FACT SHEET: TRANSITION PROPOSAL

Major League Baseball spokesman Glen Caplin released the following statement today regarding Collective Bargaining:

“We recognize that clubs will need a full offseason to prepare to operate within the cap and floor system. Therefore, with this offseason already underway, we proposed today to begin the cap and floor system in 2028. This proposal would allow a smoother transition into the cap and floor system without delaying key player benefits, including earlier free agency, a $1 million minimum salary, a 30% increase to the pre-arbitration bonus pool, and transactional reform that will reduce roster churn. The projected salary cap and floor for 2028 continues to provide more money for major league players while leveling the playing field and giving more teams the ability to participate in the free agent market and retain their homegrown stars so that every fan believes their team has a fair chance to win it all.”

Key Highlights of MLB’s Transition Proposal

1. Salary Cap and Floor to Be Phased in Starting 2028

• In light of the facts that Free Agency has already begun, some Clubs have existing commitments that place their 2027 payrolls near or above the proposed Salary Cap, and many Clubs would need to dramatically increase payroll this offseason to comply with the proposed Salary Floor - MLB proposed implementation of the salary cap and floor to begin in 2028. This will provide provide Clubs with sufficient time to manage their payrolls into the proposed Payroll Range and avoid a significant disruption to the free agent market.
  • Projected 2028 Salary Cap and Floor:
    • $180.2 million Salary Floor - all Clubs must meet the Floor
      • 12 Clubs must increase payroll by a combined $636 million (based on 2026 CBT payrolls) to meet the floor. More Clubs will be in the market for free agent players and be able to retain homegrown stars:
        • Miami Marlins
        • Cleveland Guardians
        • St. Louis Cardinals
        • Tampa Bay Rays
        • Washington Nationals
        • Chicago White Sox
        • Minnesota Twins
        • Colorado Rockies
        • Pittsburgh Pirates
        • Athletics
        • Cincinnati Reds
        • Milwaukee Brewers
    • $258.2 million Salary Cap - no Club can exceed the Cap
      • 8 Clubs must reduce payroll by a combined $528 million (based on 2026 CBT payrolls) to meet the cap:
        • Los Angeles Dodgers
        • New York Mets
        • New York Yankees
        • Philadelphia Phillies
        • Toronto Blue Jays
        • San Diego Padres
        • Boston Red Sox
        • Chicago Cubs

Note: Salary cap and floor figures utilize CBT payrolls, which would continue to include benefit costs (and exclude signing bonuses to amateur players) consistent with how CBT payrolls are calculated under the status quo.

• Under MLB’s proposal, the current revenue sharing plan and Competitive Balance Tax would be used in 2027 before transitioning to sharing baseball revenue with the players 50/50 and centralizing media revenues in 2028.
• MLB would agree to allocate the players’ share of 2026 CBT proceeds (normally used to fund contributions to players’ 401(k) accounts in future seasons) to players as a bonus based on service accrued in 2026 ($285,000 to each player that received a full year of service, $213,400 to any player with three quarters of a year of service, $142,300 to any player with half a year of service, and $71,100 for any player with a quarter year of service).
• MLB is willing to discuss additional appropriate phase-in timeline & procedures for implementation of the Salary Cap and Floor.

2. Originally Proposed Reserve System and Transactions Improvements Continue to Begin in 2027

Earlier Access to Free Agency

• MLB will accept the MLBPA’s May 27 proposal to reduce the period of reserve to 5 years for 30-year-old players (subject to the Club’s right to sign the player to a one-year contract with a salary equal to the average salary of the 125 highest-paid players), decreasing the reserve period below 6 years for the first time since it was introduced in 1976.
  • 48% of 5 MLS players would have reached free agency a year earlier under this provision during the past CBA.

Eliminate Draft Pick Compensation

• MLB will accept the MLBPA’s May 27 proposal to eliminate the Qualifying Offer system (i.e., signing a free agent will no longer require a team to forfeit draft picks).

Increases to Minimum Salaries

• MLB will increase the minimum salary from $780,000 in 2026 to $1,000,000 in 2027 for players with at least two years of service and $900,000 for players with less than 2 years of service.
• Players with less than 2 years of service will also earn at least $100,000 under the Pre-Arbitration Bonus Program, bringing their total compensation to at least $1,000,000, if they receive a full year of service (and spend less than half the season on the IL).
• The increase of the minimum salary to $1,000,000 would be the largest year-overyear increase in the minimum salary in Baseball history (and is about $100,000 higher than the previous largest increase).
• In future years, the minimum salary will increase with growth in the Cap and Floor.

Increases to the Pre-Arbitration Bonus Program

• MLB will increase the Pre-Arbitration Bonus Pool by 30% from $50 million in 2026 to $65 million in 2027 and grow the Pool to $75 million over the term of the CBA.

Accrual of Major League Service / PPI Selections

• MLB will add PPI Selections in the International Draft and allow eligible prospects to earn their Club up to two selections in their career (one Domestic and one International), further incentivizing Clubs to add top prospects to the Opening Day roster.
• MLB will accept the MLBPA’s proposal to exclude Foreign Professionals when determining whether an eligible prospect will receive a full year of service for finishing first or second in the Rookie of the Year voting (provided the eligible prospect otherwise finishes in the top 3 in the Rookie of the Year voting).

Changes to Make it More Difficult to Send Players to the Minor Leagues/Reduce Roster Churn

• Reduce number of times a player can be optioned in a season from 5 to 4.
• Eliminate the 4th option.
• Prohibit Clubs from optioning or outrighting a player during the playing week by implementing weekly rosters.
• Restrictions on Club’s ability to cycle a player on and off the 40-man and Active rosters throughout the season for strategic reasons.

Changes Intended to Result in Quicker Promotions to the 40-Man Roster

• Require that Clubs add players to the 40-man Roster a year earlier to prevent them from being eligible for the Rule 5 Draft.
• Incentivize Clubs to add players to the 40-man Roster by allowing the claiming Club in the Rule 5 Draft to option the player to the minor leagues.

Note: All other elements of MLB’s original economic proposals, including the “Cornerstone Player” rules, would go into effect immediately