The Royals Have Found the Formula for Small Market Success

Here's a player the Royals have control of for the next few years, Eric Hosmer. A time will come when they need to make a smart decision about his future with the team.

A comment on the Kansas City Royals: General Manager Dayton Moore is constructing the Royals in the only way that a small-market team can be successful. As I see it, there are a few key things required for small-market success. They are:

1) Investing heavily in draft picks and Latin America - This seems obvious, but it isn't always a given that when drafting a team takes the best available player. Often teams pass up on top-tier prospects because they feel like they won't be able to sign them i.e. they don't have enough money to sign them. The Royals illustrated this philosophy repeatedly before Moore's tenure began. In reality, shifting financial focus to these picks, instead of free agents, is cheaper since the club controls players for many years under their rookie contracts. The same is true for signing young, Latin American players. Moore has been able to sign Mike Moustakas, Eric Hosmer, and Wil Meyer, among others, despite concerns of those players' signability. As a result, the Royals are opening a window to sustained MLB talent with a stocked farm system.

2) Signing the players they can to long-term deals early - The consistent complaint of small market fans is that once their players get good, they leave for larger markets and more money. While that's true to a degree, it's also true that top-tier players are sometimes willing to sign long-term contracts for stability before they hit free agency or give their current clubs discount. Joe Mauer gave the Twins a discount. Ichiro Suzuki signed a long term deal with the Mariners before he hit free agency. The Royals signed Billy Butler and Joakim Soria to long term deals. At the time of their signings, they were the best position player and pitcher on the team. Alex Gordon will probably sign a long-term deal instead of testing free agency because he's from the Midwest and the Royals have been so good to him. Moore will take a shot at signing Hosmer and Moustakas to long-term deals. They can't sign everyone long-term, but if they can keep a few key players in place for a stretch of time, they can fill the gaps around those players with a consistently thriving farm system.

3) Getting value for the stars they trade away - This is more difficult than it seems. Teams know they can wait and bid on players in free agency instead of giving up prospects in trade. So, they are sometimes not willing to give up top prospects for proven talent. In fact, there's an interesting article on grantland.com that illustrates how teams are beginning to overvalue prospects when compared to major league veterans. Moore has shown he's willing to be prudent when trading top major league talent. He shopped Joakim Soria this offseason, but was unwilling to take anything less than a top of the rotation starter. When he traded Zach Greinke and Yunieski Betancourt, Moore received a top pitching prospect (Jake Odorizzi), a legit center field prospect (Lorenzo Cain), a legit shortstop (Alcides Escobar), and another decent pitching prospect (Jeremy Jeffress). Two of those four players will be starters for the Royals in 2012, and Odorizzi has the potential to be in the rotation in 2013 with a good season this year.

4) Buying low and selling high with free agents - This is another obvious point, but it's more important for small market teams to live by this philosophy. Small market clubs can't afford to throw money around like the Yankees (Carl Pavano anyone?). They need to invest in players who are down and looking for a place to prove themselves again. Small markets are the best place for that. Those types of deals are low risk, high reward. Either the player tanks, and nothing's hurt. Or, the player succeeds, and the club can trade him away for legit prospects or keep him on. Moore provided a text-book example of this with Jeff Francoeur and Melky Cabrera last season. Both were down, so down they were willing to except short contracts for little money to prove themselves to the rest of baseball. Both responded with the best seasons of their careers. Melky was then traded to make way for Cain in center and to bring in Jonathan Sanchez. Think about that. Essentially, the Royals got Jonathan Sanchez for someone no one wanted a year ago. Essentially, they got Sanchez for $1.25 million (definition of a steal). Francoeur stayed on, and helped the Royals bag Jonathan Broxton.

If a small market club does all of these things, it creates a cyclical effect in which a few key pieces keep windows of opportunity open for years while solid players revolve around them, constantly replenished with a terrific farm system.

There are two other keys to operating a effective small market team, in my very humble but completely accurate opinion. They're a little different than the other four. One involves the fans, and the other involves the ownership.

5) Spending when the time is right - At some point, an opportunity to win will present itself to small market teams. When this happens, these teams must be in a financial position to spend money to put themselves over the hump. If the Royals are one player away going into a season, they need the money to buy that player. They can't trade away prospects in-season; the small market formula doesn't allow teams to mortgage the future by trading away good prospects for temporary help. If they do need something in-season, it has to be as insignificant as a reliever, something that won't demand top prospects. But if they need something in the off season and the window is open, they need to find the money to pull the trigger on those pieces when the time is right. This is helped by key #6.

6) The fan base giving ... energy and money - Small market teams don't get huge t.v. deals. Their merchandising doesn't bring in a ton of cash. It's a numbers game really. When only 1 million people live in a city, it's harder for that city to generate revenue when compared to a city of 8 million. That said, if a small market is energized, if people bring friends to games and get excited and buy jerseys and hot dogs and beer, revenue goes up. If revenue goes up, players are easier to sign. It's that simple. If fans remain passionate about their club and that passion spreads, things get better. Money starts flowing in. Free agents are more likely to sign on. Current players are more likely to stay on. Part of the responsibility for winning in a small market falls on the fans. In New York, they can ho-hum their way through games if they want; there are 8 million people waiting for a ticket.  In Kansas City, the whole city must get energized. The Royals average 24,500 in attendance in September in 2011. That's pretty good for a team that was out of contention. I've heard the team's payroll will be around $50 million in 2012, up from $35 million last year. If the ball keeps rolling, i.e. fans keep giving, the payroll could hit a respectable mark for a while. The Royals could find a way to keep their stars and attract others.

It can be done. Small market teams can win. All they need is the right formula. Tampa Bay found it. Minnesota found it for many years, though they slipped last season. From the high level of talent gathered, it looks like Dayton Moore and the Royals may have found it as well. Ultimately, the W-L column will determine that, but the pieces are nearly in place.