Harry Frazee was a New York theatrical producer who, after an unsuccessful attempt to purchase the New York Giants, bought the Boston Red Sox in 1916 from Joseph John Lannin, a real estate mogul who had made his fortune in the commodities market. The deal was a complicated one and amounted to $1,000,000 to be paid to various interested parties. Frazee had to borrow money to consummate the deal, and this led to some of his financial difficulties as the Red Sox owner.
Frazee's tenure as Red Sox owner was complicated by his relationship with Ban Johnson, President of the American League. Johnson had angered Frazee by shortening the 1918 season because of World War I and the diminished gate receipts were and additional setback to the cash-strapped Frazee. Johnson, for his part, accused Frazee of permitting known gamblers to set up shop near Fenway Park.
By 1919 the embattled Red Sox owner was barely keeping his head above water. Turnout had fallen at the baseball park during the war and attendance at Frazee's theater ventures had suffered as well. Selling off some of his interests in these Broadway productions helped to pay off only a small part of his loan, and Frazee began to turn to his talented baseball players as a source of income. During the next four years, catcher Wally Schang, infielders Joe Dugan and Everett Scott and pitchers Carl Mays, Sam Jones, Herb Pennock, George Pipgras, Waite Hoyt and Joe Bush would soon all be traded - usually for cash with some mostly 2nd tier replacements added as part of the deal.
The most infamous transaction, of course, was the sale of Babe Ruth to the Yankees in early 1920 for a record-setting $100,000. The deal was sweetened by a $300,000 loan from Yankee owner Jacob Ruppert. This only brought the beleaguered Red Sox owner temporary relief, as Lannin and other lenders were becoming impatient with the pace of Frazee's debt payments. Lannin sued for ownership of Fenway Park as collateral and, in the ensuing court settlement, Frazee had to pay Lannin $265,000. The revenue from the Babe Ruth deal and Ruppert's loan were used to meet this obligation.
Contrary to popular legend, the financial records make it clear that Harry Frazee did not sell Babe Ruth to the Yankees to finance No, No, Nanette, but rather to meet his debt obligations to previous owner, Joseph Lannin. His sale of the Red Sox in 1923 for $ 1,150,000 is the more likely source of the Broadway musical's successful Broadway debut in 1925.
It must also be mentioned that Babe Ruth's playing days with the Red Sox were not the happiest of relationships. He was often drunk and unruly and had abandoned the team on more than one occasion. Additionally, as his fame as a home run hitter began to grow, he no longer wanted to pitch and he became involved in various schemes such as becoming a prizefighter or an actor. Lastly, his demands for a 100% salary increase in 1919 probably pushed Frazee over the edge, as he had been more than generous with his temperamental star during his tenure as Red Sox owner.