Evan Drellich, a terrific reporter for The Athletic, put out a comprehensive report about MLB’s plans to seek out a salary cap and gave us some interesting details about what they might be trying to get done.
Team and league officials describe a cap as an egalitarian reset, a leveling of the playing field that would allow teams in all markets to more fairly compete. To the Players Association, such competitive balance arguments are age-old red herrings, distractions from the owners’ ultimate goal of increasing their franchise values and lining their own pockets.
What I found most interesting about the reporting, however, was less the numbers and cap structure, and more what those numbers reveal about the team. Even more exciting, he got some quotes from people that spilled some beans that had previously gone unspilled, or at least weren’t as explicitly stated previously.
So let’s take some time to break it down, shall we?
Fans “believe” their teams can’t compete
Two different people are quoted in the article as saying that MLB ownership’s desire for a cap stems from fan belief that their teams can’t compete without one. (emphasis mine)
“Every day we hear from fans across the country who believe their team doesn’t have a fair opportunity to compete,” league spokesperson Glen Caplin said in a statement.
Manfred himself said prior to the 2024 World Series, which featured the Dodgers and Yankees, that “our record on competitive balance is darn good.” But more recently, he’s harped on perception, saying smaller market fans worry their teams can’t compete.
I love the way Drellich pairs the two statements in the second quote. It’s all right there; the MLB owners will have him say whatever benefits them most at the moment, even if it contradicts what he just said.
At no point in the article does anyone in the article factually state that the smaller market teams can’t compete. Perhaps Evan simply didn’t include such a quote, but he’s a well-regarded enough writer that I doubt he’d omit such a key piece of testimony if it had been given.
MLB could be seeking a cap of $240 million and a floor of $160 million
It’s right there in Evan’s social media post about the article, and the biggest, most obvious news of the report. An actual range for the cap and floor. But how would these numbers actually affect MLB? Per Yahoo, in 2025, only four teams would have been over the cap, but 15 teams would have been below the floor. FanGraphs has payroll projections for 2026 that have seven teams over in 2026, with 13 teams below the floor. The Royals, despite the perception around the sport that they are spending big for a small market team, are below the floor in both cases.
Notably, there is no mention in Evan’s article of a change in MLB’s revenue-sharing structure. And this is proposed as something of a starting point for the teams. This should immediately tell you that those 13-15 teams could be spending more – in many cases, a lot more – than they are. That wouldn’t be the starting point from the MLB side if it were going to make teams immediately start hemorrhaging money. These teams are currently pocketing the profits for their owners and crying poor because no one is forcing them to do any differently.
Let’s stop and really think about what that additional spending could mean for a moment. Sure, if the Royals spent $200 million, they’d still be a far cry from the Dodgers’ current spending. But the Dodgers wouldn’t actually be spending as much as they are if the smaller market teams were spending more. If the Royals increased their payroll by signing Kyle Tucker to a deal, the Dodgers’ payroll would diminish even as the Royals’ spending increased. The Dodgers wouldn’t go out and spend that same amount of money on some other outfielder because why would you pay Kyle Tucker money to someone who isn’t Kyle Tucker?
The competitive benefit of a cap-and-floor system is in the floor, not the cap. But there’s literally nothing preventing the Royals, Rockies, Pirates, and other low-spending teams from spending more on their rosters right now.
A cap most benefits the richest teams
Drellich has a quote from a management source that outright says this, even as it should be obvious from the previous section:
“The biggest beneficiaries are going to be the biggest markets, and the biggest losers will be the small markets,” said the management source. “They’ll have to spend money in order to be a part of this. And the big markets will do well because there will be no pressure from fans to go to $300-400 million payrolls and so forth.”
This has been one of my biggest peeves about the recent insistence by some that the Dodgers’ spending is spurring more teams to get behind a salary cap. Why would they? The teams that don’t spend don’t care about winning. Or, at least, they don’t care about winning as much as they care about profits. It’s not like any of these teams would go bankrupt if owners chose to lose a few million dollars running them while trying to win championships. Just look at Steven Cohen and the Mets. Or Ewing Kauffman and the Royals. Spending beyond your profits doesn’t guarantee wins, as we can also see in both of those cases, but Kauffman didn’t run out of money, and Cohen doesn’t seem concerned in the slightest about his own net worth.
One of the biggest reasons a salary cap has never been implemented in MLB before is that it isn’t just the players that fight it; it’s a lot of the owners, too. If all of the owners united behind a salary cap, they could probably force the players to capitulate. After all, they need the profits from their teams less than the players need their salaries.
MLB wants to take the most labor-antagonistic features from every other cap system
MLB would apparently seek a “hard” cap in the style of the NHL, which doesn’t allow teams any flexibility to go over it. They would also seek to limit the length and maximum salary of free agent contracts. Then they would like to borrow a concept from the NBA cap, which adjusts player salaries ex post facto based on how much revenue the teams earn:
In some leagues that’s achieved through escrow, putting money aside until the results are in. For the 2024-25 NBA season, players had to effectively give back nearly $500 million amidst declining TV revenues. Sources said MLB will likely propose escrow.
These would mostly harm the very best players more than the people in the middle and lower ends, but don’t imagine that it wouldn’t also affect every player to some degree. If Kyle Tucker is limited to $30 million a year, why should Seth Lugo, who is not half as valuable, get $20 million? And every player would have to give back some portion of their salary if MLB had a season like the NBA with declining TV revenues – oh, that’s right, MLB is already having such seasons.
It’s still very complex in the end
A salary cap is inherently and definitionally an anti-labor policy. Owners can harp about competitive balance all they want, and even if they were correct, it would only be as a side effect. The primary effect of a salary cap is to reduce the maximum earning potential of the laborers in such a system. It’s so anti-labor, in fact, that you could hardly imagine any other industry implementing such a thing, even as labor protections in the United States have gotten weaker over the last 50 years or so.
However, in Drellich’s article, he indicates that MLB would supposedly consider increasing rookie pay and decreasing the amount of time to reach free agency if a cap-and-floor system were instituted. That would clearly benefit labor, especially the weakest members of the labor class who have the least power. The Juan Sotos and Kyle Tuckers would likely have to settle for much smaller contracts, but the Vinnie Pasquantinos would likely see their lots improve. Would it therefore be worth it from a labor perspective to agree to such a compromise? It’s hard to say, especially without clear definitions of how the cap would be defined. What percentage of profits would the cap be pegged to? Would the revenues from nearby real estate development, something more and more teams are pivoting toward, be counted? How much more would the rookies be paid, and how much faster would they reach free agency?
I won’t say that MLB should never institute a salary cap because compromises are a part of life, and if the cap came with enough other concessions from the owners that benefited the players, it would ultimately be worth it. I will say that, given how ownership is already divided about these things, I seriously doubt the concessions would ever reach the level that would become a net benefit to the players.