MLB Salary Cap Fight Looms for 2027
The sticking point that could threaten the 2027 baseball season is a salary cap. “They are ready to burn the f—ing house down,” one high-ranking team official told ESPN’s Jeff Passan in an article posted Thursday. The “they” officials were talking about were the owners.
The league says a cap would even the playing field, allowing small-market teams to compete with big ones. The players’ union balks, arguing that competitive balance isn’t the true goal. The owners’ real concern is to increase franchise value. Negotiations are expected to start early in the regular season, but a December lockout is expected. The NFL, NBA and NHL all have caps.
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Over the past five years, the Mets have spent a league-high $1.78 billion, per Passan. The Dodgers are second at $1.71 billion. The Yankees are nearly $200 million behind the Dodgers. At the bottom, the A’s have spent $347 million in the last 10 years. The Pirates, Marlins, Rays and Guardians have also not spent one fourth of what the Mets and Dodgers have.
Evan Drellich of The Athletic looked at how a cap could affect baseball in another article posted Thursday.
The cap would come with a floor, and a source familiar with management’s thinking told The Athletic a reasonable goal for owners could be a $240 million top and a $160 million bottom. The new rules would be phased in over several years, as some teams would need to lower payroll, and others would have to spend more. However, sources told The Athletic that it would be unlikely for owners to look to change existing player contracts. The union would oppose that.
The league and union would have to negotiate how to split MLB’s revenue, estimated at $12.1 billion in 2024. Last summer, MLB commissioner Rob Manfred said the players’ share was 47 percent, and he has told players for years that they would have made more money if they agreed to a system where they shared money equally with owners.
Bruce Meyer, deputy director of the union, told The Athletic that players get more than 50 percent by his calculations, and he is skeptical of Manfred’s claims.
“We don’t know what proposal Rob is referring to, but first of all, it doesn’t make sense on the most basic level,” Meyer said. “If they’re saying, ‘Oh, we’re willing to pay you more,’ then why do they want the system? It’s obviously worth even more than that to them.”
A cap could end deals like the 15-year, $765 million pact the Mets signed Juan Soto to. The league wants a “hard cap” like the one in the NHL, a source told The Athletic. That creates strict limits on player salary, contract length and overall team payroll. But negotiations could end with a “soft cap,” like the one in the NBA, where there is some team payroll flexibility.
A cap could cut the wait times for free agency and salary arbitration, which are now six and three years, respectively. A hike in the minimum salary, currently $780,000, would be up for debate, The Athletic reported. A free agent signing deadline would be likely, which the league wants. Players oppose the idea because they think it could force them into inferior deals, but with a cap, that worry is lessened.
A cap could lead to the end of guaranteed contracts, with salary adjustments dependent on how much revenue the league brings in each year. In the NBA, money sits in escrow until final figures come in. For the 2024-25 NBA season, players had to effectively return nearly $500 million because of declining TV revenue, The Athletic reported. MLB will likely propose escrow. There would likely be more roster churn, like in the NFL, where free agency pushes players under contract out.
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