Major League Baseball owners made their long-expected salary cap proposal to the players’ association on Thursday, a system the union has vowed never to accept, setting the sides on course for a confrontation that threatens the 2027 season and perhaps beyond.
Baseball owners haven’t proposed a firm cap since 1994. Their effort prompted a 7 1/2-month strike that forced the cancellation of the World Series for the first time in 90 years.
The proposal would cap spending in 2027 at $245.3 million, with a salary floor of $171.2 million.
“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,” MLB spokesman Glen Caplin said in a statement. “Further, by sharing media revenue equally as part of our proposal, we can address another top fan concern of local TV blackouts.”
Management gave the union its latest plan during a bargaining session at the commissioner’s office, one day after the union made its economic proposal. Owners say a cap is needed to improve competitive balance and restrain the Los Angeles Dodgers, New York Mets, and other wealthy teams from assembling starrier rosters than their smaller-market brethren.
Players want expanded free agency and salary arbitration rights, along with almost doubling the major league minimum, increasing the money high-revenue teams share with the less-wealthy clubs, and establishing penalties for teams that drop below payroll floors.
Baseball’s current five-year deal, agreed to in March 2022 after a 99-day lockout, expires Dec. 2. While a lockout next winter is expected, talks are not likely to intensify until late February or early March 2027, when the possibilities of losing regular-season games and revenue near. If regular-season games are lost, negotiations may become a standoff of which side can tolerate the most economic loss.
Other U.S. major sports leagues operate under a cap. The NBA had a cap in its initial season in 1946-47, then dropped that and began its modern version in 1984-85. NFL players and owners adopted a cap for the 1994 season, and the NHL did so in 2005-06 after a lockout wiped out the entire 2004-05 season.
The Dodgers shattered MLB’s spending record with a combined $515 million in payroll and luxury tax last year en route to their second straight World Series title. Los Angeles’ total was seven times the $68.7 million payroll of the Miami Marlins, the lowest-spending team, and more than the payrolls of the bottom six clubs combined.
Players say a cap would hurt them and enrich owners, and they say they will never agree to one. Without a cap, MLB stars have landed lucrative, guaranteed contracts that outpace what the biggest stars in other U.S. sports leagues make. Juan Soto’s $765 million, 15-year contract with the Mets is believed to be the biggest ever in team sports and is far greater than the largest deals in the NFL (Patrick Mahomes at $450 million over 10 years) and NBA (Jayson Tatum at $314 million over five years).
MLB’s last salary cap proposal in 1994 offered players a 50-50 split of revenue in a system that would have forced teams to maintain payrolls of 84-110% of the average. Salary arbitration would have been eliminated, and the threshold for free agency would have been lowered from six years’ major league service to four — with the provision that a player’s former club could match any offer until he had six years.
MLB’s offer came on June 14 that year, and players struck on Aug. 12. MLB withdrew the cap proposal the following Feb. 6 after pressure by the National Labor Relations Board. The strike ended on March 31 after U.S. District Judge Sonia Sotomayor — now a Supreme Court Justice — issued an injunction restoring the work rules of the expired labor contract. Two days later, owners accepted the union’s offer to return to work without an agreement. A deal wasn’t reached until 1997.
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