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How the Royals could keep Eric Hosmer...if they wanted to

Making cents of the dollars

Minnesota Twins v Kansas City Royals Photo by Ed Zurga/Getty Images

One of my favorite lines in the HBO miniseries Band of Brothers comes near the end of the final episode. A mean bastard of a leader that only appears in the first episode in Captain Sobel walks past his former subordinate (and main character of the series arguably) Major Winters. Sobel doesn’t salute Winters, mainly because he’s bitter that Winters has risen above him in the military hierarchy. Winters yells out to Sobel “We salute the rank, not the man.”

I say all that because I want to separate this site from this author. Sometimes that’s a hard line to draw and ask from readers, but I’m making that request here. I’m going to show you how the Royals could afford Eric Hosmer and extend him. I don’t agree with that notion as I think he’s just plain not with the money he’s expecting. I’m simply going to show you how they could do it, if they wanted to.

So the talk a few months ago was Eric Hosmer and his super-agent Scott Boras were seeking a $200M deal. Again, I don’t think that’s particularly close to what he’ll get, but Boras is really good at what he does (he did though compare current day Matt Wieters to Carlton Fisk). So let’s say the Royals (specifically Dayton Moore and David Glass) said “Okay, we think he’s worth that much and we’re willing to pursue spending that much.” This is extremely unlikely (I mean how often do teams sign guys for like 150% of their entire payroll - maybe more than I think) considering the market size of the Royals, but again, let’s just pretend.

To make this work, and it’s possible without having to take out a reverse mortgage on Kauffman Stadium, the Royals won’t have to get extraordinarily tricky, just ordinarily tricky: deferrals. Deferred money has gained some traction the past two years or so (much like the opt out) but it’s been around for decades. It’s gets a bad name due to some infamous deals like Bobby Bonilla getting paid $1.1M from 2011 to 2035, Manny Ramirez is owed $1.9M a year until 2026, Ryan Braun will make $18M from 2022 to 2031, the Cardinals owe Matt Holliday until 2029 while he plays for another team currently, and Ken Griffey Jr. is getting paid by the Reds until the heat death of the universe.

From all that it may seem like deferred money is a bad idea, but it’s simply how teams can find a way to sign a big contract if the player is willing to accept some of the money later. Holliday reportedly agreed to do just that so the Cardinals could re-sign Albert Pujols. The Nationals “afforded” their mega-deal with Max Scherzer by paying him $105M in year from 2021 to 2028, presumably after he’s retired. The Orioles did the same with Chris Davis turning his 7/$161M really into something like 20/$161M after the final deferred money.

The Royals could do a similar thing, and in fact I proposed that back in 2015 when I pondered if the Royals could afford Alex Gordon (spoiler they could and they did).

So if the Royals did want to pay Hosmer $200M, they could spread the money out like so:

Hosmer still gets his requested payday of $200M and the Royals don’t have to break the bank necessarily nor pay Hosmer a large sum deep into his thirties. The average annual value of this deal could be said as being $28.5M. However this also doesn’t take into account the real reason teams do deferred salaries: the time value of money. Simply put money now is worth more than money a year from now and it compounds the further out you go. In real money (non-nominal) the deal really looks like:

The money in the last few years is basically worth half of its nominal value. At $155M that really makes it more like a $22M AAV and the Royals get to pay Hosmer this interest free.

I’m not coming up with some secret plan here or anything. This is basic contract stuff but it’s something a budget tight team can do if they want to outbid the big clubs. Particularly so since the Royals will hopefully have a big boost in their TV revenue money coming in the next few years.

Again, I wouldn’t do this deal. Personally, I wouldn’t give Hosmer more than $90M over six or seven years. He could probably find a better suitor elsewhere for more, but sometimes a parent has to learn when to tell their kids no.


Would you do the $200M deal?

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