Royals Have a Revenue Problem

The Kansas City Royals do not fall short against teams like the Los Angeles Dodgers and New York Mets because of effort or heart. The Royals fall short because the revenue base that funds the roster is shrinking and unstable, and that structural problem limits payroll, player acquisition, and competitive momentum.

Right now, the Royals and other clubs in similar markets are watching their most predictable revenue stream collapse beneath them, and ownership must confront that reality head-on if Kansas City ever wants to compete beyond occasional playoff appearances.

Royals Don’t Have a Payroll Problem, it’s a Revenue Problem.

The Local TV Model Is Crumbling

The regional sports network (RSN) model that once anchored much of local baseball revenue is a failing problem. Main Street Sports Group, the operator of the FanDuel Sports Network (formerly Bally Sports), is losing money and negotiating rights fees with clubs after reportedly losing hundreds of millions last year. It has a problem making payments to teams, including the St. Louis Cardinals, before the Royals opted out of their contract. That has put revenue projections for teams carried on that network “up “in the air, according to industry reporting.

Major League Baseball teams, including the Royals, terminated their local broadcast agreements with FanDuel Sports Network after the operator failed to secure stable finances or rights fee assurances. ESPN reported that nine clubs ended deals with Main Street Sports Group, choosing flexibility over continued uncertainty.

MLB Is Taking Control of Local Broadcasts to Stabilize the Revenue Problem

MLB is not standing still while the RSN model fails. Commissioner Rob Manfred publicly stated that MLB is ready to produce and distribute local games directly to teams whose broadcast rights are in flux, ensuring that fans will still have access and that clubs won’t be left without distribution.

“No matter what happens, whether it’s Main Street, a third party or MLB media, fans are going to have the games” – Commissioner Rob Manfred, MLB

This shift is not theoretical. MLB’s Media division has already taken over local rights for clubs whose former partners collapsed or declined to renew, such as the San Diego Padres, Arizona Diamondbacks, and Colorado Rockies, on a rolling basis since 2023. Those games stream through direct-to-consumer channels branded for each club.

This tells us two things:

1. MLB has built infrastructure to distribute club games without traditional RSNs.

2. MLB and the Royals still have work to do to turn that distribution into significant, predictable revenue that funds payroll commitments.

The Kansas City Royals Must Treat Media Distribution as a Business, Not an Afterthought

If the Royals’ local games end up produced by MLB Local Media instead of a third party, the team must shift to a commercial mindset. That means selling access, selling sponsorship inventory inside that product, and tying broadcast revenue projections to fan engagement goals. In-market streaming and direct-to-consumer subscriptions are no longer fringe ideas. They are central to the modern baseball revenue model.

Major League Baseball already offers local teams ways to sell direct access through club-branded services like Padres.tv or DBacks.tv after it took back rights from past RSN problems.

Clubs that treat these products as actual revenue lines, not placeholders, will have predictable cash flow to forecast payroll increases.

Media Revenue Drives Payroll, Not the Other Way Around

Local media revenue has historically accounted for a substantial share of team income, in some cases up to 20–30 percent, and predictable rights fees allow clubs to budget long-term payroll commitments without fear of last-minute shortfalls. MLB leadership acknowledged the importance of this revenue problem in January 2026, when it confirmed that teams were ending contracts with an unstable rights holder and considering alternatives.

If the Royals and other clubs can stabilize and grow local media revenue, they create structural payroll flexibility. If they cannot, the payroll gap between mid-market clubs and big-market payroll spenders will remain entrenched.

The Kansas City Royals’ Competitive Future Depends on Solving the Revenue Problem

Ownership under John Sherman and baseball operations under J.J. Picollo face a fundamental choice. They can let the collapse of the old RSN model erode revenue and payroll floor, or they can use the transition to direct distribution as a platform. To compete at the top tier, they must treat the local rights transition as a significant revenue opportunity, since payroll ultimately depends on it.

Kansas City will never match the Dodgers’ or Mets’ absolute payroll overnight. But if the Royals can stabilize local media revenue, actively commercialize direct distribution, and tie media strategy to payroll planning, they create a sustainable foundation for higher payrolls and stronger competitive windows.

That is the revenue problem that really determines whether Kansas City is a contender or a bystander. And that is the problem Sherman and Picollo must solve with urgency.

Main Photo Credits: Peter Aiken-Imagn Images