Trying to cut costs may be hurting the rebuild

David Glass was once a reviled owner in town, and for good reason. The team was a laughingstock, mired in the cellar of the American League standings. The team was pennywise and pound-foolish, failing to make crucial investments in scouting and player development - pretty much ignoring Latin America, refusing reasonable player extensions because of a difference of a million dollars, even going so far as to not wear Negro League uniforms on Negro Leagues Day because they were too expensive.

But then David Glass received one of the best image rehabilitations in Kansas City history, going from miser to benefactor. He financed the biggest payrolls in franchise history and won the first championship for the club in 30 years, a feat that seemed impossible when he purchased the team in 2000. David Glass stood with a championship t-shirt draped over his button-up shirt in the Royals clubhouse, dripping in champagne, and proclaimed that “losing is for losers” as he clutched the trophy.

Well, the Royals are losers again. Bigly. The club has acknowledged a rebuild must be done, with the next competitive Royals team at least a few years away. Despite a 22-52 record that is worse than all but one team - the Orioles - the Royals aren’t doing this on the cheap. The Royals still had an Opening Day payroll of $115 million, more than 11 other clubs.

So you can kind of understand why David Glass might want to cut payroll. I mean, you could probably go pretty close to 22-52 with 25 random guys in the minors. But trying to cut payroll even more may be hurting the long-term look for this franchise.

Consider the three-way trade the Royals made last off-season with the Dodgers and White Sox. In the deal, the Royals shipped lefty Scott Alexander - a young lefty coming off a very impressive season with five more controllable years - to the Dodgers. The Royals received pitcher Trevor Oaks and infielder Erick Mejia from the Dodgers, but also got the White Sox to take on Joakim Soria and most of his $10 million salary, with the Royals off the hook for all but $1 million. The move saved the Royals $9 million.

Or consider the deal they made with Oakland for Brandon Moss and Ryan Buchter with the Royals getting back pitchers Jesse Hahn and Heath Fillmyer. Buchter was clearly what the A’s wanted, as the situational lefty had four years of control left. And they were willing to pay $5 million of Moss’s $8.25 million salary to get Buchter, with the Royals taking on the rest. The move saved the Royals $3.25 million.

Money is an asset, just like players. And the more money you save a team, the better prospect you can get in return. If you make a deal that obligates the other team to even more money, you can generally expect a worse prospect than you would have received had you absorbed some of the financial cost. This was recently articulated by Nationals General Manager Mike Rizzo, as he explained how he was able to make a deal for Royals closer Kelvin Herrera for three prospects by asborbing the $4.4 million owed to the All-Star reliever.

“I think it really affects the player return, obviously,” Rizzo said. “Picking up the entire contract — the prorated portion of the contract — was important because it allows us to make the best deal we can for the long-term future of the organization.”

The Nationals agreed to pay the rest of Herrera’s salary in order to hang onto their better prospects. Perhaps the Royals really like third baseman Kelvin Gutierrez, outfielder Blake Perkins, and pitcher Yohanse Morel, but the opinion of many observers was that it was an underwhelming, low-upside package for the Royals.

Now we don’t know for sure that the Nationals would have parted with any top prospects had the Royals agreed to pay the remaining salary for Herrera. But we do know the Nationals face some payroll constraints, as they are already over the luxury tax threshold for the second consecutive year, meaning their overage is taxed at a rate of 30%. Paying for Herrera’s $4.4 million salary actually cost the Nationals $5.7 million.

And if the Royals had other suitors like they reportedly did with the Angels and Dodgers, they could have played suitors off each other and offered to pay Herrera’s salary in order to get better prospects. And if those teams balked, they could have waited until the market came to them - the Cubs and Giants both lost their closers to the disabled list this week. After a winter in which teams seemed more payroll-conscious than ever before, the Royals could have used money as a weapon, to leverage better deals from teams.

Perhaps saving money is all part of a long-term strategy by the Royals. You could argue the money saved on the Soria and Moss deals allowed them to sign Jon Jay, who netted them a decent pitching prospect in Elvis Luciano earlier this month, and Mike Moustakas, who could still be dealt for a prospect this summer. Maybe the money saved on Herrera will go into some sort of account to be used to acquire more long-term talent. Maybe the Royals are hoping to get payroll down because they expect to contend sooner rather than later, as Sam Mellinger seems to suggest.

But as I have argued before, teams only have a few avenues to add talent. Small market teams like the Royals must maximize their return in trades. And one way to do that is to take on financial costs. This summer, the Padres actually took on a bad contract - pitcher Phil Hughes - as part of their rebuild because it got them a prospect from the Twins. The Royals should be so creative.

Instead, the Royals seem to be looking to cut costs. And this seems to inching towards a return to the days of being pennywise and pound-foolish. Paying $4.4 million for a player that is not even on your team may hurt now, but if it nets you even a decent starting player, that could save you millions you don’t have to spend on a free agent at that position. Getting more higher upside talent will save money in the long-term, and could very well help you win games in the future.

David Glass has worked pretty hard to become a likeable figure in Kansas City sports. It would be a shame to see that frittered away because of shortsightedness and frugality during the rebuild.