MLB's latest CBA proposal includes minimum salary increase, free agency revisions

Major League Baseball has accepted the MLB Players Association’s proposal to reduce the amount of service time required to reach free agency for certain players and to eliminate the qualifying offer system as part of a reserve system proposal made to the union on Thursday.

Under the terms of the latest MLB proposal, the period of reserve would be reduced from six years to five years for players 30 years or older. That would be the first period of reserve below six years since the reserve system was introduced in 1976.

The proposal also calls for a historic increase to the minimum salary, a 30% rise in the pre-arbitration bonus pool, advantages for clubs trying to re-sign a “cornerstone player” (similar to the NBA’s “Bird Rights”) and the elimination of deferred compensation.

The proposal is made as part of MLB’s goal of establishing a salary cap and floor to address competitive balance within the sport during the ongoing collective bargaining agreement negotiations.

“The biggest issue baseball fans want solved to strengthen the game is fixing the payroll disparity that leaves too many fans without hope of their team competing for a World Series title,” MLB spokesperson Glen Caplin said in a statement. “Every other major U.S. sport has tackled this problem, and every year more small market teams in those leagues have a chance to win. The salary cap and floor proposal levels the playing field, allowing us greater flexibility to address longstanding player priorities while sharing baseball revenue with the players 50/50.”

Here are details of the major points in MLB’s latest proposal to the MLBPA.

Earlier access to free agency

MLB agreed to the MLBPA’s proposal to reduce the period of reserve from six years to five for players aged 30 and over, meaning that 48% of players with five years of MLB service during the current CBA would have reached free agency a year earlier -- a goal of the MLBPA.

Based on this provision, 354 players on MLB rosters as of June 25 are projected to reach free agency a year earlier.

Under the MLBPA proposal, clubs would be able to re-sign a player with five years of service to a one-year contract with a salary equal to the average of the 125 highest-paid players ($22.025 million in 2026).

The proposed change to free agency would take effect beginning with the offseason following the 2027 season (the first offseason fully covered by the new Basic Agreement). There would not be a phase-in period. Examples of players who would benefit and qualify for free agency one year earlier under this provision include Jarren Duran, Ernie Clement, and Vinnie Pasquantino.

Historic increase to the minimum salary

Under the MLB proposal, the minimum salary would increase by 28% from $780,000 to $1 million in 2027 for players with at least two years of service. Any player with zero or one-plus years of service would receive $1 million if they receive a full year of service ($900,000 minimum salary plus automatic $100,000 service bonus from the pre-arbitration bonus pool).

The 28% increase would be the largest year-over-year increase in the minimum salary in baseball history. MLB calculates that 57% of players on Opening Day 40-man rosters this year would have benefited from this change.

Minimum salaries would grow with the salary cap and floor in future years.

Pre-Arbitration Bonus Pool increase

This bonus pool, which was introduced in 2022 as part of the current collective bargaining agreement, would increase from $50 million to $65 million in 2027, a 30% increase. It would then grow to $75 million by the end of the CBA term.

MLB is also proposing to add a new phase into the pre-arbitration bonus program that would provide a $100,000 bonus to any player starting the year with fewer than two years of service who receives a full year of service (with less than 50% of the year on the Injured List). This pool is paid centrally by MLB.

As a result of this provision, all pre-arbitration players who are in the Major Leagues all season will earn at least $1 million. In 2025, 178 players with less than two years of service would have earned at least $1 million between their salary and bonus.

Elimination of the qualifying offer system

The qualifying offer, which players have viewed as a drag on free agency and was the issue that caused the 1981 work stoppage, would be eliminated under this proposal, removing Draft-pick compensation for the first time since it was implemented in 1976.

During the 2025-26 offseason, 13 players received a qualifying offer. Four accepted it, and one player ultimately re-signed on a one-year contract.

The “Cornerstone Player” advantage

MLB is proposing a system similar to the NBA’s “Bird Rights” that would address the goal of teams being able to retain their superstars.

Any team signing a free agent from another club would be restricted to a contract that covers a maximum of five seasons and a maximum first-year salary of 15% of the cap ($202 million total guarantee for a deal starting in 2027). However, a team signing its own player would be able to offer a contract that covers up to six free-agent years with a maximum first-year salary of 16% of the cap (for a total of $265 million for a deal starting in 2027). Salaries would be permitted to grow by a maximum of 5% in the remaining contract years.

Maximum contract length would apply to free-agent years only, as projected at the time of signing. So players who have not yet reached free agency would still be permitted to agree to longer-term deals (such as the recent extensions signed by Konnor Griffin, Kevin McGonigle and Roman Anthony). The maximum value of these deals would be determined based on the player’s service.

For example, for contracts beginning in 2027:

The maximum contract length and salary provisions are intended to provide an incentive for star players to re-sign with their current teams and help establish long-term bonds between players and fan bases. The goal would also be to prevent circumvention of the salary cap, address player concerns that a disproportionate share of compensation in a cap system would go to the highest-paid players and improve the correlation between pay and performance.

The restrictions are comparable to the maximums allowed in the cap systems of the NBA, NFL and NHL.

Elimination of deferred compensation

No new contract would be permitted to include deferrals. Current contracts that include deferred compensation would be unaffected by this change.

Other provisions in the proposal

• MLB proposed to maintain the status quo with the salary arbitration system but is open to discussing changes to increase compensation for arbitration-eligible players under a new framework that addresses the league’s concerns with the existing system.
• The Prospect Promotion Incentives would be expanded so that PPI-eligible players would yield up to two Draft selections for their club (one in the domestic MLB Draft and another in the proposed international draft).
• When determining whether an eligible prospect will receive a full year of service for finishing first or second in Rookie of the Year voting, foreign professionals who come to MLB would be excluded.