Bob Feller, Ace Negotiator

On a warm July day in 1935, Cy Slapnicka, Cleveland Indians superscout, ambled across an Iowa wheat field to chat with sixteen-year-old Robert Feller, the phenom pitcher from tiny Van Meter, Iowa. Later that fall, Slapnicka returned and acquired the signatures of Robert and Bill, his father (since Robert was a minor), on a Cleveland contract calling for a $500 salary. Feller was to report to the Indians’ Class D farm team in Fargo-Moorhead the following summer. He never made it there, because his contract was transferred to New Orleans before the season began. He never made it to New Orleans either. Instead, he was called to Cleveland in June after resting a sore arm through the spring. He worked out for the Indians before they arranged to have him sign with the Rosenblums, a Cleveland semipro team, for a couple of starts. He made his debut against major-league hitters during an exhibition contest against the St. Louis Cardinals on July 6. Two weeks later, after one more outing with the Rosenblums, he arrived in the majors to stay.

The deal that brought Feller to Cleveland was one of the most lopsided interstate transfers in baseball, if not economic, history. Ohio got a future Hall of Farner, Iowa got one dollar and an autographed Cleveland Indians team baseball, Feller’s signing bonus. Feller would go on to become the best pitcher of his generation and one of the greatest of all time. After a career spanning eighteen seasons, interrupted for nearly four years for military service, he retired in 1956 with 266 wins, 2,581 strikeouts, 3 no-hitters, 12 one-hitters, and the single-season strikeout record. He was elected to the Hall of Fame in his first year of eligibility in 1962 and in 1969 was voted the greatest living right-handed pitcher.

In his prime, Feller was regarded as one of the best pitchers in the game, and he was compensated as such. From 1946 to 1948, three of the most dominant seasons of his career, Feller reigned as the highest-paid player in the game. When he earned $82,500 in 1948, he became the highest-paid player in the history of baseball. His earnings eclipsed Babe Ruth’s record $80,000 salary for 1931. Feller quickly relinquished the salary crown the following year, 1949, when Joe DiMaggio became the first $100,000 man in MLB history (figure 1).

Even during his best years, Bob Feller never drew the highest base salary in the league (figure 2). Yet, a shrewd negotiator, he parlayed his success and drawing power into some of the most lucrative contracts in baseball history at the time. He used the knowledge that he was a crowd favorite to negotiate a series of bonus clauses that would pay him more than $160,000 over his career, amounting to 25 percent of his total earnings from the Indians. Except for his first bonus clause, they were exclusively based on attendance.

Feller’s third season in the majors, 1938, was the first for which he negotiated a bonus clause in his contract. He was coming off two seasons that, while producing only a 14-10 record, did see him average more than a strikeout an inning and post ERAs more than a full run below the league average each year. It had not taken long for Feller to establish himself as a crowd favorite and a menace to opposing hitters. That year he had a performance clause in his contract that would have paid him $1,000 for each win over 20 and $2,500 each for reaching 15 and 20 wins. However, he had attendance clauses that same year, and the performance clause kicked in only if an attendance clause did not, so he did not earn anything extra for winning 17 games. He did, however, pocket $5,000 for the attendance clauses, which paid him $2,500 each for attendance of 500,000 and 550,000.

 

 

Beginning in 1938, his attendance clauses were regular, appearing each full season he played through 1949. The last three years, the attendance clause specified adult paid admissions instead of total admission (tables 1 and 2). Without access to the actual financial records of the team, it is impossible to determine the composition of the attendance, only the total. In 1947 the Indians drew 1,521,978 fans. Feller received bonuses of $7,500 for each 100,000 adult admissions from 750,000 through 1,050,000 and $5,000 for each of the next 100,000 up to 1,250,000. In order for him to earn the full complement of bonus money, 82 percent of the attendance would have to be made up of adult admissions. Similar figures for 1948 and 1949 would be 76 percent and 89 percent, respectively. Without more detailed information, we can only speculate as to whether he earned his bonuses in each of these years. The figures in table 3 assume that he did.

 

In addition to his shrewd bargaining for bonus clauses, he earned income off the field as well, endorsing popsicles, Wheaties, and sporting goods; authoring his autobiography at the ripe old age of twenty-eight; licensing his name and likeness for comic books and baseball-bat pens; and collecting appearance fees. He participated in offseason barnstorming tours beginning in 1936 and organized his own in 1946, 1947, and 1949. The 1946 tour was a huge financial success, netting him a reported $80,000, which more than made up for the money he lost on each of his next two barnstorming tours. In some years he earned nearly as much through these ancillary earnings as he did from the Cleveland Indians.

 

 

Feller revealed his negotiating strategy in a Sport magazine interview in 1947. He credited his success to careful research, claiming that he kept close track of the club’s finances and then estimated his contribution to team revenues, using that as a base for his contract negotiations. He did not reveal how he kept track of club finances, but the results can hardly be disputed.

His financial acumen was often a source of interest to the media. In several interviews over the course of his career, his salary, bonus clauses, negotiating skills, and offseason financial dealings were mentioned. The press dutifully reported salary and bonus-clause figures fed to them by Feller and Indians ownership, especially Bill Veeck, but seldom had accurate information. In most cases the figures they reported were inflated values of what Feller was actually paid (in base salary), actually earned, or could potentially earn through his bonus clauses. It is no surprise that Veeck would seek to generate publicity from the news that Feller was set to become the first $100,000-a-year ballplayer or that his 1947 salary would catapult him ahead of Babe Ruth for the all-time highest salary in MLB history. Neither claim turned out to be true. In his best year, Feller was paid $82,500 by the Indians, and he did not surpass Ruth until 1948, and then it was on the basis of bonus clauses, not base salary.       

The only year that Rapid Robert was unable to turn over a bonus clause was 1939, the tail end of the Great Depression. His salary declined from $22,500 in 1938 to $20,000 in 1939 because attendance dropped from 652,006 to 563,926, and his attendance clause did not kick in until 600,000. In 1938 he had padded his salary by $5,000 with attendance bonuses and had a chance to earn as much in bonuses in 1939 if the team drew more than 700,000. The failure of the Indians to draw well was certainly not Feller’s fault. He won 24 games, the first of five consecutive (full) seasons he would win 20 or more (leading the league in wins each of those years). His 24 victories accounted for 28 percent of Cleveland’s total of 87. The problem was the lackluster performance of the Tribe on days when Feller was not pitching. Their 87 wins got them no closer than third place, a distant 20. games behind the pennant-winning Yankees. The 13 percent decrease in Cleveland attendance was far greater than the 0.3 percent league average decrease, further evidence that it was not a nationwide lack of interest in baseball that choked off the crowds in Cleveland.

From 1938 through 1949, Feller cashed in on more than two dozen separate attendance bonus clauses in his contracts. During his peak earning years, 1946-49, Feller earned more in bonus incentives alone than the average Hall of Farner earned from salary and bonuses combined.

Feller did not have an immediate impact on Cleveland’s annual attendance. For the first three years of his career, it rose slightly, almost exactly in line with the American League average. It spiked in 1940 before falling back to the American League average through both the slump brought about by the Second World War and then the gradual rise through 1946. At this point, while Feller entered the best years of his career and Cleveland’s fortunes rose with him, the Indians’ attendance grew rapidly, outstripping the American League average, increasing by nearly half a million fans from 1946 to 1947 and rising by another million the next year, during a lull in the growth of the average attendance of the other American League teams. Even as Cleveland’s attendance began a decline from 1949 through 1953, it remained above the league average. After a brief uptick in 1954 it continued its decline, until it fell below the league average in 1956 to a level nearly one-third its 1948 peak (figure 4). Feller’s salary was tied to attendance only through the 1949 season. It is not likely that Feller foresaw a decline in attendance and opted out of bonus clauses in anticipation of such, because he actually took a base-salary cut from $40,000 to $37,500 in 1950.

 

 

Coming off a 15-win season in 1949, his lowest full season total since 1937, he took a salary cut of nearly 50 percent. In 1950 his base salary was reduced by only $2,500, but his long series of attendance bonuses ended, costing him thousands more. Had his 1950 contract had the same bonus clauses as his 1949 contract, he would have earned an additional $20,000. The reality was that the team believed his best days were behind him at age thirty-one. After the 1949 season, his salary glided downward with the fortunes of the team for the rest of his career, with one slight jump in 1952, the result of an outstanding 1951 season that saw him lead the American League in wins, with 22, and reach the 20-win plateau for the sixth, and final, time in his career. That proved to be the last great year of his career, and his sinking salary reflected his decreasing value to the team. Even the team’s record-setting 111-win season (up to then, 111 was the most wins by an American League club, and the winning percentage, .721, remains an American League record) in 1954, aided by a solid season from Feller, did not break his salary slide. Cleveland rewarded his 13-3 record and 3.09 ERA (more than half a run below the league average) with another salary cut, the third of four consecutive salary decreases.

As lucrative as the bonus clauses proved to be to Feller, it still remains to be seen whether his negotiating strategy was sound. While he repeatedly earned his attendance bonuses, would he have done better to forgo the bonuses and take a straight salary? In economics parlance, this is known as an opportunity cost. What could Feller have been expected to earn in base salary if he had not instead negotiated bonus clauses? It is not possible to know exactly what salary he could have earned, but we can estimate it by comparing his career salary progression to that of his Hall of Fame peers. Feller negotiated two parts to his salary each year from 1938 through 1949 (except for 1942-45, when he was serving in the navy instead of serving up fastballs). The first part was a base salary; the second was a series of bonus clauses based on attendance. In order to estimate his earnings had he bargained for a straight salary instead of a wage plus bonus, I assumed that his wage would have risen by the average of other Hall of Fame pitchers in his cohort instead of at the rate it actually did.

It turns out that Feller made the right decision. Depending on which assumption we make as to his salary growth, he earned between $70,000 and $140,000 more in his career as a result of choosing bonus clauses over guaranteed salary amounts. His actual career earnings were $657,675, so he likely earned between 12 percent and 27 percent more over his career as a result of his bonus clauses. While he fell a bit short in 1938 and 1939, he more than made up for it with the rest of his bonus clauses. In his peak bonus earning years he made nearly twice what he would likely have earned on a straight salary contract.

I estimated salaries for Bob Feller by looking at the average growth rates of the salaries of Hall of Fame players by years of experience. In order to do this, I gathered the available salary data for every Hall of Farner whose career overlapped Bob Feller’s by at least five years. The resulting pool included fifty-nine players whose careers spanned the years 1918 to 1977. In order to avoid inflation issues, I omitted from that sample all players whose career started before 1934 or ended after 1963. I then divided this group into pitchers and hitters, giving me three different sets of players (pitchers, hitters, and both combined) whose salary progress I could use to estimate Feller’s salary. I looked at all three samples and chose to focus on only the one that would have resulted in the highest opportunity cost for Feller. That group was made up of the pitchers whose careers most closely lined up with Feller. Even when biasing the results upward in this way, it still turns out that Feller made the right decision. The group of pitchers included Hal Newhouser (1939-55), Early Wynn (1939-63), Bob Lemon (1941-58), and Warren Spahn (1942-65).

I looked at each of these pitchers’ salaries by years of experience and calculated the average rate of growth of salary for each year of experience. I then took those growth rates and estimated Bob Feller’s salary for each of those years that he had a bonus clause and estimated what his salary would have been had it grown at the same rate as the average Hall of Fame pitcher during those years. This is the line labeled “estimated” in figure 3.

 

 

In his critical third though tenth years of experience, Feller’s salary had a lower growth rate than average in five of the eight years. In those years when his growth rate was higher, it was barely so (18.2 to 14.4, 37.5 to 31.0 and O to -9.2) but it was far below the average every other year, falling between one-quarter and one-tenth the average growth rate. The estimated salary assumes that Feller would have seen his base salary grow at the rate the average pitcher saw his salary grow each year. Had he done this, he would have been worse off than having negotiated the lower base growth and the bonus clause. I consider the estimated growth only during the bonus clause years, sticking with the actual growth during the years without bonus clauses. When calculated this way, Feller outearned the estimated salary by more than $70,000 over the eight-year period, or nearly $10,000 per year more from bonus clauses than he might reasonably have been expected to earn in straight salary.

One of the frequent laments of older players is that they never had the opportunity to earn the outrageous salaries that players earn today. Free agency and billion-dollar television packages have certainly changed the salary landscape. If Bob Feller were active today, what kind of salary could he have earned? Using the Bill James similarity index, the most similar active player to Bob Feller is Randy Johnson, who has a career similar in length to Feller. If Feller earned salaries on a par with Johnson (not including bonus earnings) he would have earned approximately $165 million over a hypothetical twenty-year career today. If we eliminate seasons 7-10, the equivalent seasons that Feller missed for military service, Johnson earned $145 million. Even after Feller’s salary is adjusted for inflation, his earnings totaled a relatively modest $6.4 million and change.

 

 

Table 4 carries the Johnson-Feller comparison one step farther by looking at how they were compensated for their performance. The table adjusts all salaries for inflation and then calculates how much each pitcher was paid per inning pitched, wins, and strikeouts. It is no surprise, but certainly illuminating, to see how much better compensated was the Big Unit than Rapid Robert. In their second seasons, Feller was paid more per win (in inflation-adjusted dollars) than Randy Johnson, but that quickly changed. Feller’s highest salary per win was a bit more than $39,000, a figure that Johnson has exceeded in eighteen of the twenty years of his career, peaking at a salary of $2.7 million per win in 2003. Comparisons of price per inning pitched and per strikeout yield similar results.

Bob Feller was a strikeout artist, a hero of World War II, and a master negotiator. He may have come cheap to the Indians in the beginning, but he clearly extracted his pound of flesh as his career wore on. The available evidence suggests that he earned just about as much as he possibly could have during his career. But what about that autographed baseball? Today, on the open market, it might fetch about $100. It still turns out to be a pretty good deal for the Indians, and for Bob Feller as well.

 

SOURCES

Laird, A. W. Ranking Baseball’s Elite. Jefferson, N.C.: McFarland, 1990.

Mansch, Larry. “Hitting Bob Feller,” The National Pastime 17 (1997): 125-27.

Marshall, William. Baseball’s Pivotal Era, 1945-1951. Lexington: University Press of Kentucky, 1999.

McCaffrey, Eugene V., and Roger A. McCaffrey. Players’ Choice. New York: Facts on File, 1987.

Sickels, John. Bob Feller: Ace of the Greatest Generation. Washington, D.C.: Brassey’s, 2004.