate of William Quick who had died more than 60 years earlier in 1823.

An early 18th century map of lower Manhattan

The properties in question were located at 473 Greenwich Street, apparently a residence, and more importantly, a commercial property at 41 Broad Street in the heart of New York's and increasingly the country's, financial district.  According to a 1914 article in the Wall Street Journal, the property on Broad Street was acquired by Jacobus Quick in 1698 and was used for a number of different commercial purposes.  The building that was on the site in 1698 lasted a long time including surviving the fire of 1835 which was important and not just from the owner's perspective.  Reportedly the fire was stopped not long before it would have reached 41 Broad which at that time was being used to store a large quantity of brandy which if it had caught fire would have made what was already a major disaster even worse.  Ironically after the surviving that cataclysmic event, just thee years later, the building at 41 Broad was destroyed in the explosion of some saltpeter stored in the building across the street. A new four story brick building was erected on the site and it was that property, along with 473 Greenwich that was about to come under the auctioneer's hammer.

Drawing of a Dutch grocery, purported in one publication to be the building at 41 Broad Street

 It may seem strange that it had taken over 60 years to sell these properties after the prior owner's death, but at least in the case of 41 Broad Street, it represented the 19th century equivalent of a pension.  At a time when sound long term investment alternatives were very rare, rent generating real estate was a relatively safe way of providing long term income.  By 1886, the four story brick building was renting for $5,000 a year, roughly the equivalent of something like $100,000 today with the income being divided among William Quick's heirs. And unlike many people, then and now, William was not only very clear about who he wanted to provide for, but also took the time to spell it out in detail in his will.  The two properties would first benefit William's widow, Sarah, who died in 1833 with the estate to then be divided equally among his four children, James, John, Maria and Joanna.  Even more specifically William's will provided that if any of his four children died without issue, that is, without children, their share reverted back to the remaining children and/or their heirs.

A map of Broad Street and area around 1914

As fate would have it, of the four, only James had children, but the details of William's will didn't stop some of the heirs from trying to subvert their father's intentions.  James Quick had died not long after his father, leaving three surviving children and their families.  Also deceased by the early 1880's were James' siblings, John and Joanna, who had, in fact, died without issue, leaving only Maria who at 81 was also childless.  For whatever reason, however, both John and Joanna used their own wills to try to leave their 1/4 interest in the properties to their surviving sister, Maria.  The net result would have been that Maria would have 75% of the income/assets for the balance of her life with only 25% going to James' heirs instead of the 75% (and at some point 100%) to which they were entitled.  Not surprisingly at least one of James Quick's heirs, not only objected, he filed a lawsuit against these clearly illegal actions as well as against his other relatives, just in case anyone else had similar ideas.  Once the matter got into the legal system in 1883, the court decided, probably with little debate, that the William Quick's original intent was clear and couldn't be changed.

What happened next isn't known, but it seems most likely the heirs decided they wanted money now rather than a share of the rental income so they agreed to have the properties sold with 41 Broad Street going for $81,000 and 473 Greenwich for $15,000 or a total of $96,000 before commissions which probably reduced the net proceeds to around $85,000.  If you've read this far and can't figure how any of this is related to Brooklyn and/or baseball, the Quick heir who instituted the law suit was one James T. Ebbets, the older brother of future Brooklyn Dodger magnate, Charles Ebbets.  Mrs. George Bissell was Charlotte Ebbets, the oldest of the Ebbets children.  Both the maternal (Dutch) and the paternal (English) lines of the Ebbets family go back literally hundreds of years in New York City. By the time of the property sale, three years after the lawsuit was resolved, Maria Quick had died so the full amount went to James Quick's three children and/or their descendants. It seems likely that the estimated net proceeds of $85,000 would have been divided equally so that the Ebbets family would have gotten about $28,000 which again would have been divided equally among the six Ebbets children so that Charlie would have received about $4,700.

Charles Ebbets about 1920

Charles Ebbets' share in the proceeds is not without significance as in October of 1920, the Brooklyn baseball magnate told Frederick Boyd Stevenson of the Brooklyn Daily Eagle that his share was the beginning of the $125,000 he had accumulated by the time he started buying the land on which Ebbets Field was built.  If the share was a little as is indicated above, it's a little hard to see how Ebbets could have come up with over $120,000 more since he certainly wasn't making that kind of money from baseball.  However much Ebbets received as his share of 41 Broad Street, he must have winced more than a little in 1903 when it sold for $200,000 more than twice the 1886 price and then for $300,000 just three years later.  But in the end, however, no matter how much or little Ebbets got out of 41 Broad Street, an historic part of old New York, or at least its financial equivalent was now part of an even more historic ballpark in Brooklyn.