Royals’ payroll pinch is tighter than previously believed
12/09/2012 10:30 PM
08/05/2014 10:23 PM
Royals owner David Glass created a stir recently in revealing $70 million to be the budgeted break-even point for the club’s 2013 payroll.
Well, the financial pinch is actually tighter than initially believed — although not nearly as tight as club officials initially indicated.
Club officials said Thursday that the $70 million payroll figure encompasses the entire 40-man roster — not merely the 25-man roster on Opening Day. The difference between the payrolls for the 25-man and 40-man rosters is roughly $3 million. So far, the Royals are projected to spend $68 million on their 40-man roster.
On Wednesday night, club officials said that the $70 million figure included not only the 40-man roster, but also signing-bonus limits for the draft and international spending. That made the situation look especially bleak: Spending on the draft and international signings is roughly budgeted at $10 million, which would’ve left the Royals $8 million in the red.
Club officials later corrected those figures, saying draft and international spending is not included in the payroll.
Using that figure, the Royals have about $2 million of available payroll next season to break even, according to the club’s financial projections.
“Mr. Glass has been very clear all along,” general manager Dayton Moore said, “that he doesn’t want to cut spending on the draft or in our international operations. But those expenditures do come into play when you’re looking at (overall) profit and loss.”
Glass expressed willingness to subsidize the payroll at a moderate level, which he said he has often done in the past. The Royals’ pursuit of a front-of-the-rotation starter suggests he is willing do so again in regard to the club’s stated break-even point.
“I’ve always been willing to spend whatever cash we’ve generated on payroll,” Glass said, “and I’ve even been willing to subsidize it under conditions where we have an opportunity to be competitive in our division. I’ve never changed from that.”
While top club officials, present and past, affirm Glass’ contention that he doesn’t pocket an operating profit, those assertions are a stark contrast to figures published by Forbes magazine, which contend Glass made about $100 million from 2000-11.
Major League Baseball has long contended the Forbes figures, which are calculated without access to club financial statements, are wildly inaccurate.
“Mr. Glass has gone above and beyond,” Moore said, “in supporting our team in everything we’ve wanted to do internationally, through the draft and in building and improving our major-league payroll. He’s been extremely supportive.
“We’ve signed virtually every single player who we’ve identified as being worthy of a long-term contract. Does he ask tough questions? Yeah, but there’s not anybody I’ve ever met who is more passionate or a better historian of the game. He owns a major-league team for all of the right reasons.”