LEVEL THE PLAYING FIELD: HOW IT WORKS

KEY HIGHLIGHTS OF MLB’S ECONOMIC PROPOSAL

Proposed 7-year Term (2027-2033)

A closer look at MLB’s proposal for creating a more balanced economic system — including a salary cap and floor, a 50-50 revenue split, and a new approach to local media rights.

  1. SALARY CAP & FLOOR

  • No Club can exceed the salary cap; all Clubs must comply with the salary floor.
  • Parties to discuss appropriate phase-in timeline & procedures for implementation of the salary cap and floor.

2027 Salary Cap and Floor

(illustrated with 2026 Opening Day CBT payrolls):

  • Salary floor set at $171.2 million - all Clubs must meet the salary floor.
  • 12 Clubs must increase payroll by a combined $617 million 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
Tampa Bay Rays

Chicago White Sox
St. Louis Cardinals
Washington Nationals

Pittsburgh Pirates
Minnesota Twins
Milwaukee Brewers

Athletics
Colorado Rockies
Cincinnati Reds

  • Salary cap set at $245.3 million - no Club can exceed the salary cap.
  • 8 Clubs must reduce payroll by a combined $578 million to meet the salary cap:

Los Angeles Dodgers
New York Mets
New York Yankees
Toronto Blue Jays

Philadelphia Phillies
Boston Red Sox
San Diego Padres
Atlanta Braves

  • Current CBT threshold for 2026 of $244 million is lower than the proposed salary cap.
  • Because the salary cap and floor system creates a more even playing field, MLB will have greater flexibility to address some of the long-standing concerns of Players regarding the Reserve System.

Note: Salary cap and floor figures utilize CBT payrolls, which would continue to include benefit costs consistent with how CBT payrolls are calculated under the status quo (projected to be ~$23 million per Club in 2027).

  2. 50-50 Split of Revenue

  • Players would receive 50% of baseball revenue.
  • Players and Clubs would share equally as revenue grows.
  • No reduction in Major League Player compensation or benefits.
  • MLB players in aggregate will receive more compensation in year one of the system than in 2026.
  • Unlike in other sports, Major League Player Compensation has not kept up with revenue growth. Since 2003, while MLB revenue has grown 247% player payroll has grown at 149%.
  • MLB has proposed the parties retain an independent accountant to verify financials.

Note: The proposed definition of “Baseball Revenue” aligns with the proven approaches used in other leagues. MLB’s offer provides the MLBPA comparable independent audit rights and protections as the unions in the other leagues.

Player Share of League Revenue

NBANFLNHLMLB
49-51%148%50%50%

1 Players in the NBA receive more than 50% of league revenue (up to 51%) when revenue growth exceeds predetermined benchmarks and less than 50% of league revenue (at least 49%) when revenue growth lags predetermined benchmark.

  3. Centralized Media Revenue to Address Blackouts & Revenue Sharing Reform

  • Revenue from all local media will be centralized and shared equally.
  • Centralized media revenues will allow MLB to:
    • Accomplish a top priority for fans to address local market blackouts
    • Increase national exposure for top players and teams
    • Move away from shrinking RSN model
  • Players will receive 50% of any increase in media revenue.

Revenue Sharing:

  • The current Revenue Sharing Plan can be replaced because the centralization of local media rights will reduce revenue disparity among the Clubs.
  • The Commissioner will have the ability to implement a supplemental local revenue sharing system amongst the Clubs to ensure lower-revenue clubs can comply with the salary floor.
  • The MLBPA has argued for decades that the existing Revenue Sharing Plan disincentivizes growth.
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