Royals Rumors

4:17pm: The Royals have issued a press release confirming the agreement.

11:31pm: Royals owner David Glass has agreed to sell the team to Kansas City businessman John Sherman for a sum of one billion dollars, USA Today’s Bob Nightengale reports (via Twitter). Sherman, currently the vice chairman of the division-rival Indians, will divest himself from the Cleveland organization once the agreement is ratified by the other 29 ownership groups in November. Talks of a potential sale were first reported by Ken Rosenthal and Jayson Stark of The Athletic earlier this week.

Nightengale tweeted yesterday that the sale of the Royals was motivated by health reasons for Glass, 83. The former CEO of Wal-Mart, Glass purchased the Royals for the sum of $96MM back in 2000. He was responsible for appointing Dayton Moore as the club’s general manager — a decision that resulted in a lengthy rebuild but ultimately culminated in consecutive World Series appearances, including the team’s drought-breaking World Series win over the Mets in 2015.

Sherman, 64, purchased a minority stake in the Indians back in 2016 and has since upped his share of the club. As Terry Pluto of the Cleveland Plain Dealer explored last year, Sherman was a Royals season-ticket holder at the time who’d made a fortune in starting natural gas and energy companies (LPG Services Group, Inergy L.P.) and selling them to larger entities. Indians majority owner Paul Dolan referred to Sherman as his “partner” in that interview with Pluto, underscoring his prominence in that ownership group. Suffice it to say, today’s reported agreement has ramifications for both organization — the specifics of which remain to be seen.

The Royals, under Glass and Moore, have been in the midst of a rebuild over the past couple of seasons. The organizational hope has been that by targeting near-MLB-ready players in trades and prioritizing college players (pitchers, specifically) in the past couple of drafts, that retooling can progress at a considerably more rapid pace than Kansas City’s prior rebuilding effort. The Royals have cut payroll by nearly $50MM in that time and figure to see further dollars stripped from the books this season with Alex Gordon’s four-year, $72MM contract coming off the ledger.

As with any ownership change, the effects could be far-reaching. Recent examples of team sales highlight but a fraction of the possibilities. The Padres, for instance, hired new front-office leadership (headed by GM A.J. Preller) and embarked on an aggressive, win-at-all-costs approach in the first season that the group led by Ron Fowler and Peter Seidler took over the club. When that boom or bust approach fell well short, the Friars embarked on a lengthy rebuilding effort that has yet to reach its terminus.

More recently, Jeffrey Loria sold the Marlins to a group led by billionaire Bruce Sherman and future Hall of Famer Derek Jeter. While Sherman and Jeter added some new front office personnel — most notably, longtime Yankees exec Gary Denbo — their group also retained president of baseball operations Michael Hill and manager Don Mattingly. A long-term approach headlined by the trades of Giancarlo Stanton, Christian Yelich and Marcell Ozuna was nevertheless put into motion in the Sherman/Jeter group’s first season in place.

What the sale of the club remains for the Royals, of course, can’t be immediately known. Moore is not only among the game’s longest tenured baseball operations leaders, he’s also widely respected by colleagues and peers alike. His contract reportedly runs through the 2020 season. Manager Ned Yost, meanwhile, is signed only through season’s end. There’s been plenty of speculation about the 65-year-old Yost’s future, particularly in the wake of a near-fatal accident last offseason in which he shattered his pelvis upon falling out of a deer stand while hunting. The general belief has been that Yost is in excellent standing with the organization, but the skipper himself has previously hinted that he may not manage beyond his current contractual agreement.

Payroll mandates and the corresponding roster-construction implications for both the Royals and the Indians that stem from the ownership change will play crucial roles in steering both organizations’ immediate futures.

Aug. 28: MLB Network’s Jon Heyman tweets that “barring something unforeseen,” the sale from Glass to Sherman “will happen.” That certainly moves the ball forward from yesterday’s uncertainty regarding the seriousness of the talks, although it also suggests that no firm agreement is in place. Sherman, notably, would need to be approved by the other 29 ownership groups in the league and by MLB itself, though Heyman adds that Sherman is viewed as a “sure thing” for approval from the league (as one would expect from an executive who is already an established minority owner of another franchise).

Aug. 27, 6:20pm: The Royals have issued the following statement on the matter:

“The Kansas City Royals are not in a position to make any comments on the published speculation regarding any potential sale of the ball club. The Royals will make no further statements at this time.”

5:35pm: Royals owner David Glass is discussing a potential sale of the club with Kansas City businessman John Sherman, Ken Rosenthal and Jayson Stark of The Athletic report (subscription required). ESPN’s Jeff Passan tweets that the two are discussing a price worth north of $1 billion. Glass purchased the Royals in 2000 for a reported sum of $96MM.

Sherman, 64, is currently the vice chairman of the division-rival Indians, having purchased a minority stake in the team back in 2016. As Terry Pluto of the Cleveland Plain Dealer explored last year, Sherman was a Royals season-ticket holder at the time who’d made a fortune in starting natural gas and energy companies (LPG Services Group, Inergy L.P.) and selling them to larger entities. Sherman would, unsurprisingly, divest himself from the Indians organization if a sale is indeed agreed upon (per Passan).

There’s no indication that the two parties are close to an agreement, nor is there any indication that Glass is exploring other sale possibilities in the event that a deal with Sherman cannot be brokered. Asked about the report, general manager Dayton Moore told MLB.com’s Jeffrey Flanagan (Twitter link) that commenting on any potential sale of the club would be “inappropriate.” Glass has not publicly acknowledged the reported negotiations.

Under Glass and Moore, the Royals emerged from irrelevance to appear in consecutive World Series, culminating in a 2015 championship achieved by the core of Salvador Perez, Eric Hosmer, Mike Moustakas, Lorenzo Cain and Danny Duffy. But the Royals have faded from contention in the American League Central in recent seasons and acted to cut payroll in each of the past two offseasons. Though the team was reportedly willing to sign Hosmer to a nine-figure deal to lead the club through the current rebuild, he took a more lucrative offer in San Diego while other stalwarts of that 2015 club have signed elsewhere in free agency or been traded.

The Royals’ Opening Day payroll in 2017 reached the unprecedented (for them) peak of $143MM, but since that time the figure has plummeted rapidly. Kansas City opened the 2019 season with a payroll a bit greater than $96MM, and with Alex Gordon set to come off the books, they have just $59MM in guaranteed salary on next year’s payroll. Offseason trades involving veterans such as Duffy, starter-turned-closer Ian Kennedy, quiet superstar Whit Merrifield or breakout slugger Jorge Soler could further reduce that commitment, though it’s not yet clear how motivated the Royals will be to make any such moves.

Moore has been targeting near-MLB-ready assets in trades and college pitchers in the draft in hopes of architecting a quick turnaround, though certainly a sale of the club could impact not only the offseason direction of the team but the very composition of the front office and the field staff. Flanagan reported within the past week that the Royals are nearing a new television contract with Fox Sports Kansas City, which would more than double their annual rights fees (albeit from an average of $20MM per year to $48-52MM per year), and such an agreement would obviously impact the financial evaluation of the franchise and its baseball operations directives as well.