The Kansas City Royals have re-signed Seth Lugo for two years at $46 million, setting a franchise record for ERA with their ace staying on the team.

According to MLB.com, the Kansas City Royals are finalizing a multi-year extension with right-handed pitcher Seth Lugo. This guaranteed two-year, $46 million contract will take effect in 2026 and includes an automatic option for 2028 (performance-triggered) — this move completely puts an end to trade rumors surrounding the 35-year-old ace before the deadline.

Contract details reveal that Lugo will earn $20 million for each of the 2026 and 2027 seasons, plus a $3 million signing bonus. If the automatic option is not triggered in 2028, the Royals can exercise a $17 million team option (including a $3 million buyout).

Since joining the Royals as a free agent in 2023, Lugo has posted a 2.98 ERA over 52 starts, setting the best record for pitchers with at least 50 starts in franchise history. Last year, he made his first All-Star appearance and finished second in the AL Cy Young voting, leading the rotation this season with a 2.95 ERA. The original contract included a $15 million player option for 2026, which he might have declined, but the Royals locked in this clubhouse leader early.

Lugo's value extends far beyond the numbers: during his first seven years with the Mets as a reliever, his arm wear was significantly lower than that of peers who started (only 960.2 innings over ten years). After entering free agency in 2022, he proactively transitioned to a starter and demonstrated his capabilities with a 3.57 ERA in 2023 with the Padres. Following the Royals' 106-loss season in 2023, they signed him as a core member of the rotation, and Lugo responded with 206.2 innings and a 3.00 ERA, leading the team to its first playoff appearance in nine years.

General Manager J.J. Picollo revealed last Friday that both sides had a strong desire to re-sign, ultimately facilitating this rare mid-season extension. Despite the Royals currently sitting at 52 wins and 54 losses, four games behind the wild card, and with three other injured starters (including Cole Ragans), retaining Lugo demonstrates that the team has not given up on the 2025 season — re-signing veteran hitters Adam Frazier and Randal Grichuk sends a similar message.

Lugo is set to start at home against the Atlanta Braves on Wednesday, and his presence lays the foundation for the Royals to build long-term competitiveness.