You've heard a lot about the CBA negotiation in Major League Baseball. Let's talk about it.
My name is Morgan Sword. I'm the Executive Vice President of Baseball Operations at Major League Baseball. My group is responsible for the competitive system in baseball, all the different ways that teams compete with each other on and off the field.
We've spent the last couple of years making changes to the game based on fan feedback. We brought in the pitch clock in 2023, which has revived the stolen base and made games 25 minutes shorter. Fans told us they wanted more accurate ball-strike calling, so this season we rolled out ABS challenge, which allows players to correct the handful of big missed calls that happen throughout the game.
So what are fans biggest issues with baseball today? Two things.
One, blackouts. Fans can't watch the games that they want to watch.
And second, the game needs to be more fair. All 30 teams need to be on a level playing field and competing with a similar amount of resources as they put their teams together.
So how did we get here? In Major League Baseball, there's dramatic disparity in terms of what the smallest market teams generate in revenue and what the biggest market teams generate in revenue. And that revenue disparity creates payroll disparity. Those big-market teams have a lot more money to spend on their payrolls and as a result, are a lot more competitive, and they win much more often.
The difference from the top- to the bottom-spending club in baseball is $446 million. That's unthinkable in any other major American sports league. Prior to this year, it had been over a decade since a small-market team last won a World Series. In that time, 16 small-market teams have won championships in the other major US sports.
And you see this gap play out in the free-agent market. The top four clubs this CBA spent more than the bottom 22 clubs combined on free agents. MLB has the widest payroll gap in sports, and it's not even close.
Back in the early 2000s, we implemented a luxury tax aimed at trying to solve this problem. But unfortunately, in the last couple of decades, it's only gotten worse.
So does spending actually buy wins? Over a very long period of time, it's true that the highest payroll clubs simply win more often than the lowest payroll clubs. Since 1998, the top five payroll teams have averaged 89 wins per season, while the bottom five payroll teams have averaged just 74.
There are of course, small-market teams that are able to succeed in the regular season, and we just saw the Milwaukee Brewers win their first World Series in franchise history. But this shouldn't be something that only happens once a decade.
And it's true that year-in and year-out, the big-market teams make it deeper into the playoffs.
Since 1998, the Dodgers and the Yankees have spent more money than the other 28 teams. And sure enough, those are the two teams who have won the most games in that time period.
The Dodgers haven't had a losing season since 2010. The Yankees since 1992. Sure, it's great if you're a Yankee or a Dodger fan, but we believe Major League Baseball's best when all 30 fan bases feel like their team is on equal footing and has a chance to compete.
So having a higher payroll really helps in the regular season, but it's even more important in the postseason. Over the last decade, teams from large markets represent 64 percent of the teams in the postseason, 75 percent of the teams that advanced to the LCS, 85 percent of the teams that reach the World Series and 90 percent of the World Series champions.
One other advantage to having a higher payroll is a margin for error. You can have a top player or multiple players go down with injury and you're going to be OK. But in the smallest markets they lose those big stars -- that could mean the end of your season.
We're proposing to make three major changes to baseball.
First, we enter into a partnership with the players where we split all of the revenues that are generated 50/50 between the teams and the players.
Second, we implement a salary cap and a salary floor that will regulate what each team can spend on its team, which will bring 12 teams higher in spending than they are now and eight teams lower in spending than they are now, and put MLB much more in line with the other major professional leagues in the United States.
And lastly, we're proposing that the revenues from media generated in baseball are shared equally by the clubs. That has two benefits:
First, it will reduce the revenue disparity in baseball and give each team a more equal set of resources to compete with. And secondly, it will finally allow us to address local blackouts, which is something fans have been very frustrated about for a long time.
It's a win for everybody. Players' total compensation goes up and fans get a more competitive game.
A recent independent poll showed that 79 percent of baseball fans support a salary cap and floor in Major League Baseball. All of the other major US sports have implemented both a cap and a floor, and the reason is they go together. Even if you added $50, $60, $70 million of payroll to the smallest-market teams in baseball, without a cap in place, they'd still be multiple hundreds of millions of dollars behind the very highest-spending clubs in MLB.
We're proposing these changes without asking Major League players to pay for it.
Other leagues that implemented salary caps ask their players to take pay reductions in order to get into these systems. We're not proposing that our players will make more money in this system than they did this year. We've proposed historic increases in the minimum salary, access to early free agency for the first time since the 1970s, and the elimination of the qualifying offer system, something that players have wanted for decades.
Our thinking here is that making these changes is going to set baseball up to grow for the next several decades.
Put simply, each generation of kids in each of our markets needs to feel like their team has a real chance to win in order to connect with that team and follow them for a lifetime. It's hard to buy tickets or a jersey when you feel like your favorite player is going to end up in New York or LA one day.
We understand fans are intensely interested in this process. Our commitment to you is that we're going to keep you informed and updated as we go.