One day after the MLB Players Association made its opening proposal for the next collective bargaining agreement, the league returned with a plan that includes a salary cap beginning in 2027.
League proposes cap and floor
The league's proposal, reported through ESPN, sets a cap of $245.3 million and a floor of $171.2 million, both measured including benefit expenses. It also calls for a 50-50 split of overall revenue and for local revenues to be pooled and divided equally among clubs.
The record does not need much decoration; it already does the talking.
Because the numbers already fold in items such as pension contributions and health coverage, identifying which teams sit above the cap or below the floor requires a proxy. The competitive-balance tax (CBT) payroll figures—calculated using the average annual value of long-term deals plus the cost of benefits—serve that purpose.
Using Cot's Contracts CBT payroll estimates, nine clubs would likely finish this season above the proposed cap, with the Detroit Tigers checking in at $245.2 million for 2026—just under the line. On the other side, twelve franchises would fall beneath the floor, and the gap totals roughly $18.7 million in player salary adjustments, according to Craig Goldstein's analysis.
Teams currently pay about $23 million annually in benefits, meaning the league's numbers translate to roughly a $222 million cap and a $148 million floor on cash payrolls.
It sounds tidy — until you recall this comes from an ownership group that has resisted a cap for decades, while pointing to competitive balance as the reason.
Union replies with spending incentives
The union's counteroffer includes a “competitive integrity tax” aimed at clubs that do not meet a minimum payroll, an increase of the minimum salary from $780,000 to $1.5 million and a lift of the CBT threshold from $244 million to $300 million. It also seeks higher shares of local broadcast money but a reduced cut of stadium-day proceeds, more revenue sharing for low-revenue clubs that reach the postseason or post winning records, free agency at five years of service for players 30 or older, an expanded draft lottery, penalties for clubs that divert revenue-sharing money away from payroll and draft-pick incentives for aggressive free-agent shoppers. The proposal also eliminates the qualifying-offer system and raises compensation for teams that lose players to free agency.
The two positions remain far apart in both structure and numbers, which is typical early in a negotiation. The current labor deal expires on Dec. 1, setting the stage for a potential owners' lockout—something that happened in the last round, leading to a 99‑day shutdown and delayed the start of the 2022 season.
If the season starts on time, it will be a quieter miracle than any draft lottery.