MLB considering salary cap amid spending gap and potential 2026 lockout
From CNBC: 2025-04-10 06:00:00
Major League Baseball is considering adopting a salary cap as the current Collective Bargaining Agreement is set to expire in 2026. This move could potentially lead to a lockout in December of next year, as the MLBPA remains opposed to a salary cap. The spending gap between teams has widened, with the highest spender, the New York Mets, shelling out $323 million compared to the lowest spender, the Miami Marlins, who are spending just over $67 million.
MLB Commissioner Rob Manfred has acknowledged the competitive imbalance caused by the vast spending differences between teams. Despite discussions around adding a salary cap, the MLBPA remains firm in its stance against such a move. The union has a substantial “war chest” to support players in the event of a work stoppage, as preparations for bargaining to replace the current labor contract intensify.
While a salary cap has always been a nonstarter for the players’ union, data suggests that reforming MLB’s economics could benefit players. The average MLB salary hasn’t kept pace with the league’s revenue growth, unlike leagues with salary caps like the NBA, NHL, and NFL. Tying salaries to revenues could have resulted in players earning an additional $2.3 billion in salaries over the past decade, according to experts. Players’ salaries have risen 3% annually over the past decade. NBA veteran Litvin suggests salary cap/revenue-sharing system for fair play. MLBPA opposes restrictions on player earnings in free market. Mets break records with $765 million Soto contract. Salary floor could benefit smaller market teams and increase player pay. Executives hint at rule changes to level playing field and increase fan engagement.
MLB teams face spending gaps due to local media revenue discrepancies. Dodgers make $300 million annually from Charter Communications deal. Smaller market teams like Marlins earn $50 million. Regional sports networks face decline as cable bundle subscribers drop. MLB seeks new national media rights deals in 2028 to replace RSN model. Industry experts doubt MLB can secure blockbuster media deal without salary cap. Roku pays $10 million annually for 18 games on its free ad-supported streaming Roku Channel, while Apple spends $85 million for “Friday Night Baseball.” ESPN opted out of its $550 million-per-year MLB deal due to overpayment concerns. Experts predict a reset in 2028 with a new collective bargaining agreement and potential salary cap to address team funding disparities.
Read more at CNBC: MLB weighs salary cap as potential 2026 lockout looms