“Strong as their nine is, they have yet to see several more lost games charged to them, and if they win the pennant for 1872 we shall be greatly surprised.” Brooklyn Daily Eagle, July 15, 1872, p3
Previous earliest use (Dickson Baseball Dictionary, 3rd edition, 2009):
1ST USE. 1874. “The Bostons, who have the right to fly the pennant as champions” (The Field [London], July 11; Dean A. Sullivan).
