MLB Owners' First Salary Floor Offer to the MLBPA Is a Mirage

Team owners are willing to offer a salary floor in CBA negotiations along with their coveted cap, but it isn’t as generous as it seems.

Major League Baseball and commissioner Rob Manfred's first proposal for a new collective bargaining agreement is unlikely to entice the MLBPA. | Kirby Lee-Imagn Images

Major League Baseball made its opening proposal for a collective bargaining agreement on Thursday, and the players union is unlikely to feel encouraged by it. Part of the revealed plan included a hard salary cap and a hard floor, the latter of which players broadly support. That said, the floor proposal isn't as robust as it looks on the surface.

As part of the proposal, there would also be a hard salary cap. In 2027, the first year of the new deal, the cap would be set at $245.3 million, and the floor at $171.2 million. MLB is also proposing a 50–50 revenue split with the players. The devil is in the details, though.

Those salary numbers would be totaled by using the average annual value of player contracts, which are currently used to calculate how much a player counts against a team’s luxury tax bill. The owners also want to count the roughly $23 million in player benefits each team pays against that number. So the real salary floor would come in around $148 million, not $171.2 million. That's lower than the $150 million “competitive-integrity tax“ the union proposed on Wednesday that would function like a salary floor. And the functional cap for player salaries would be around $222 million—significantly less than the current luxury tax threshold of $244 million.

In its offer, MLB counted just eight teams that would have needed to cut payroll this season and 12 teams that would have needed to increase spending to reach their proposed cap and floor, respectively. But those are misleading figures that do not take the $23 million in player benefits into account.

By our calculations, using Spotrac figures for luxury tax payroll data, if the proposed rule applied to this season, 11 teams would need to increase spending to reach $148 million. Meanwhile, a whopping 13 teams would need to cut their payrolls to fit under the de facto cap of $222 million. Some would need to slash their number to an extreme degree. In 2027, the Dodgers are currently slated to have a luxury tax payroll of $363.2 million. That means they would need to cut their payroll by over $140 million before the start of next season.

It’s safe to say the union will never agree to those terms, but you can bet the owners will keep pushing. League spokesperson Glen Caplin confirmed as much in a statement.

“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,“ Caplin said. “Further, by sharing media revenue equally as part of our proposal, we can address another top fan concern of local TV blackouts. We look forward to working with the MLBPA during the bargaining process to continue improving the game for the fans.“

Interim MLBPA director Bruce Meyer noted that generations of players have fought against a salary cap and that was not going to change. He also pointed out that the last time owners made a big push for a cap came during the brutal 1994–95 strike that lasted 232 days and led to the cancellation of the ’94 World Series.

“For generations, our members have fought against cap systems because they harm players at all levels, erode or eliminate contractual guarantees, pit player against player, lead to more work stoppages, not less, and get worse for players over time,“ Meyer said. “Caps don’t lower ticket prices for fans, eliminate tanking or ensure teams are run with equal competence. They suffocate competition by offering owners an all-purpose excuse for inaction and mediocrity.“

Another provision in MLB’s proposal has long been expected. All local media revenues will become centralized, then distributed evenly, as opposed to the current system in which big market teams are able to rake in huge sums from local television deals while leaving their rivals behind.

After seeing the proposals from both sides, it’s clear the distance between them is significant. This was expected, as most believe these negotiations will lead to a lockout when the current CBA expires on December 1.

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