KC Royals: Will New TV Records Boost Team Revenue?

The KC Royals apparently set a new T.V. ratings record during the May 31st game against the Tampa Bay Rays. According to KSN.com, 158,000 households tuned into the game beating all network affiliates in the KC area.

The KSN.com article goes on to say that the pace of KC Royals T.V. viewership is up 2% in 2016 over the previous record set in 2015.  So at this juncture, lets talk about the Royals current T.V. contract.

The KC Royals are currently in year 8 of an 11 year T.V. deal that pays them $20 million per year through 2019. An article by royalsreview.com shows that only the Marlins have a worse deal that pays $18 million per year.

The top end of the pay scale for T.V. contracts are the usual suspects including the Dodgers, Yankees, Angels, and Mariners who are receiving $200 million, $103 million, $150 million, and $103 million dollars respectively.

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The two time AL Champion and 2015 World Champion Royals though are beating all MLB teams in local market ratings at an average of 12.4 % of households tuning into their broadcasts in the viewing area according to ksn.com.

However, there are far fewer households than some of the larger market teams. In fact only the Reds and Brewers have fewer households in their markets than the Royals at 899k while teams like the Yankees and Dodgers have 7.2 million and 5.4 million respectively. At the same time though, the Brewers T.V. contract in a smaller market is $1 million more per year than the KC Royals and the Reds contract is $10 million more per year.

Of course we all know how bad the Royals were when their current T.V. contract was negotiated losing 90-100 games per year regularly with a history of trading or selling anyone with any talent. So to say they were in no position to bargain would be an under statement and I’m sure at the time the Royals were happy to be carried by a major network like Fox Sports.

The Royals have become a destination in MLB where players want to play

But things have changed. The Royals have had 3 straight winning seasons including two AL championships and a world championship. The Royals have also become a destination in MLB where players want to play, and homegrown talent has already shown they may take a discount to play here.

With much of the core of the KC Royals due to hit free agency following the 2017 season, a new T.V. contract could go a long way in providing the wherewithal to re-sign many of them.  Especially considering the Royals payroll including dead money and injured players is at a record high $138 million for 2016.

As far as what a new contract for the KC Royals would look like is tough to project. There aren’t really any comps who have inked recent contracts to go bye as other teams in the Royals market size have equally old contracts, and haven’t had near the recent success that KC has had.

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If I had to guess though, I would say $50 million per year would be a good bet assuming the Royals can stay competitive beyond 2017.