The Royals retain that coveted financial flexibility going forward.
The Royals fielded an Opening Day payroll of $88.9 million in 2021, keeping player expenses close to level despite financial losses last year. Around baseball, teams were cutting payroll left and right and claiming $1.8 billion in financial losses due to the shortened pandemic season that had no fans in attendance.
Last year, teams were projected to spend $4.9 billion on player payroll, which was pro-rated to $1.8 billion in player payroll due to the 60-game season. This year, teams have a collective player payroll of just $3.8 billion, according to data from Sportrac, a 22 percent decrease from what they would have spent in 2020. If you take 2020 payrolls, pro-rate them to a 162-game schedule and compare them to this year’s payroll, the Angels are the only team in baseball that actually increased their spending.
Last year, the Royals were projected to have an Opening Day payroll of around $93 million, but with the shortened season, the payroll was pro-rated down to just over $34 million. Not counting that year, this year’s payroll is the lowest the team has begun the season with since 2013.
Source: Baseball Prospectus
The Royals did make several commitments to players this off-season, signing free agents Carlos Santana, Mike Minor, Greg Holland, and Michael Taylor, trading for Andrew Benintendi, and signing Hunter Dozier and Salvador Perez to long-term contracts. Despite these commitments, they a good amount of financial flexibility going forward. The team has just $46 million in contractual obligations for 2022, although they have eight players likely eligible for arbitration that year. Those arbitration cases could total between $30 and $40 million in additional expenses, which should leave the Royals some room to make even more acquisitions this off-season. They will also have to decide if they want to retain Jorge Soler and Danny Duffy, both of whom are eligible for free agency after the season.
Source: Baseball Prospectus
The Royals have even more flexibility in 2023, when Salvador Perez and Hunter Dozier are the only players under contract, although the club will hold options on Mike Minor and Whit Merrifield. That flexibility may be important as that may be when Brad Keller, Brady Singer, Adalberto Mondesi, and Josh Staumont could all be eligible for arbitration, with perhaps a Bobby Witt, Jr. long-term deal looming as well.
The Royals rank 22nd among teams in payroll, with the average payroll coming in at $127 million. The Los Angeles Dodgers top all teams in spending with a payroll of just over $247 million, followed by the Yankees, Astros, Mets, and Phillies. The Cleveland Indians have the lowest payroll in baseball at $49.7 million.