Major League Baseball extended an initial economic proposal for a new collective bargaining agreement to the MLB Players Association on Thursday, introducing a number of changes, including a salary cap and floor that the league believes will address competitive balance within the sport.
"Baseball has gotten stronger because we listened to the fans and made necessary changes on the field, like the pitch clock, to quicken the game and ABS Challenge to get the most important calls right,” MLB spokesman Glen Caplin said in a statement. “The biggest issue we need to solve next to continue to grow the game off the field is fixing the payroll disparity unseen in any other major U.S. sport. Ultimately the game is about hope and competition and too many fans in too many markets have too little hope their team has a fair chance to win.
“Fans overwhelmingly support a salary cap and floor like in the other leagues because they don't believe a $446 million spending gap from top to bottom is a fair fight. Our salary cap and floor proposal levels the playing field while sharing baseball revenue with the players 50/50 as we grow the game together. Further, by sharing media revenue equally as part of our proposal, we can address another top fan concern of local TV blackouts. We look forward to working with the MLBPA during the bargaining process to continue improving the game for the fans.”
The proposal is for a seven-year term that would begin in 2027 and extend through 2033. A salary cap and floor, 50-50 split of revenue, and addressing the issue of blackouts through centralized media and revenue sharing reform are among the highlights of MLB’s proposal.
Salary cap and floor
In this proposal, MLB would install a salary cap and floor, with no club permitted to exceed the cap and all clubs required to comply with the floor.
In 2027, the salary floor would be set at $171.2 million, meaning that 12 teams would be required to increase payroll by a combined $617 million to meet the floor, enabling more clubs to pursue free-agent players and retain their homegrown stars.
Those 12 teams, based on 2026 Opening Day payrolls, are the Marlins, Guardians, Rays, White Sox, Cardinals, Nationals, Pirates, Twins, Brewers, Athletics, Rockies and Reds.
The salary cap for 2027 would be $245.3 million, meaning that eight clubs – the Dodgers, Mets, Yankees, Blue Jays, Phillies, Red Sox, Padres and Braves – would be required to reduce payroll by a combined $578 million. Salary cap and floor figures would utilize Competitive Balance Tax payrolls, which include benefit costs consistent with the current format (projected to be approximately $23 million per team in 2027).
The proposed salary cap would be slightly higher than the current CBT threshold, which stands at $244 million. According to the league, the salary cap and floor system would create a more even playing field, giving MLB greater flexibility to address some of the players’ long-standing concerns regarding the Reserve system, which ties a player to the club that originally signed them for the first six years of their Major League career before they are eligible for free agency.
Over the past decade, MLB’s regular season and postseason have been dominated by large-market teams, with nearly 80% of teams in the League Championship Series, 85% of teams in the World Series, and 90% of teams to win a championship have come from a top-15 market.
Since 2012, only one team from a bottom-15 market has won a World Series (the 2015 Royals), while the NFL (5), NBA (7) and NHL (7) have all seen smaller-market teams win it all under salary cap systems.
50-50 split of revenue
Under the league’s proposal, players would receive 50 percent of baseball revenue, enabling players and clubs to share equally as the sport’s revenue grows. There would be no reduction in compensation or benefits for Major League players under the proposal, and they would receive more compensation in aggregate in 2027 than they are currently receiving this season.
According to MLB, player compensation has not kept up with revenue growth the way it has in other sports. Since 2003, the league’s revenues have grown 247%, while player payroll has grown 149%.
The league is proposing that both MLB and the MLBPA retain an independent accountant to verify the financials. The proposed definition of “baseball revenue” matches the approaches used in other leagues, providing the MLBPA with comparable independent audit rights and protections as the unions in the NBA, NFL and NHL.
NBA players receive between 49-51% of revenue based on predetermined benchmarks outlined in the CBA. NFL players receive 48% of revenue, while the NHL splits revenue 50-50 with its players, similar to what MLB is currently proposing.
Under this proposal, all current and future guaranteed contracts will continue to be guaranteed, resulting in no changes for players already signed beyond 2026.
Addressing blackouts through centralized media and revenue sharing reform
The league’s proposal would centralize revenue from all local media, sharing it equally among all 30 teams.
MLB believes this change will accomplish a top priority for fans by addressing local market blackouts while also increasing exposure for players and teams. Players would receive 50% of any increase in media revenue under the current proposal.
The league’s current revenue sharing program – which the MLBPA has long argued disincentivizes growth – would be replaced, as the centralization of local media revenue would reduce revenue disparity among the 30 teams.
The Commissioner would have the ability to implement a supplemental local revenue sharing system among teams to ensure lower-revenue clubs can comply with the salary floor.