Question 1

Is there a competitive balance problem in MLB?

Accepted Answer

- MLB is the only major US sport that had a team last year with a total payroll spend of $515m at the to versus $69m at the bottom. We need to do a better job of ensuring that fans in every market, big or small, can feel their team has a chance to contend in any given year. Over the last decade, MLB's regular season and Postseason have been dominated by large market teams. The correlation between where your favorite team plays and how far they go in the Postseason is clear. Nearly 80% of the teams who reached the LCS, 85% of the teams who reached the World Series, and 90% who won it all came from a top-15 market. Since 2012, MLB has had only one World Series champion come from a bottom-15 market (KC Royals, 2015). Conversely, in the other leagues that have equal opportunity for success regardless of market size there have been a combined 19 champions from bottom half markets (NBA-7, NFL-5, NHL-7).

- Over the last decade, MLB's regular season and postseason have been dominated by large market teams. The correlation between where your favorite team plays and how far they go in the postseason is clear. Nearly 80% of the teams who reached the LCS, 85% of the teams who reached the World Series, and 90% who won it all came from a top-15 market.

- Since 2012, MLB has had only one World Series champion come from a bottom-15 market (KC Royals, 2015). Conversely, in the other leagues that have equal opportunity for success regardless of market size there have been a combined 19 champions from bottom half markets (NBA-7, NFL-5, NHL-7)

Question 2

What about small market spending?

Accepted Answer

- There is no more effective and direct way to ensure low-revenue Clubs spend money on players than a salary floor. Compared to 2026, MLB's proposal would require 12 small market clubs to raise their payrolls and collectively increase their spending by more than $610 million in 2027 to reach the salary floor. While MLB's proposal would address this problem with a salary floor, it must be combined with a salary cap in order to solve the payroll disparity between the high-spending and lower-spending clubs.

- Compared to 2026, MLB's proposal would force 12 small market clubs to raise their payrolls and collectively increase their spending by more than $610 million in 2027 to reach the salary floor.

- While MLB's proposal would address this problem with a salary floor, it must be combined with a salary cap in order to solve the payroll disparity between the high-spending and lower-spending clubs.

Question 3

Are salary caps bad for players because they are an artificial restraint on the market-based system and are intended to hold down labor costs?

Accepted Answer

- Under the current system, the Major League player share has declined for 4 straight CBAs.  Under MLB's proposal, Major League Player Compensation will be higher in 2027 than in 2026 and will grow at the same rate as revenue moving forward. There have been restraints in the Basic Agreement for decades with the goal of reducing payroll disparity, including the collectively bargained luxury tax system in 2003, but they have proven to be ineffective at leveling the playing field.

- Under MLB's proposal, Major League Player Compensation will be higher in 2027 than in 2026 and will grow at the same rate as revenue moving forward.

- There have been restraints in the Basic Agreement for decades with the goal of reducing payroll disparity, including the collectively bargained luxury tax system in 2003, but they have proven to be ineffective at leveling the playing field.

Question 4

Under a salary cap, do superstars get paid and everyone else gets what's left over?

Accepted Answer

- MLB's current system works this way and has produced the greatest salary disparity of the four major sports.

Question 5

If players agree to a cap, will owners will attempt to lower the player share in each negotiation, leading to more work stoppages?

Accepted Answer

- MLB is proposing a 50% player share, consistent with the other leagues.

- None of the other leagues have had a work stoppage since agreeing to a ~50% split of revenue where both sides are incentivized to grow the sport together.

- The NHL player share will be unchanged for at least 17 years; the NBA player share will be unchanged for at least 19 years.

- The NFL share increased in their last CBA. MLB is the only one of these leagues that has had a work stoppage in the last decade. The NHL player share will be unchanged for at least 17 years; the NBA player share will be unchanged for at least 19 years None of the other leagues have had a work stoppage since agreeing to a ~50% split of revenue where both sides are incentivized to grow the sport together.

- The NFL share increased in their last CBA.

- MLB is the only one of these leagues that has had a work stoppage in the last decade.

Question 6

Will the escrow system under a cap mean the end to guaranteed contracts?

Accepted Answer

- All current and future guaranteed contracts will continue to be guaranteed.

- Escrow is simply a mechanism to ensure that players receive exactly 50% of baseball revenue each year.

- The escrow system works both ways - if player compensation is less than 50% of revenue, Clubs would cut a check to players at the end of the year, as has happened in the NBA and NHL.

- We are willing to discuss with the Union ways to minimize the impact of the escrow system on players, including the eligibility of certain groups of players.