$130 million? $140 million?
Superstar quarterback Aaron Jets signed with the New York Jets, one of the two National Football League teams in the largest media market in North America, two seasons ago. That it has not gone particularly well for either team has been a particularly lovely instance of schadenfreude, but that is a bit beside the point: outward observers might wonder how a team like the Kansas City Chiefs could compete against such a wealthy team in a big market.
The answer is that the Chiefs can compete very well. This season, the Chiefs’ total salary cap expenditure is at $249.7 million, right at the league average of $249.3 million. The Jets are only a touch higher at $257.9 million, and no other team in the league has a cap expenditure greater than $260.5 million.
But when the Kansas City Royals and New York Yankees clashed in this year’s American League Divisional Series, the Royals had a meager payroll of $115.4 million while the Yankees payroll dwarfed it at $296.7 million. The Yankees won, and in the World Series, they faced the Los Angeles Dodgers and their $266.8 million payroll.
This payroll gulf between teams like the Royals and teams like the Yankees and Dodgers is one of the stark differences between Major League Baseball and the NFL. It stems from the differences in their collective bargaining agreements with their respective unions and how they share revenue, which is itself a huge issue. Regardless, it brings about a very important question: how big can the Royals payroll get?
There are a few very important indications that the Royals are looking to be aggressive with their payroll, as they know they have to be to regularly compete. Kansas City made waves when they signed Bobby Witt Jr. to an 11-year, $288 million extension earlier this year; until then, the Royals had never offered a $100+ million contract to anyone. The Royals were active in free agency last year, and this year they’ve already extended Michael Wacha and even kicked the tires on Juan Soto.
For a particular number, though, let’s turn to Cot’s Baseball Contracts, the definitive source of MLB contract information. Since Dayton Moore was hired to turn around the team, we have 18 years of of Opening Day payrolls to look at. While the Royals have historically gotten a bad rap for not spending, they only have been in the bottom-five teams in payroll twice over that time. In 10 more seasons, the Royals were in the bottom third of MLB payroll.
The historical numbers that stick out to me are from 2015 through 2017. This was in the period of time after they made a playoff run in 2014 and had established themselves as a definitively good team. They ranked 13th overall in year end payroll in 2015 as they aggressively traded for Ben Zobrist and Johnny Cueto. That marked their highest relative payroll in the team’s history in modern free agency. Their all-time high raw payroll figure came in 2017, when their year end payroll ballooned to $153.6 million as they tried to run it back one more time.
These two figures provide different reference points. If the Royals match that 2017 team with a $153 million payroll maximum, that would mean they have almost $50 million to spend next year. In that context, it makes a little bit of sense why the Royals were sniffing around Soto—if he was asking $40 million a year, the Royals legitimately might have had a shot. Either way, that is a lot of money, even if the Royals are only thinking about a $140 million payroll, which would have been between the 16th and 17th highest year end payrolls last year.
The real question is if Kansas City wants to match the relative payrolls of, say, 2015. If that is the case, the Royals’ payroll ceiling is much higher than you might think. That 2015 team ended with the 13th highest payroll of the year. This year, the 13th highest year end payroll was the Arizona Diamondbacks, who were at $177.1 million.
While I think the Royals could get there in a few years, it seems a little rich for where the team currently is. But the thing about baseball is that the payrolls continue to climb, and the Royals staying abreast with even the median payroll would be a huge increase. If I had to guess, I’d say that the $140 million mark is probably about where they’ll end up. It might sound like a lot, but it’s only about $15 million more than the team ended up at this year.
And the good news? The Royals only have $107 million or so committed this year right now. So buckle up: it could be an interesting Winter Meetings.
