Before We Get Too Carried Away with the 8-year Project Royals...

Announcers are not sports economists, so I don't hold this too much against Rex Hudler (guest announcer on the Tigers game the other day).

Hudler went on a bit about how the KC Royals should not be such a surprise.  According to Hudler, the team was eight years in the making with careful strategy/moves etc. by sharp management.

No doubt; Kendrys Morales is really coming through for example, and some low-salary pitchers are going great guns so far.

But let's not forget this:

2011- Royals ranked last (30th) in MLB payroll at $36.1M.  They also received $29M in revenue sharing to take into...

2012 - Royals move up to 27th in MLB payroll at $60.9M.  If the increase of $24.8M all came out of previous revenue sharing, that would still leave $4.2 M.  The Royals received $16M in revenue sharing at the end of 2012, so their revenue sharing account now contained $20.2M.  And we're off to...

2013 - Royals move up to 22nd in MLB payroll at $80.5M.  If the increase of $19.6M all came out of previous revenue sharing, that would still leave $600,000.  The Royals received $36M in revenue sharing at the end of 2013, so their revenue sharing account now contained $36.6M.  And we're off to...

2014 - Royals move up again to 19th in MLB payroll at $92M. If the increase of $11.5M all came out of previous revenue sharing, that would still leave $21.1MM.  I could not find any published report of revenue sharing for 2014 (and a quick check with guru Maury Brown - @BizBallMaury - informed me that even devout followers cannot find the data anymore).  But don't let that us stop us...

2015 - Royals move up to 16th in MLB payroll at $113.6M.  The increase was $21.6M.  Given the $21.1M left last year, and given that net sharing to the Royals was surely positive in 2014, it appears a truly trivial amount came out of the 2014 share to get to this payroll level.

So, net revenue sharing proceeds for the Royals more than covered the 33% per annum nominal growth in payroll observed over the last few seasons.

Indeed, nearly all of 2014 net sharing must have gone into other player development expense, since that is required under the CBA and monitored by the Commissioner's office, and reviewable by the players.  At least in the case of the Royals, it looks like revenue sharing has done its job.  [I haven't looked at any other teams and this need not be true in all cases, as many others have argued in terms of "revenue sharing freeloaders" or some such.]

It takes sharp management to get where the Royals are today with pretty close to the median payroll.  But let's not forget that their payroll has dramatically increased, as tempting as it is to attribute it all to outstanding management on and off the field.