The Financial Implications Of Hosmer’s Promotion

Eric Hosmer is hitting like someone who deserves to play in the Major Leagues. You don't put up a .439/.525/.582 line as a 21-year-old at Triple-A unless you're pretty talented, so the Royals are rewarding Hosmer’s ability and performance with a spot on the big league roster.

Not only does the decision make a difference for the current Royals team, it has implications for the future, since Hosmer may now go to arbitration four times, instead of the usual three.  An extra year of arbitration could cost the Royals millions, but GM Dayton Moore told's Buster Olney that "right now, he helps us put the best team on the field that we can."

Here’s a detailed breakdown of what Hosmer’s callup means for future Kansas City teams:

The current outlook:

  • Service time after 2011 – 0 years, 146 days
  • Number of arbitration years – 3 or 4
  • Additional earnings through arbitration – four years of arbitration could mean $5-15MM in additional earnings
  • Hits free agency – after 2017

What an early June callup would have meant:

  • Service time after 2011 – 0 years, 116 days
  • Number of arbitration years – 3
  • Additional earnings through arbitration – none
  • Hits free agency – after 2017

Hosmer will pick up 146 days of service time this year if he’s not optioned back to the minors. Recent history suggests that will be enough for super two status after the 2013 season, assuming he picks up full years of service time in ’12 and ’13.

However, there’s no guarantee that the Royals will be stuck paying the former third overall selection for an extra year of arbitration. Early projections for the upcoming super two cutoff place the minimum at two years and 146 days, a couple of weeks more than usual. 

Every year is different and it’s far too early to predict how much service time players will need to qualify as super twos after 2013, but it’s possible that two years and 146 days (Hosmer’s pace) won’t be enough. It’s also possible that the Royals will option Hosmer to the minor leagues, where he wouldn’t collect MLB service time. 

Though there’s now a distinct possibility that the Royals will go to arbitration four times with Hosmer and pay him millions extra in the process, too many variables – possible demotions, unknown cutoff dates, the upcoming Collective Bargaining Agreement – exist for anyone to say with certainty that Moore made a poor financial decision by calling on the top prospect when he did.

12 Responses to The Financial Implications Of Hosmer’s Promotion Leave a Reply

  1. What does this promotion mean for Kila?

    • It means he goes back to Omaha and works on hitting breaking balls low and away, and leveling out his swing. It doesn’t take ML scouts and pitchers long to tell you exactly what your weakness is. KK can make the adjustment, and he’s still an important part of the team. It is VERY likely that the same thing happens to Hosmer, and they trade places again for awhile. But once Hosmer makes those adjustments and comes back up, he is clearly the better player offensively and defensively. He’s going to be a star in a year or two. He’s 21 and KK is 27. The team needs both right now, but eventually KK gets traded because he’s not athletic enough to become an OF’er, and we have a ton of OF talent already. Good chance he gets swapped for a top catching prospect at some point, the only thing the organization has a need for.

  2. burtonlive 4 years ago

    Moore will never win with the media, every decision he makes is a mistake it seems. I love that they called him up before the deadline. When you’re looking to win then finances can wait until later and we all know the Glass family has been pocketing enough cash for years to help pay for him down the road.

    • $1519287 4 years ago

      I’m not saying it’s a mistake… just pointing out what it means/might mean :)

      – BNS

    • Dayton Moore, Ned Yost and an the Glass family made a baseball decision. And a good one. While it’s true the Glass family has operated at a profit recently, it is not fair to assume that they did so to make money. I firmly believe that money was saved to try and keep the best players down the road. Spending any more the last few years would have not made any significant difference. And to be fair, they spent the money, just not on ML salaries. They put it into draft picks, added a minor league team, added a Dominican academy, beefed up scouting and player development. and oh look…who has the best farm system in baseball in the last 20 years and are poised for a 10 year run?

  3. Guest 4 years ago

    Look the AL Central right now is topsy turvy. The Clevelands and KCs of the world have a chance at winning. So why not? I like to see these smaller market teams doing well. The fans in these cities have to have something to root for.

  4. Lunchbox45 4 years ago

    Baseball should change the rules to allow for more teams to not have to decide based on finances if they want to call up stars..
    Great on the Royals for doing this, but it is unfortunately not status quo.

    Which is unfair to the paying customers who end up having to watch bums and hacks take AB’s while young and budding stars are stashed away in the minors.

  5. robdeer 4 years ago

    This assumes the current CBA / Super 2 structure is in place … not a real sound assumption IMHO. It is at least worth mentioning that the Royals may be banking, in part, on the likelihood that the rules will have changed by the time arb is rolling around for Hosmer.

    • $1519287 4 years ago

      I did mention that.

      – BNS

      • robdeer 4 years ago

        I stand corrected. I do suspect that potential CBA chagnes are more front-and-center to this, though — neither the players or the teams gain from a system where prospects are held down for the first two months of a season for financial reasons, so it’s an area that seems ripe for revision.

  6. All this is based on the royals not ruining him.

    A long shot, to be sure.

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