Looking at MLB’s First CBA Proposal as Baseball’s Labor War Has Already Begun
A couple of days ago, MLB released an article titled “MLB makes initial CBA proposal to address competitive balance” aiming to lay the groundwork to introduce a small handful of changes in the upcoming 2026-2027 MLB CBA (Collective Bargaining Agreement). If you have forgotten or don’t know what the CBA is, it is basically just a period of negotiation between the players union and MLB owners. To many people, this article published by MLB.com might not seem like a big deal. However, I believe there is a lot to look at and walk through, and so that’s exactly what I will be doing in this article. I will be reacting to the three changes they proposed and stating how realistic it is that the rules are actually instituted.
MLB says:
“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.”
My thoughts:
You might already know my stance on a salary cap (I don’t want it), but I have liked the idea of a salary floor. However, I don’t see one being instituted without the other. Most of the owners will fight for a salary cap and most of the players will fight for a salary floor and a settlement will be made somewhere in the middle. The proposed salary cap of $245.3 million and the proposed salary floor of $171.2 million are both probably unreasonable. If put in place, the cap would be more like $275 million and the floor would be more like $145 million. One thing I also wanted to mention is that MLB said that teams would be required to comply with limits set. They are not increasing the penalties, they are putting in a hard limit. I think that could be something that is negotiated.
MLB says:
“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.”
My thoughts:
This one is a little bit of a surprise. I don’t think anyone predicted this would be a point of conflict in the 2026–2027 CBA. MLB is essentially proposing a system similar to what the other sports already have in place, where players receive a fixed percentage of league revenue. On paper, that sounds fair. The challenge is going to be defining exactly what counts as “baseball revenue.” Owners and players have historically disagreed on financial transparency, and I expect that to be one of the biggest sticking points in negotiations. If both sides can agree on an independent accounting process, this proposal becomes much more realistic. Unlike a salary cap, I do not think the players will immediately reject this idea. In fact, there is a decent chance they view it as an opportunity to increase their salary. However, it is a little bit weird that players will get 50% of MLB revenue on top of their salaries, and how would the players split the revenue up? There are just a lot of questions.
MLB says:
“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.”
My thoughts:
This proposal would probably face a lot of resistance from big-market teams. Clubs with lucrative local TV deals are not going to be eager to share more of that revenue with the rest of the league. Even so, blackouts have been a major frustration for fans for years, so it makes sense that MLB is looking for a new system. There are still a lot of details that would need to be worked out, especially regarding revenue distribution and streaming rights. Unlike the salary cap proposal, though, this feels like a change that could benefit both the league and its fans. I think it has a reasonable chance of being included in the next CBA, although it would almost certainly be modified during negotiations.
Thanks for reading!