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Volume 26 No. 59
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Royals Likely To Reduce Payroll After Failing To Reach Postseason In '16

Royals Senior VP/Baseball Operations & GM Dayton Moore yesterday said that the club "had been living above its means in payroll" and that the team’s '17 spending "would likely 'regress a little bit' after a record high" in '16, according to Rustin Dodd of the K.C. STAR. The Royals opened '16 with a payroll that topped $135M, the "largest in club history." Early projections for '17 suggest that the Royals "could approach that number after handing out raises for arbitration-eligible players and covering other rising salaries." Moore: "This payroll was put together with going deep in the postseason (in mind). That didn’t happen. Again. ... It’s not going to look very good on the spreadsheet when the bill comes due. Last year’s payroll, it was built to go deep in the postseason; that worked out. This year, it didn’t. So we’ll have to re-evaluate that, probably reorganize, take some steps back.” Dodd notes the Royals have "taken a similar posture on payroll limitations before." Moore last season indicated that the club "would not raise payroll." Yet by the end of the offseason, the club re-signed LF Alex Gordon to a four-year, $72M contract and lured free-agent P Ian Kennedy with a five-year, $70M deal -- the "two largest signings in club history." The payroll "jumped above" $130M for the first time. For now, the Royals have more than $82M "committed to a list of 10 players signed for next season," but that "doesn’t include pending raises for a list of arbitration eligible players ... a dollar number that could push" $30M (K.C. STAR, 10/4).

ONE CHOP SHOPPERS: The AP's Paul Newberry noted after "several years cutting payroll and bulking up the farm system, the Braves plan to be a player in the free-agent market this winter." With the move to SunTrust Park and an "expected boost in revenue, team owners have cleared the way for a payroll increase" (AP, 10/3).

DIFFERENT STROKES FOR DIFFERENT FOLKS: Red Sox President Sam Kennedy this morning noted most MLB teams are "operating really to try and break even each year." He said the teams' revenues "go into player payroll, into our ballparks, so the investments that ownership makes really is to try to put a great quality product on the field and a team that will play baseball in October." CNBC's Joe Kernen asked, “So business is bad? Did you say ‘breaking even’ is what you try to do after everything is said and done?” Kennedy replied, "Different clubs have different operating models, but you’d like to turn a profit each and every year. ... Different folks have different models in their various markets. But business is good. Major League Baseball is very healthy as an industry” ("Squawk Box," CNBC, 10/4).