Royals prefer to buy good will with contract negotiations

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Posted: Mar 04, 2016 11:46 AM
Royals prefer to buy good will with contract negotiations

SURPRISE, Ariz. (AP) — The Kansas City Royals had All-Star catcher Salvador Perez under control through 2019 with the sweetest of sweetheart deals, one that even at its signing was among the most club friendly in baseball.

They decided to rip it up anyway.

In a move that Perez's agent, Rick Thurman, said he had never experienced in all his years in baseball, the Royals gave their three-time Gold Glove winner a $52.5 million, five-year contract that was tacked onto this year, effectively replacing a laughable $7 million, five-year deal from 2012 that included three years of budget-friendly options.

"This was a really unique negotiation, I think for both of the sides," Thurman said this week. "There's a lot of teams that may not have done this."

The World Series champions have chosen to take an unusual approach to negotiations. They'd rather reward players who outperform their contracts than take a hardline approach, or buy out remaining arbitration years from their young stars than go to often-contentious hearings.

In essence, they have decided to purchase good will in hopes it will pay off down the road.

"Some people will say, 'Why didn't you wait a year, wait a couple of years?'" said general manager Dayton Moore, who signed Perez to the initial contract and the replacement deal. "We've said from Day One, we want homegrown players. We want to grow our own and once they produce, we want them long-term."

Other teams have rewarded young players. Two years ago, Angels outfielder Mike Trout got $1 million, a record for a pre-arbitration deal, which ultimately led to a $144.5 million deal covering 2015-20.

But there are teams that prefer to take a more frugal approach.

The Pirates gave young ace Gerrit Cole a $538,000 contract this season — players with less than three years of major league service time must accept any salary at or over the minimum of $507,500. While it was a $7,000 boost from his base salary last year, it was less than he earned following a $10,000 All-Star bonus.

Pirates GM Neal Huntington acknowledged a mistake was made in computing Cole's salary and increased it to $541,000 for this year. But when Cole asked for more, the Pirates threatened to reduce his salary to the major league minimum, he told the Pittsburgh Tribune-Review.

"Once you make an exception, how do you draw the line?" Huntington said of his rigid approach. "If it's only for MVPs, what if someone wins a Cy Young? Or what if someone finishes fifth in the Rookie of the Year voting? Some clubs have the ability to go in different directions, higher or lower. We believe our system is consistent and it's the right way to do things for us."

Evidently, it's not the right way for the Royals.

While their payroll has expanded in recent years, they remain at their core a small-market franchise with certain financial limitations. The Yankees and Dodgers will almost always be able to outspend them for a front-line starter or established position player. So the ability to develop and creatively retain homegrown stars is paramount to Kansas City being a consistent winner.

One way to do that? Establishing a culture where players feel valued.

The pocketbook is a good place to start.

"Everyone knew that Salvy was outperforming the contract that he had," said All-Star outfielder Alex Gordon, one of the Royals' longest-tenured players, who signed a $72 million, four-year deal to stay with them this offseason. "I think everyone knew that it was the right thing to do."

It seems as if everyone noticed, too.

First baseman Eric Hosmer can become a free agent after next season and will almost certainly demand a fortune on the open market. But he said that seeing the way Perez was treated will stick in his mind.

"We all trust Dayton in here. We all trust everybody to do their part," Hosmer said. "He's brought in plenty of the pieces to help us be a championship team. He's our guys. That's our leader."

All-Star outfielder Lorenzo Cain had his final two years of arbitration bought out this past offseason, and he could join Hosmer in free agency. While Cain insisted on leaving "all that business to my agent," he also believes that karma can come to roost.

"It's been a process of everyone taking care of everyone. That's something you want to be part of," he said. "Dayton has done a good job of taking care of me and Sal and Gordo and numerous guys."

Indeed, the Royals now have 16 of the 40 players on the roster signed to multiyear deals, not including options — a lot compared with other teams. The Yankees have just 11.

Whether buying all that good will pays off may only be revealed in the coming years, when Hosmer and Cain — and yes, Cole — ultimately reach free agency.

"We've said from Day One we want to create an organization we'd want our own son or family to be part of," Moore said. "There's a business aspect of it. We get that. We understand that. It's ultimately our job to uphold that integrity. But the bottom line is, 'What is the right thing to do?'"