Want a Salary Cap in MLB? You'll Need a Salary Floor. Here's How it Could Work

Competitive balance is a huge issue in Major League Baseball. Right now a kid in Milwaukee or Kansas City can follow their local NFL team and know it has just as good of a shot of winning it all as a kid in Los Angeles or New York. That is not the case in baseball.

Talk of competitive imbalance has been one of the few constants in my 30+ years as a fan of the sport. For most of that time the Yankees were ruining baseball by signing all the good players. Now it is the Dodgers. Both narratives are incomplete and do not address the fundamental economic issues that allow a few teams to have a huge competitive advantage over the rest of the league.

Now with the Dodgers signing Kyle Tucker, the pundits are again calling for a salary cap in Major League Baseball. Capping the top is a great way to keep a handful of teams from running away from the pack. But unless those at the back of the pack make an effort to catch up, the competitive balance will remain.

Any player revenue lost through a cap needs to be recaptured through a floor.

Very few people in the sports world point out the fact the NFL has a minimum spending requirement. Over the course of any 4 year period teams must spend at least 89% of the salary cap. If you've ever wondered why a team that is clearly rebuilding signs an expensive veteran, this is probably why. It also explains why extensions are very common in the NFL.

The Major League Baseball Players Association is probably the strongest union standing in this country. They have negotiated fully guaranteed contracts and perks ranging from chef crafted clubhouse meals to really cozy travel accomodations. The MLBPA is not going to simply accept a cap unless the money trimmed off the top ends up in player pockets elsewhere.

And nor should they. MLB revenues are in the billions of dollars and the game is flush with money. Fans pay to see the players play and they are the ones risking injury. We just want to see them play competitive games whether we live in a large or small market.

So let's look at the basic math.

If you look at the team payrolls for 2025 it looks a lot like America in general. A few super rich teams that spent a ton, twice as many poor teams that spent little, and a nice bunch right in the middle. There's a $256 million difference between the top spending Mets and the lowest payroll Marlins, a number that would be the 4th highest payroll in the league.

Let's say in order to get the teams more closely bunched together MLB is going to institute a cap of $250 million. Only the big market teams could hit this number so there's still a bit of an advanatage for them, but it does reign them in quite a bit; especially if the new CBA closes the deferral loophole.

Four teams spent above $250 million last season. Getting them down to $250 million each would trim a combined $221 million from their ledgers. That's a nice chunk of change, but one that could be easily offset with a floor of $125 million.

10 teams spent below $125 million in 2025. By making them spend revenue sharing money on payroll (and likely increasing revenue sharing overall) a floor could be installed. Getting those 10 teams up to $125 million would add roughly $305 million to player payroll.

These are extremely basic numbers but they show how a more competitive league would operate. MLB owners have long acted like 30 individual fiefdoms rather than realizing how much they depend on each other. They've allowed the NFL and NBA to bypass them in popularity with young fans largely due to competitive imbalance.

There will be winners and losers in every agreement. The goal should be to maximize the number of winners while minimizing losses. In this case, the players make more money, the fans get a more competitive game, and the big market teams still have the ability to spend a bit more than the rest.