Royals Sign Seth Lugo To Extension

2:50pm: MLB.com’s Anne Rogers reports that the 2028 option will automatically vest at $20MM if Lugo pitches a combined 335 innings in 2026-27 or totals 190 innings in 2027.  If he falls shy of those totals, the Royals can still pick up a $17MM club option (or a $3MM buyout).  All told, the deal can max out at $63MM from 2026-28.

12:05pm: Seth Lugo has gone from a potential trade candidate to rotation cornerstone, as the Royals announced Monday that he’s signed a two-year extension covering the 2026-27 seasons with a club/vesting option for the 2028 campaign.  The new deal reportedly guarantees him a total of $46MM from 2026-27.  The money breaks down as a $3MM signing bonus for Lugo, $20MM salaries in both 2026 and 2027, and then a $17MM club option for 2028 with a $3MM buyout.  Should Lugo hit the vesting thresholds, that 2028 option will lock in another $20MM salary.  Lugo is represented by the Ballengee Group.

Lugo had the ability to opt out of the final season of his previous three-year, $45MM contract, but instead of facing an opt-out decision this winter, the right-hander will be staying put in Kansas City.  There wasn’t much doubt that Lugo (who turns 36 in November) was going to decline his player option and leave his final $15MM on the table in search of a larger and lengthier guarantee in free agency.

With the Royals also struggling to stay in the playoff race, there was some speculation that K.C. could look to move the veteran prior to Thursday’s deadline.  However, the most recent reporting suggested that not only did the Royals want to keep Lugo beyond July 31, but the club wanted to work out a new contract to convince Lugo to forego his opt-out clause.

Assuming the extension talks indeed cross the finish line, Lugo will join Cole Ragans and Michael Wacha as Royals starters under contract through at least the 2027 season, depending on the specifics of Lugo’s new deal.  Wacha’s three-year, $51MM deal signed last November also came under the specter of a player option, as Wacha had the ability to opt out of his $16MM salary for the 2025 season and test the market.  Ragans inked a three-year, $13.25MM extension last February that was more about cost certainty than team control, as the deal only covers the southpaw through his second arbitration-eligible year — Kansas City still has arb control on Ragan through the 2028 campaign.

Between this trio, breakout rookie Noah Cameron, and the Royals’ remaining year of…