Just about this time every offseason is the same for Kansas City Royals fans. The likes of Ken Rosenthal and Jeff Passan furiously report new free agent signings: Aaron Judge on a nine-year deal to the Yankees! Jacob DeGrom on a five-year deal to the Rangers! Trea Turner on an 11-year deal to the Phillies! Zach Elfin on a three-year deal to the Rays! Meanwhile, the Royals just...exist. They left the Winter Meetings with the same 40-man roster they entered with, which is frankly quite a feat.
Fans have been notably unhappy about this, and the sheer difference in social media activity between the Royals and other active teams is pretty funny, as Max Rieper noted when he joked about it on our Royals Review Twitter account. According to account metrics, said Tweet currently has over 110,000 impressions and over 2,000 engagements. Needless to say, it struck a chord among fans regarding the Royals’ lack of movement in the free agent market.
Yankees: We're bringing Judge back!— Royals Review (@royalsreview) December 7, 2022
Mets: Come see our HOF rotation!
Rays/Guardians: Finally time to spend some money and get over the hump!
Phillies/Rangers: MONEY IS NOT REAL AND WE WILL DO WHAT WE WANT
Royals: Clouds are pretty, right? https://t.co/g8rA0YXJ8h
Look: I get it. The grass is always greener on the other side, and it is simply no fun to see a 97-loss team so disinterested in bringing in outside talent.
However, boring as it is, the Royals’ silence in free agency is the right move. This is in part because the Royals are just in a weird spot right now, but it is also due to the fact that spending in free agency is an unsustainable way to take the next step into regular contention.
We don’t even have to look very far at how this usually goes for teams that stink. Last year, the Texas Rangers were coming off a rather hideous 102-loss campaign—an even worse showing than this year’s Royals squad. They spent last offseason going absolute bonkers, picking up Corey Seager on a $325 million deal, Marcus Semien on a $175 million deal, and Jon Gray on a $56 million deal. All told, the Rangers spent $580 million on free agents in one offseason.
The results? Well, the Rangers went from a 60-win team in 2021 to a whopping 68-win team in 2022 even though Seager and Semien accrued a combined 8.7 WAR per Fangraphs. Their pitching stunk and they didn’t have depth; 12 position players notched 10 or more plate appearances and were at or below replacement level on the year. Even if they had also signed Freddie Freeman and Carlos Correa, the Rangers would probably have barely been a .500 team. If the Royals did the same thing, let’s all be honest—they’d probably be looking at a similar result.
However, just because the Royals shouldn’t spend money now does not mean that they should never spend money. On the contrary: the Royals ownership better spend big when free agency will move the needle. That’s because even though free agency isn’t an efficient way to construct a team, it is the best way to bring in additional talent at positions of need without sacrificing your own organization’s talent.
Small market teams like the Royals would like you to believe that they don’t have the money to spend big. But, as Max pointed out in his exploration of what it would look like if the Royals did splurge on free agents this year, the Royals absolutely do have the money. Why? It’s worth going over again:
- The Royals get $65 million a year from national television deals
- The Royals get $50 million a year from their local television deal with FSKC/Bally Sports KC
- The Royals get, conservatively, $40 million a year from revenue sharing
- Ticket revenue is a little trickier; however, some math based on attendance figures as well as ticket revenue figures gives a range of $45 to $55 per attendee, which would put the Royals getting somewhere between ~$60 million and ~$100 million depending on attendance rates and accounting for a lower per-ticket revenue than the average.
Therefore, at the low end, the Royals pull in at least $215 million per year in revenue based on publicly available data, data that does not include merchandise sales, advertising sales, and the like. If you do some careful calculus, you can therefore see that $215 million is about three times the Royals’ estimated payroll for 2023.
The scary thing is that these numbers could very well be higher. Only one baseball team is publicly owned—the Atlanta Braves—and their owners must disclose the Braves’ financials because of, you know, financial law and all that. Anyway, the Braves pulled in over half a billion dollars in baseball revenue. Granted, they had a bunch of playoff games. But could the Royals be pulling in $300 million in revenue? Maybe!
Do not believe the lie that baseball teams are not extremely profitable ventures. They are. And the financials of the Atlanta Braves, as @EricFisherSBG noted, illustrate that. A $104 million profit in 2021. A $6 million-per-game revenue stream. As a business, baseball is superb. pic.twitter.com/OXlMCdOKNn— Jeff Passan (@JeffPassan) February 25, 2022
What we all need to keep in mind here is that we simply cannot trust MLB owners—any and all—about their teams’ finances. MLB teams are owned by incredibly rich individuals and groups of individuals, none of whom have offered to show their books to anybody to verify that they aren’t making as much money as it seems they are making. The Royals are not special in this regard. They are just one of many.
Life for Royals fans has not been great for a while. The team has been completely irrelevant for the last half decade and no amount of free agent signings is likely to propel next year’s team into a winning record, let alone playoff contention. But there will come a time when it’s time to spend and spend big, and Royals fans should not buy it if and when the ownership group cries poor.