Kansas City Royals designated hitter Billy Butler (16) Mandatory Credit: Denny Medley-USA TODAY Sports

Kansas City Royals Raise Payroll $10 Million Despite $6.5 Million Loss In 2013


 

Kansas City Royals starting pitcher James Shields (33) Mandatory Credit: Joe Camporeale-USA TODAY Sports

 

Last year, the Kansas City Royals set a franchise record on their payroll on the way to their best season since 1989. According to SportsCity.com, the Royals spent $82,870, 125 in 2013.

This season, the Royals upped the ante, raising payroll nearly $10 million in 2014 to $92,034,345, according to Deadspin.com. That is a pretty clear commitment for an organization that had an operating income of negative $6.5 million in 2013.

According to Forbes.com, the Royals brought in $178 million in revenue but the franchise suffered a $6.5 million operating loss. Kansas City was one of 11 teams to operate in the red last year.

As an indication of just skewed the world of major league baseball is, the Los Angeles Dodgers amassed an operating income of minus $80.9 million, almost matching the Royals total payroll in 2013.

Cross state rivals, the St. Louis Cardinals recorded the highest operating income of $65.2 million.

The Royals also came in 29th out of thirty teams in current value. Only the Tampa Bay Rays are worth less. Kansas City was valued at $490 millions, according to Forbes.

While some fans, including this one, remain frustrated the Royals don’t push their payroll up another $10-$15 million, especially since they are so close, these numbers make it clear the team may be doing what it can to compete. According to the Deadspin article, the Royals’ payroll sits as the 19th highest in the majors.

The Royals payroll is also higher than AL Central rivals Chicago White Sox ($91,159,254, 20th), Minnesota Twins ($85,776,500, 24th), and Cleveland Indians ($82,534,800, 26th). Only the Detroit Tigers are spending more than the Royals in the Central ($162,228,527, 5th).

Believe it or not, the Kansas City Royals are trying. Some of us wanted the Royals to pursue this free agent or that but they spent money wisely on Norichika Aoki, Omar Infante, and Jason Vargas, getting relative bargains to fill in some gaping holes. Of course, they overspent  on Luke Hochevar ($5.21 million), Wade Davis ($4.8 million) and maybe Justin Maxwell ($1.325 million).

All in all though, if you look through their roster and study the salaries, few stand out as bad contracts. Some are down right bargains. If Billy Butler produces power like he did in 2012, his $8.5 million is a downright steal. James Shields‘ deal, when you see what other number one pitchers are making, has to be considered a good one for the Royals, even at $13.5 million.

The Royals have spent more money than most of their AL Central counterparts, and there are few voids on this roster. Dayton Moore and the Royals have actually put together a very competitive team.

They have done so despite recording a negative operating income in 2013. Maybe we should appreciating what Moore and the Kansas City Royals have done financially instead of what they haven’t done. They have raised payroll nearly $10 million over the payroll that led to an operating loss.

That is commitment.

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Tags: Dayton Moore Forbes Kansas City Royals

  • jimfetterolf

    That is commitment and also shows what management thinks of the current team and the future, that they’ve taken a step up into contention and will be able to sustain that. taking a loss to pay veterans on a bad team is at best a PR exercise, taking a small loss to improve a contending team is an investment as more wins can generate more revenue.

    Of course, it can also be noted that the Royals should have some money in the bank from earlier years of low payrolls, so not really a loss as much as a redistribution of expense from the past to the present, something that happens in many business models.

  • dremus

    Not to disagree with you Jim, but a loss is a loss in any business. They make have increased equity in the past years due to profits, but last year they had a loss. Equity decreased and in all probability cash flow decreased. They spent more this year, lets hope the fans get out there and support this great bunch of Kansas City Royals.