Money, money, money.
We are in the middle of MLB’s free agency season. The biggest name on the board is Juan Soto who is projected to sign a long-term contract for at least $600 million.
Juan Soto will not be signed by the Royals. Nor any other “small market” team.
Under MLB’s structure, the large market teams have significant built-in advantages, mostly related to money, money, money.
Small market teams with modest budgets must be creative and take risks to build a good roster, and Kansas City got some well-earned recognition for their effort in 2024. As the season was winding down in September, Brittany Ghiroli wrote in the Athletic:
“The Kansas City Royals are good for baseball, and not just because they are a small market team vying for a postseason spot or because Bobby Witt Jr. is one of the game’s brightest young stars. No, the Royals are good for baseball because they’re a shining example of what every organization in professional sports should be doing: trying…Not every move the Royals made has worked out. But, like their lineup, the Royals front office has a pretty low whiff rate…Kansas City’s model has proven to be a good one. It’s good for the city, which hasn’t had a playoff team since the 2015 World Series champions. It’s even better for baseball.”
The Royals mixed free agent spending ($110 million, 6th highest in MLB), trades during the season and waiver wire acquisitions to build their roster. They signed Bobby Witt Jr. to a long-term contract. Not only did they win 30 more games than they had in 2023, but they also made the playoffs and won their Wild Card round before bowing to the Yankees in the ALDS.
The major year-end awards confirmed the team’s good judgement. Pitchers Seth Lugo (a 2024 free agent signing) and Cole Ragans (a savvy 2023 trade deadline move) finished 2nd and 4th in the AL Cy Young race. Bobby Witt Jr. was the unanimous choice for 2nd place behind MVP Aaron Judge. And Matt Quatraro was the runner-up for AL Manager of the Year.
It will not be easy to build on this success. Or even repeat at the same level. Why? Well…
It’s the Money, Money, Money: Before getting into the details, my managing editor Rita points out the need for a…
This is the warning that for the next four sections, Hot Stove will be down in the weeds with numbers and comparisons. If that’s not your cup of tea, feel free to skip to The Royals in 2025.
Now, into the weeds.
I could not readily find a chart for 2024, but this one will do to show the relative total revenues for MLB teams.
Revenues include ticket sales, concessions, parking, licensing, merchandise, broadcasting rights and sponsorships. MLB teams have agreed to some revenue sharing to mitigate the big market advantages, but the gap between the haves and the have-nots remains vast.
Broadcast Revenue: The main advantage for the big markets is the TV revenue. The Yankees (in a 2-team market with the Mets) have a population area of 19 million people. Kansas City has 2.2 million. The gap on TV income is dramatic. On top of that, the Royals will likely get less in 2025 as their network partner exits bankruptcy and changes its name from one gambling company to another…
With the struggling of some regional networks and the changing cable/streaming market, Commissioner Rob Manfred has floated a trial balloon for nationalizing MLB’s broadcast rights. The NFL model of parity has proved lucrative and popular for pro football. But Yankee owner Hal Steinbrenner has quickly responded that any such program would at the very least need to be optional. Other big market teams may feel the same way. Stay tuned.
Advertising and Sponsorships: When I watch on TV, I am impressed by the sheer variety of ways the teams advertise during all moments of the game.
Some of the latest ad signage in the stadiums can be found inside the dugouts and on the foul poles. In Kansas City, the “fowl” poles have ads for Chick-fil-A.
No space is sacred. A good example is the uniform shoulder patch. Again, I’m guessing the large market teams get a bigger payout for this than the small market teams – Starr Insurance (Yankees) likely pays more than QuikTrip (Royals).
Same for primary beer sponsors (chart credit: BrooksGate)…
And stadium naming rights (chart credit: BrooksGate)…
Fruit Beverage Stadium Trivia: For different reasons, the two fruit beverage sponsorships will not be applicable for 2025.
Minute Maid Park, home of the Houston Astros, will be renamed Daikin Park. When originally opened in 2000, the stadium was called Enron Field. After Enron went bust, the Astros brought in Minute Maid in 2002. Daikin is a Japanese conglomerate that is the world’s largest air conditioning manufacturer. It has a large presence in Houston. I think it’s pronounced die-kn.
Tropicana Field, the St. Petersburg home of the Tampa Bay Rays, is out of commission because of Hurricane Milton (below). The Rays will play the 2025 season at the Yankees’ spring training facility in Tampa (George M. Steinbrenner Field).
MLB Payrolls: Much of the revenue discussed above goes to player payroll. The teams with the top six payrolls in 2024 all made the playoffs.
The Yankees won 94 games in the regular season. The Royals, 86. Based on the payrolls above, the Yankees paid $3.29 million per victory while the Royals paid less than half that amount at $1.42 million. With all 30 teams considered, the Royals had the ninth-lowest cost per win.
The numbers above reflect the 26-man rosters. The more relevant payroll calculation is the sum of (i) the 40-man roster cost (a combination of the 26-man roster, some minor leaguers and players injured or temporarily inactive) , and (ii) if applicable, the competitive balance tax (a/k/a the luxury tax) paid when teams exceed certain payroll thresholds. That combined cost, including the tax bill, for all 30 teams is on the “Spotrac” website (click here). The top three:
The Mets are still paying a luxury tax on some bad long-term contracts. The other two teams faced each other in the World Series. Money, money, money.
The Royals 40-man roster?
The Scrooge Index: An article on the Score website compared the 2024 payroll costs to team revenues for 2023 (most recent available) to determine which owners were generous, i.e., devoted a high percentage of their revenues to player payroll (the “Scrooge Index”). The Royals expended 59% of their revenues on payroll, placing them as the fifth most generous team under this test. That percentage may grow next year when Bobby Witt Jr.’s new contract kicks in.
The next 10 teams after the Royals range from 50 to 56%. The remaining 15 teams are all below 50% on the Scrooge Index.
The Royals in 2025: So, what should we expect from principal owner John Sherman and general manager J.J. Piccolo for the Royals in 2025?
The early news is good. They have resigned starting pitcher Michael Wacha, a successful free agent acquisition last year. Wacha’s signing protected their starting pitching depth, giving them leeway to trade Brady Singer to Cincinnati for Jonathon India. The Royals were in desperate need of a lead-off man to set the table for Bobby Witt Jr., and India had a .357 on-base percentage in 2024. The Royals also received outfield prospect Joey Wiemer in the trade.
In addition to signing Wacha, the Royals have indicated they will continue to be active in the free agent market, at a level within reason (no Juan Soto).
The intangibles, like attitude and culture, also appear strong. And our city is on a roll. I read a good article on this in Joe Posnanski’s blog, but it was not written by Joe. Titled “A New Confidence of Kansas City,” the guest post was written by Jason Kander soon after the Royals played their final playoff game. I’ll let Joe explain…
In his post, Jason reflects on why the people of Kansas City have gained confidence over the last 20 years. The Royals of 2014 and 2015. A revived downtown. The streetcar. Hometown of Ted Lasso and Antman. The Chiefs, Sporting KC and the Current (and the Current stadium). Leading the nation toward solutions for veterans’ homelessness (Jason works with the Veterans Community Project). Travis and Taylor. The upcoming World Cup.
“And now it’s happening, because these days, in Kansas City, we take big swings.”
Jason concludes his article with his thoughts on the Royals for 2025:
“So, when I reflect on our improbable 2024 Royals, including our elimination at the hands of a team with a payroll 17,000 times our own, I don’t shake my fist at the system. I ponder which corner outfielder we’ll pick up in free agency to add power to the fifth spot in the lineup and which reliever we’ll get to set up our already fantastic closer. But I do not hope we make these moves, I know we will, because we have removed doubt from the equation and replaced it with unnatural, outsized confidence.
In the clubhouse after Wednesday’s season-ending loss, Bobby Witt Jr. said he now expects to make the postseason every year. And to the rest of us, that makes so much sense it feels nearly obvious.
Because we are Kansas City. We are the center of the known universe, we are just getting started, and next year we’re gonna win the World Series.”
I second that emotion. Thank you, Jason. Also, thank you for Operation Bella…
Argo and Operation Bella: In 2012, Rita and I attended our second Telluride Film Festival. We got a nice surprise when a sneak preview was added to the official program. Ben Affleck was in town to introduce the world premiere of Argo, a film based on a true story about the 1979-1981 Iran hostage crisis. Six Americans in the embassy escaped and went into hiding while the other 66 were taken hostage. The six were extracted by a fake CIA film crew that entered Iran claiming to be scouting locations for a movie titled Argo. The six American escapees were merged into the film crew and flew out of Iran after the “scouting” of locations was completed. Argo won the Oscar for best picture.
Forty years later, déjà vu. In 2021, when the U.S. withdrew from Afghanistan, many Afghans who had aided the U.S. were at risk if they remained in the country. Jason Kander, an Afghan War veteran, got involved to help extract the family of his Afghan interpreter. The project grew to 383 Afghans who were able to gather for a fake wedding as their cover before boarding a plane to take them out of the country. The code name was Operation Bella, named after Jason’s young daughter. The operation was full of danger and heroes, as seen last night in a double-segment piece on 60 Minutes. If you missed it, the show is available online here.
So, will there be a movie like Argo for Operation Bella? Steve Kraske asked that very question at the end of his interview with Jason on KCUR’s Up To Date.
Steve: “There’s going to be a movie about this, right? And if so, who is going to play Jason Kander.”
Jason: “Have me back in a few months, okay, and we’ll talk.”
Stay tuned.
Lonnie’s Jukebox – Money, Money, Money Edition: Moving on from “Money, Money, Money” in baseball, let’s turn to “Money” in music titles.
“Money Honey” by Elvis Presley (1956). This is the version that I remember and is a good example of a rock ‘n’ roll cover of an earlier R&B hit. The original was released in 1953 by Clyde McPhatter and the Drifters who took it to #1 on the R&B chart (play that version here).
“Money (That’s What I Want)” by Barrett Strong (1959). This was the first hit for the newly formed Motown Records. It was the only time Barrett Strong hit the charts as a performer, but he found major success as a songwriter. He and fellow Motown writer Norman Whitfield wrote many classic songs, including “I Heard It Through the Grapevine” (Marvin Gaye), “War” (Edwin Starr) and “Papa Was a Rolling Stone” (the Temptations). In 1963, the Beatles had a popular cover version of Strong’s one-hit-wonder (play it here).
“The Money Song (Sitting Pretty)” by Joel Grey (1966, from the Broadway musical Cabaret). The show opened on Broadway in 1966 and won the Tony for best musical. John Kander and the late Fred Ebb wrote the music and lyrics. Last month on the 58th anniversary of the show, the 97-year-old Kander attended the current revival and noted that the story (sadly) remains relevant (video clip here). John Kander Trivia: (i) he was born and raised in Kansas City, (ii) he is the great-uncle of Jason Kander, (iii) Kander and Ebb’s Chicago, first performed in 1975, is also currently in revival on Broadway, and (iv) this being a baseball newsletter, I must mention he was born the year Babe Ruth hit 60 homers.
“Money, Money” by Liza Minnelli and Joel Grey (1972, from the movie Cabaret). When Cabaret moved from the stage to film, some songs were dropped and new ones written by Kander and Ebb were added. This is one of the new songs and is sometimes added to revivals of the Broadway show. It opens with the well-known line, “Money makes the world go round.” And is handy for signing free agents.
“For the Love of Money” by the O’Jays (1973). This was used as the TV theme song for The Apprentice. Seems appropriate.
For the love of money
People will lie, Lord, they will cheat
For the love of money
People don’t care who they hurt or beat
“Take the Money and Run” by the Steve Miller Band (1976). “This here’s a story about Billie Joe and Bobbie Sue/Two young lovers with nothing better to do…”
”She Works Hard for the Money” by Donna Summer (1983). An appreciation for the struggles of working women, many shown in this official video.
“Money on My Mind” by Sam Smith (2014). The English singer can sometimes be found in Las Vegas (the linked music video) and Tribeca (inside joke for one Hot Stove subscriber).
“Money, Money, Money” by ABBA (1976). Saved this one for last. Title song for this edition of Hot Stove. The link is to the official ABBA video inspired by the “Money, Money” scene in the film version of Cabaret.
Walk-Off Comment: Pitchers and catchers report to spring training in 72 days!
Go Royals!