MLB owners officially propose hard salary cap for baseball

Major League Baseball proposed a hard salary cap Thursday for the first time since 1994, which resulted in a players’ strike that cancelled the World Series, in their first proposal to the MLB Players' Association in New York.

MLB proposed a $245.3 million salary cap, including benefits, which is lower than eight current MLB clubs’ payroll, requiring a total reduction in payroll of $578 million.

In return, MLB proposed a $171.2 million salary floor, which would require 12 teams to increase their payroll by a combined $617 million.

In the last collective bargaining talks in 2021, MLB offered a four-tier luxury tax system beginning at $180 million, with also a salary floor at $100 million. It was flatly rejected by the union, and MLB implemented a lockout that lasted 99 days.

In this proposal, MLB said that players would immediately receive 50% of baseball revenue and in future years. MLB revenue has increased by 247% since 2003, according to MLB calculations, while player payroll has increased by 149%.

The salary cap, MLB insists, would increase competitive balance in the sport.

“Ultimately the game is about hope and competition and too many fans in too many markets have too little hope their team has a fair chance to win," MLB spokesman Glen Caplin said in a statement. “Fans overwhelmingly support a salary cap and floor like in the other leagues because they don't believe a $446 million spending gap from top to bottom is a fair fight.

"Our salary cap and floor proposal levels the playing field while sharing baseball revenue with the players 50/50 as we grow the game together. Further, by sharing media revenue equally as part of our proposal, we can address another top fan concern of local TV blackouts. We look forward to working with the MLBPA during the bargaining process to continue improving the game for the fans.”

The union argues that competitive balance isn’t a problem considering that small-market clubs like the Milwaukee Brewers, Tampa Bay Rays and Cleveland Guardians are currently leading their respective divisions. The Brewers, who reside in baseball’s smallest market, won the most games in MLB last season with 97, while winning the NL Central division for the third consecutive year.

MLB’s proposal also said that all revenue from local media will be centralized and shared equally among clubs while players will receive 50% of any increase in future media revenue with the national TV contracts expected to expire after the 2028 season.

In its response on Thursday, the union said a salary cap system is "something generations of players have fought against."

"The last time the owners made such an explicit push for a cap – over 30 years ago – it led to the longest work stoppage in MLB history. For generations, our members have fought against cap systems because they harm players at all levels, erode or eliminate contractual guarantees, pit player against player, lead to more work stoppages, not less, and get worse for players over time. Caps don’t lower ticket prices for fans, eliminate tanking or ensure teams are run with equal competence. They suffocate competition by offering owners an all-purpose excuse for inaction and mediocrity," the MLBPA said.

"Baseball is experiencing unprecedented momentum and owners are enjoying record viewership, revenues and franchise values.  Billionaire owners are not seeking to cap their profits or asset values, only player salaries. This isn’t out of generosity or a desire to protect the game’s well-being. It’s a play to control costs, increase profits and maximize franchise values – all at the expense of players past, present and future."

The CBA is scheduled to expire on Dec. 1, and if no agreement is reached, MLB is expected to implement another lockout.