James Shields has finally signed, meaning closing the door on the three significant free agents from the 2014 pennant-winning Royals ballclub. Billy Butler is in Oakland, Nori Aoki is in San Francisco and James Shields is in San Diego. The Royals did not appear to show serious interest in any of the three free agents, despite all three being key parts of the pennant-winning ballclub. The feeling was the Royals simply couldn't afford James Shields, and wanted to go in a different direction in right-field and designated hitter.
But could the Royals have afforded to keep James Shields? Could they have afforded to keep all three players in Kansas City for another run?
Here is what the Royals ended up spending in new players (we'll count Luke Hochevar as a new free agent as he wasn't really part of the pennant-winning ballclub), compared to what their departing free agents ended up signing for. We'll assume the reports are accurate that James Shields signed a four-year $76 million deal and the money is paid out evenly over the years.
Now you can see why the Royals chose to go with Option A, its the boxes shaded in blue - the mutual options. The Royals know they have some tough decisions to make with their "young" core getting very expensive and they wanted some financial flexibility. They could spend up to $36 million on Rios/Morales/Volquez/Hochevar in 2016, but they could also decline Alex Rios' option and pay his $1.5 million buyout, saving themselves $11 million. That's not unimportant. And the Royals could pay as little as $7.5 million in 2017 (from buyouts on declined options), while Butler and Shields are guaranteed to earn $30.6 million. That's a significant gulf.
However, if the club tries to say they couldn't afford James Shields, its not completely accurate. They could have afforded him this year. And probably next year. Its just that signing guys to lucrative multi-year deals reduces your financial flexibility significantly, and the Royals were not willing to do that. The 2017 financial commitments with all their upcoming arbitration hearings looms large, and the Royals would rather not have to make hard choices at that point.
Still, James Shields signed for less than what a lot of observers thought he would sign for, as did Nori Aoki. We seem to see this every off-season, from Kyle Lohse to Nelson Cruz. I'm not saying the Royals should have necessarily re-signed James Shields. The track record on signing pitchers to multi-year deals is...not good. But perhaps the team should learn some lessons that we see every year, that waiting out the market can yield better bargains, which can be very, very important for a team facing financial constraints like the Royals.