Royals need to live within their constraints

Okay. The party is now over. Well...it isn't but the season calendar has turned from 2015 to 2016 even if the actual calendar hasn't.

Honestly I've been wondering what is the absolute earliest I could write about 2016 was to myself. I'll usually write an article about anything and post it at any time (I'm a rebel). However I didn't want to move focus off of the excellent 2015 season prematurely. The Royals just won the World Series and I wanted to celebrate. However I think I'm pragmatic and even in my personal life I'm always thinking about the future alongside the present. I'm not necessarily someone who will splurge on something for immediate use because I realize I won't have the money in the future. Heck, I hate buying groceries because I don't see the items are products/utility but instead as money. This is maybe the wrong way to look at life but you can thank my finance and business school teachers.

We all know about the upcoming exodus of 2017 and 2018 for the Royals. They are likely going to see almost all the current roster gone by then, or at least the most impactful pieces. There's a chance perhaps in 2018 they could have five qualifying offers and in turn five additional draft picks.

Here's the payroll I've got estimated for the next six years:

It might not be perfect but it's the best I could do. I used MLB Trade Rumors arbitration numbers for guys this year and gave them between $1-2M raises per year. For some guys it will be more and for some guys it could be less. Some of the guys above won't even make it to year two of arbitration let alone year three. However I wanted to include everyone and look for the highest possible payroll obligation. For Jason Vargas the Royals hold $6M in insurance if he misses the entire season so I prorated it a bit assuming he comes back at some point in any capacity.

So as you see I've got the Royals pegged for a little more than $100M in payroll at this point. Numbers have been bandied around about how much the Royals could increase their payroll too. For the most part it seems like $130M may be the max. That's a nice increase. $130M would represent near the Phillies payroll this year and they are top-10 in market size while the Royals are in the bottom two or three.

Maybe you could argue the Royals are going to add more than $30M. Maybe you could argue they are going to add less than $30M. Sure. I could see either cases. They just won the World Series, the core of the team is leaving soon, and now is the time to spend. On the other hand the core is leaving soon and you don't want to take on significant obligations that could hinder retaining those players in the future.

So let's just assume the Royals spend $30M this offseason give or take a few million. Here are the spots they need to fill:

I have five question marks listed using eight infielders, four OF, five starters, seven relievers, and one DH. Maybe they swap that final infield spot for a relief spot or carry a fifth outfielder (though likely not).

Either way we can safely assume they need to acquire at least one starting pitcher and starting outfielder (unless you think Paulo Orlando is an everyday outfielder, in which I would ask you: why?). They also are going to need another reliever or two. Let's just say they need four spots filled.

Four spots would mean they have roughly $7-10M to spend on each spot, balancing between each. They could spend $20M on one player and then $3M on the others and all the other permutations.

This of course means the Royals have decisions to make, and tough ones too. They must always however remember who they are: a small market team.

Despite a payroll soaring well above $100M (which really isn't that high in modern baseball standards) they still are locked into a poor tv deal and reside in a small market. They'll of course reap the benefits of playoff revenues this upcoming season with some carrying over into 2017 likely, but the cash flows aren't necessarily always going to be prominent. Their poor television deal lasts until 2019, which happens to be the year after their star players in theory leave. They may not be able to provide an excellent on field product given the high impending turnover. While they'll see an increase in the payout from their tv deal just through the economics of modern baseball, Fox Sports won't likely be tempted to give them fists of cash. The market of Kansas City just doesn't offer that possibility like in Los Angeles or New York where teams are getting $100M+ per year from their contracts.

We also know the Royals need to rely on their farm system and it will always be that way. Look at current crop of impact players. Basically of them were acquired via trade or draft/July 2. The Royals don't spend $100M buying free agents. They just can't afford to do that as the risk outweighs the reward. They can't afford $20M of dead weight for two or three years.

This is where I ask of you Royals: don't sign someone with a qualifying offer attached to them. Remember earlier when I said I'm always distracted by the future. The Royals should be too. Their payroll obligations need to be made with the future always in mind. They could take on a higher obligation this summer because most of that money is coming off the books once the season ends.

The Royals really can't afford to lose draft picks. This is how their system has to work. There's no guarantee of course that draft picks turn into good players but there's no guarantee that signing David Price, Johnny Cueto, or Alex Gordon will pay off in 2016 or be worth the long term obligation. The projection for those guys in 2016 is of course better than the 2021 projection of whatever prospect they get, however 2021 will still happen (hopefully).

Sometimes you've got to be honest with yourself. Eric Hosmer is probably going to walk. Mike Moustakas, Lorenzo Cain, Kendrys Morales, Wade Davis, Kelvin Herrera, etc... are more likely to not sign with Royals once their contracts expire than will. This is just the capacity that small market teams operate in. So we know a rebuild is coming and not a reload.

The Royals can start some of that rebuild now while still operating in their window of contention for the next year or two. This just requires avoiding splurging on $100M+ contracts this offseason and looking for deals. Not bargain bin shopping, but value shopping. This is a subject I'll write more about soon, but for now we just need to remember who the Royals are.

Nobody is saying the Royals are even going to be in on David Price or Yoenis Cespedes but there will be some chatter about being in on Alex Gordon, Yovani Gallardo, Marco Estrada, and other free agents that have qualifying offers attached to them. There are other options out there that offer similar value (if not more in some cases) that don't come at the cost of losing a draft pick (and draft pool money too).

There will of course be dozens of articles written by myself and my fellow writers (all whom are smarter than me) about what the Royals should or shouldn't do. Will or won't do. Can or can't do, and everything in between.

All I ask is that the Royals don't bolster the present at the expense of crippling the future. Payroll is going up in 2016 and will go even further in 2017. Maybe I'm too farsighted and not looking at the short term, but I'm not entirely convinced that the Royals are going to make the playoffs in 2016. They shouldn't tear the team down ala Jeff Loria and the Marlins, but they shouldn't go all out in 2016 either. If this were a team that could reload instead of rebuild then it would make sense, but unfortunately they are not; and that's okay.

The Royals should spend wisely and not freely. They should sign players without draft picks attached to them. They should look for trades of undervalued assets. They should seek years of team control at cost controlled price rather than buying wins at an expensive price. This is the way small market teams have to work. This isn't me trying to be prophetic or unearthing the next Moneyball. It's me asking the Royals to remember their constraints.