KC Royals reportedly moving closer to key Seth Lugo decision (with contract wrinkle)

As July 31 inches closer and closer each passing day, teams will be gearing up to execute their trade deadline strategies. Some will be looking to poach that key upgrade to bolster their postseason chances, while others will be looking to accelerate a rebuild by selling off their expendable assets.

Where do the Kansas City Royals fall on this spectrum? You're guess is as good as mine, as even in the second week of July, their official direction has yet to be revealed.

However, that decision will have to come sooner rather than later with time running out and when it does, it will likely dictate the fate of their All-Star caliber starting arm in Seth Lugo. And as USA Today's Bob Nightengale reported over the weekend, there should be no shortage of interest in the veteran right-hander across the league.

KC Royals reportedly moving closer to key Seth Lugo decision

Nightengale mentions that how the Royals perform the next few weeks could determine just how available Lugo is on the trade market.

"Teams are starting to closely scout Kansas City Royals starter Seth Lugo...believing that if the Royals are out of the race, he’ll definitely be placed on the trade block," Nightengale wrote.

The big factor in the Lugo trade conversation that it's his uncertain future with the ball club that seems to be powering a potential deal, as a 2026 player option could mean this is his final season with the Royals. Nightengale also went on to shed some light on where Lugo might stand on that contract decision.

"Lugo, in the middle of a three-year, $45 million contract, has an opt-out after this season that he’d likely exercise instead of returning for $15 million in 2026," he wrote.

The decision to opt out makes all the sense in the world from Lugo's perspective. He surpassed all expectations in 2024 by managing to finish as the AL Cy Young runner-up after posting a 3.00 ERA and 1.09 WHIP. He's then followed that up with a potentially even better season in 2025, as through his first 16 starts he's sporting a 2.65 ERA and 1.09 WHIP.

These are numbers that despite his age - he'll be 36 next season - are certainly warranting of a higher salary than $15 million. A good example of this is Nathan Eovaldi in Texas, as after a series of solid years with the Rangers, the 35-year-old was rewarded with a three-year, $75 million contract this past winter.

The key to any potential Lugo deal ultimately falls with the Royals' on-field performance. And as it stands right now, all of this speculation could be rendered moot, as Kansas City is playing some good baseball to start the month. Since July 1, they're 5-2 meaning if they hold this pace, J.J. Picollo and Co. might be willing to forgo a Lugo trade and look to add rather than subtract if it means a chance at a second-consecutive postseason berth.