Opinion: Kansas City Royals Vs The Economics Of Major League Baseball


Kansas City Royals first baseman Eric Hosmer (35) Mandatory Credit: John Rieger-USA TODAY Sports

Many of us hoped in the deepest recesses of our hearts that the Kansas City Royals could somehow pull off a miracle and sign Japanese sensation Masahiro Tanaka. As soon as news broke of his signing Wednesday afternoon, it was clearly evident the Royals had zero shot at acquiring him.

It was another mere pipe dream shattered by the harsh realities of Major League Baseball.

Tanaka inked a deal with the New York Yankees for 7 years and $155 million.

The new posting system for Japanese players was supposed to allowed the small market teams a fighting chance at acquiring players like this. No small market ball club could ever afford the $50 million plus posting fee the Texas Rangers paid for Yu Darvish. The posting fee was capped at $20 million, but the player could negotiate with the team, or teams that posted the highest amount.

A number of teams may have bid the $20 million max, but few can afford to pay a pitcher with no major league experience $22 million a season for 7 years on top of the posting fee. Certainly the Royals can’t, and they shouldn’t.

For years now, I have bemoaned the fact the Glass family wouldn’t pony up more money for free agents. It was excruciatingly frustrating to watch the Royals butcher the game of baseball, year after year, with horrible players, several of which would have been bench players for other teams, or in their minors.

This simple fact is that Kansas City never had a chance at bringing in marquee players. And they still don’t!

What Dayton Moore and the Kansas City Royals are doing now is the only thing they can do. They can do their homework for the Amateur Draft. They can do their best to develop young talent. They can look for value on the trade market, and they can sign a mid range free agent or two to supplement their roster.

The Kansas City Royals cannot sign big name free agents. It just isn’t possible. Check out the numbers for some of these ridiculous contracts that have been given to players, some that weren’t even free agents yet, and tell me if you think the Royals should have matched any of them:

Masahiro Tanaka – 7 years, $155 million, New York Yankees, plus $20 million posting fee

Clayton Kershaw – 7 years, $215 million, Los Angeles Dodgers

Justin Verlander – 10 years, $219.5 million, Detroit Tigers

Albert Pujols – 10 years, $240 million, Los Angeles Angels

Zack Greinke – 6 years, $159 million, Los Angeles Dodgers

Felix Hernandez – 7 years, $175 million, Seattle Mariners

Prince Fielder – 9 years, $214 million, Detroit Tigers, since traded to Texas Rangers

Alex Rodriguez – 10 years, $252 million, New York Yankees

Mark Teixeira – 8 years, $180 million, New York Yankees

CC Sabathia – 8 years, $182 million, New York Yankees

Adrian Gonzalez – 7 years, $154 million, Boston Red Sox, since traded to Los Angeles Dodgers

Cole Hamels – 7 years, $153 million, Philadelphia Phillies

I could go on but you get the picture. Only one of these contracts was signed by a smaller market team – Felix Hernandez’s deal with Seattle. All of these contracts are for over $20 million a season. Even if the Royals had a budget of $100 million, that would be at least 20% of their whole payroll.

After looking at these numbers, the Rangers just stole Darvish. They paid the $51 million posting fee, then signed Darvish for 6 years, $56 million. The Royals could have afforded that, but who knew? The new posting system is no different from free agency, and the small market teams have no chance.

The biggest issue with these contracts is the back-end. For teams like the Royals, there is no way they can afford the last 2, 3, 4 years of these contracts if (when) the players are no longer star performers. Can you imagine Kansas City paying $30 million a season in dead money to a washed up Albert Pujols? It would be a disaster!

Money can’t buy championships. The Yankees got old and expensive, but they don’t care. They will just spend more. The Red Sox won the World Series in 2013 AFTER dismantling their over priced roster that started the 2012 season. The Dodgers watched the more frugal St. Louis Cardinals play in the World Series this past fall. Money can buy competitiveness on a consistent basis.

Todd Pheifer of Emerald City Swagger had a nice take this morning on how the national media just doesn’t get it. Check out his comments on Ken Rosenthal’s misplaced enthusiasm for the Tanaka signing.

The Kansas City Royals, under Dayton Moore and the Glass family, are on the right path for the Kansas City Royals. That is a big admission for me. They are doing it the only way they can.

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

Moore will be judged by how the players he has drafted develop. Some may judge him solely on the James Shields/Wil Myers trade and that is unfair. I stand pat in my opinion that trade had to happen for Kansas City to become competitive.

For the Royals to be successful going forward, Eric Hosmer, Salvador Perez, Mike Moustakas, Greg Holland, Danny Duffy, and Yordano Ventura must be good players for the Royals this season. If Moustakas never comes around, or if Duffy and Ventura are never more than number 4 pitchers, the Royals probably won’t be able to take the next step.

There is another wave of youngsters on the way for the Royals if the current young players don’t succeed. Kansas City has seven prospects on the Scout.com Top 100 list, but most of those won’t be ready to make contributions until 2016 at the very earliest, and even if they all make it (highly unlikely), it will be another 2-4 years for them to fully develop in the majors.

Moore has no other choice but to continue to build his rosters the way he has been. Finding a cheap right field option in Norichika Aoki. Signing a slightly over priced Omar Infante. Taking chances on players like Jeremy Guthrie and Jason Vargas.

This is how the Royals have to do it, and they have to hope it works out in the small windows that are open for them before the present batch of players either get too old, or price themselves right off the roster.

The economics of baseball are not helping the Kansas City Royals. Unless he comes off his reported stance of wanting a similar contract to what Greinke signed, there is no way the Royals can extend James Shields.

What if Eric Hosmer does take the next step forward in his development this year? What is he does become a .300 hitter who hits 30 home runs and drives in 110?

What will Hosmer be worth? Adrian Gonzalez money ($22 million a year)? Prince Fielder ($23.7 million a year)? What? Hosmer will be 27 years old when he hits the market. If he turns into what the Royals need him to be, he has no more than 3 years left with Kansas City. Period.

There is no way the Royals can sign any of their own players who might be superstars. Moore has down an excellent job signing players like Alex Gordon, Billy Butler, Salvador Perez, and Alcides Escobar to some long-term deals, but none of these guys are superstars (Perez has the best chance). Hosmer shows no indication he wants to ink a long-term deal with the Royals. There is little doubt he wants to test the market when his time in Kansas City is up.

Dreaming of a power hitting free agent. Don’t. What will Giancarlo Stanton sign for in two years? He is the same age as Hosmer, and he has averaged 29 home runs a season in his first 4 years. If he averages that over the next two, and stays healthy, he is looking at a deal of at least 10 years, $250 million. At least!

The Royals have no chance, economically speaking, to sign the big name free agents, or even the second tier free agents. We dream and hope otherwise but that is the truth of the matter. Baseball is not played on an even playing field, no matter how they dress it up. There is no indication that it will ever change.

The owners of the big market teams have no interest in changing the status quo, and really, neither do the players. Why would they? They reap the benefits of this broken system.

Teams like Oakland, Minnesota, Cincinnati, Pittsburgh, and hopefully Kansas City (some day), may all have things go their way for a year or two, but they will not be able to out spend the big boys, ever. These teams have to do the little things, like drafting and player development, without making many missteps. They have to bargain shop and hope they find a gem. They have little choice. The margin of error is so small.

As much as it pains me to say, the Glass family and Dayton Moore are doing things in the manner in which they should. If there is anything else they could do, it would be to try to emulate the St. Louis Cardinals, who do as much on so little as any team in the majors.

If the Royals can find a way to pump up their budget to the $100 to $120 million range, like St. Louis, they probably could compete more regularly, while still doing those little things correctly.

There is no financial equity in baseball, and at this point, it doesn’t appear as if there ever will be. The Glasses and Dayton Moore have the right business model for the team. It has taken me a long time to believe that.

Now they just have to execute better than the big boys. They haven’t thus far, but it is the right path they are on.

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