The Royals have a lot of financial flexibility going forward
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The Royals have lost 63 percent of their games over the last three seasons as they have tried to get a look at younger players, but there are rumblings that the Royals are done with rebuilding and are looking to win now. The Royals improved to 26-34 last year, and have an impressive collection of pitching prospects coming up. But if they really want to start seriously contending, they will need to add some talent from outside the organization in the next few seasons.
Fortunately, the Royals will be in a good position financially to take on new players. The club has just over $36 million in contractual obligations for next year for three players - Danny Duffy ($15.5 million), Salvador Perez ($14.2 million), and Whit Merrifield ($6.75 million).
In addition to those players, the Royals will have 11 players eligible for arbitration for the first time. With the shortened season, it is unclear how those salaries will be determined, since they are typically based on counting stats. MLB Trade Rumors estimated arbitration salaries using three different models to account for the shortened season. It seems like evaluating 2020 statistics on a pro-rata basis would making the most sense, so let’s use that model. Here’s an estimate on what next year’s player payroll looks like right now, using those arbitration estimates.
*-All numbers from Cot’s Contracts and MLB Trade Rumors. Figures in italics are estimates.
Montgomery, McCarthy, and Sparkman are all candidates to be non-tendered, and the Royals could save nearly $3 million by letting them all walk. But the Royals are currently projected to have a payroll under $80 million, less than the $89 million they were projected for Opening Day 2020 before salaries were pro-rated for the shortened season. If they are looking to keep spending at current levels, that may mean they continue to shop for bargain free agents, but if new owner John Sherman wants to warm up to Royals fans, he could look for bigger impact players.
What is really interesting is the Royals have virtually no commitments beyond this year. Danny Duffy, Salvador Perez, Jorge Soler, Maikel Franco, Mike Montgomery, and Jesse Hahn will all be eligible for free agency after next season, making Whit Merrifield the only Royals player under contract for 2022 - and his salary actually goes down, to $2.75 million, before he has a $6.5 million option in 2023 with a $750k buyout.
The Royals will still have plenty of arbitration cases for 2022 - Hunter Dozier, Brad Keller, and Adalberto Mondesi will be due substantial raises, Jakob Junis and Franchy Cordero could each make a few million, and Scott Barlow, Ryan O’Hearn, and Cam Gallagher will be eligible for arbitration for the first time. But even accounting those players, the Royals are likely to have commitments in 2022 of less than $35 million, giving them a tremendous amount of payroll flexibility. Bringing back Perez and Duffy could be on the agenda, as well as potentially bringing back Soler, and the Royals could even make a splash in that year’s free agent class.
Hanging over everything, of course, is the pandemic. Owners took a financial hit this year, but having a large ownership group in Kansas City may have spared anyone from taking a large loss on themselves. There is still a great deal of uncertainty as to how many fans will be able to attend games in 2021, and how many games baseball will even schedule. Uncertainty tends to cause teams to be financially conservative, so it could be a quiet winter.
The Royals can say the rebuild is over and it is time to win, but actions will speak louder than words. Spending money to acquire players isn’t a necessary component of winning - the Rays won the pennant this year with a payroll lower than the Royals. But investing in players would send a message to fans that the organization is not going to be continue to settle for losing seasons.