Details of MLB's proposed salary cap and floor system
Major League Baseball is the only major sports league in North America without a salary cap and salary floor system. MLB is also the only league with payroll disparity between big-market and small-market teams that has grown to more than $400 million from the highest to lowest payroll.
MLB has proposed a seven-year term for a new Collective Bargaining Agreement, one that would include a hard salary cap and salary floor, to level the playing field and address fans’ concerns around competitive balance.
So what exactly is a cap-and-floor system, and how would it work in MLB?
How would a salary cap and salary floor system work?
Under the league’s initial proposal, the 2027 salary cap -- a hard limit on how much a team can spend on its player payroll -- would be set at $245.3 million, while a salary floor -- the minimum each team would be required to spend -- would be set at $171.2 million.
No Club would be permitted to exceed the cap, while all 30 Clubs would be required to comply with the floor. On Opening Day 2026, 10 of the 30 Clubs would have fallen in between the proposed cap and floor.
Based on 2026 payrolls as of Opening Day, 12 Clubs would need to increase their payrolls by a combined $617 million to meet the floor. This required increase in player payroll, in part funded by sharing equally local media revenue among all 30 Clubs, would enable smaller-market Clubs to both retain homegrown stars and be more involved in the free-agent market each year.
The cap figure would require eight Clubs to reduce payroll by a combined $578 million.
Major League players would earn more money under a salary cap and salary floor system
Under the current economic structure, player compensation as a percentage of leaguewide revenue has declined for four consecutive Collective Bargaining Agreements. MLB’s proposal would result in higher compensation in aggregate for Major League players in 2027 than in 2026, and player compensation would grow at the same rate as leaguewide revenue moving forward.
MLB is proposing that players would be guaranteed a 50 percent share of leaguewide revenue, which is consistent with the systems in the NFL, NBA and NHL. None of those leagues have had a work stoppage in the last decade since agreeing to a ~50 percent split of revenue where both sides are incentivized to grow the sport together. As leaguewide revenue grows in the future, so will player salaries throughout the league.
Since 2005, player compensation in the NFL (+252%), NBA (+233%) and NHL (+167%) has grown at a higher rate than MLB player salaries, which are up 135 percent over the same period.
Fans support a salary cap and salary floor system
According to an independent scientific Morning Consult poll conducted in November 2025, 79 percent of “avid” MLB fans and 69 percent of “casual” fans support a salary cap.
Since 2012, MLB has had only one World Series champion come from a bottom-15 market: the 2015 Kansas City Royals. Between the NFL, NBA and NHL, there have been a combined 20 champions from bottom-half markets (NFL 5, NBA 7, NHL 8) since 2012, giving fans in every market the belief that their favorite team can be competitive annually.
For decades, there have been restraints in the Collective Bargaining Agreement with the goal of reducing payroll disparity, including the competitive balance tax system which has been in place since 2003, but they have proven to be ineffective at leveling the playing field.
In 2025, the Dodgers (the league’s highest-spending Club) featured a payroll more than seven times higher than the Marlins, the league’s lowest-spending Club. Under a cap-and-floor system, the largest possible disparity would be 1.4 times from the highest-possible spenders to the lowest.