How the Salvador Perez extension will change Royals' 2026 payroll

Earlier this week, the Kansas City Royals stole headlines when the extended their captain and franchise legend Salvador Perez to a brand new two-year contract.

While the deal is worth $25 million, Perez isn't just getting paid the traditional $12.5 million AAV you might think. Like many MLB contracts today, there are several wrinkles that alter the true value of what will be on the books in 2026 and 2027.

We'll dive into the specifics momentarily, but what Royals fans need to know is that this extension gives them even more wiggle room in an offseason where it's critical that they maximize the budget to get back to postseason contention.

Royals new contract with Perez helps open some financial doors this winter

Before this deal was made, the Royals held a club option on Perez for 2026 worth $13.5 million, so there was no question that he'd be back in the lineup for the upcoming season.

But by making the deal, not only does Perez end up getting $25 million over two years, rather than $13.5 million over one, the inner-workings of the contract and how that $25 million is paid out does wonders for a smaller market organization with contending aspirations like Kansas City.

As Anthony Franco of MLB Trade Rumors outlined, the deal is chalked full of bonus money and deferrals. Right off the top, $7 million of the deal is a signing bonus which the Royals won't have to pay until 2030 to 2034. Then, there's the $5 million in deferred money which will be spread equally across the two year term and like the bonus, won't be a financial concern for the Royals until that 2030-2034 term.

This leaves $13 million to spread between the two seasons in present value, meaning the Royals are now only allocating $6.5 million from their 2026 budget on Perez.

This is much cheaper than a $13.5 million price tag like he would have carried if the Royals were to simply exercise his club option.

As I alluded to earlier, an extra $7 million in savings could go a long way for small market contender with as many needs for 2026 as Kansas City has - or perhaps for some longer term needs like a Vinnie Pasquantino or Maikel Garcia extension.

Whether it be the corner outfield, second base or some added oomph in the bullpen, the list of areas in need of an upgrade is plentiful and J.J. Picollo and the Royals' front office just gave that extra bit of walking around money to make life a little bit easier this offseason.