Photo credit: https://www.si.com/mlb/baseball-officials-considering-salary-cap-floor-cba-negotiations
We’ve all heard it a million times. “Small market teams in Major League Baseball can’t compete with the big spenders like the Yankees and Dodgers.” Well, that might be about to change. With a collective bargaining agreement set to expire in December 2026, MLB might be looking at instituting a salary cap.[1] And while the players may not be happy about potentially having their earnings capped, it is for the greater good. Having a competitive imbalance where the top teams can outspend the bottom teams by a ratio of 10 to 1 is a recipe for anything but parity.[2] This makes it extremely difficult for small market teams to retain players whom they draft and develop once they are out of their rookie contract.[3] It is no surprise that in a world where 8 out of the last 10 World Series winners were in the top 10 in payroll per year, it is easy for small market fans to become disengaged if they know that they don’t have a chance, simply because they can’t spend as much.[4] Some owners even believe that having a cap will increase franchise values.[5] Part of this disparity comes from lucrative deals that the largest market teams, such as the Los Angeles Dodgers, have with regional sports networks that can provide them with an additional $300 million in revenue per year.[6] This also would make it more convoluted to implement a salary cap because these revenues get calculated into revenue-sharing agreements as part of the concession by the MLBPA and creates a kind of welfare for the bottom-spending teams, which is strongly disfavored by the large market teams.[7]
The players aren’t buying it. The MLBPA believes that putting in a salary cap “is an artificial lever that is the ultimate salary restrictor, independent of where you are on the salary food chain.”[8] The MLBPA sees this as a nonstarter to negotiations, so thisis likely to be a sticking point which could lead to a lockout for the 2027 season if the PA and the owners cannot come to an agreement. The PA points to “penny pinching owners” as the problem in competitiveness, not the owners that spend.[9] However, MLB is the last of the four North American major sports leagues to not have a formal salary cap.[10] Maybe MLB will be the last domino to fall in bringing parity to major league sports. We will just have to wait and see.
[1] https://www.cnbc.com/2025/04/10/mlb-weighs-salary-cap-potential-lockout-looms.html
[2] Id.
[3] Id.
[4] Id.
[5] https://www.cbssports.com/mlb/news/mlbs-state-of-labor-what-to-know-about-2026-cba-including-odds-of-salary-cap-international-draft-lockout/
[6] See supra note 1.
[7] See supra note 5.
[8] https://www.sportspro.com/news/mlb-salary-cap-cba-spending-lockout-rob-manfred-april-2025/#:~:text=The%20league’s%20current%20CBA%20expires,been%20against%20a%20salary%20cap.
[9] Id.
[10] Id.
Leave a Reply