Players would actually make more money under a cap system, despite ownership cries about rising costs. Major League Baseball is the only one of the four major North American sports leagues without a salary cap. It is very much a league of haves and have nots. For decades, a significant segment of MLB ownership has […]
Players would actually make more money under a cap system, despite ownership cries about rising costs.
Major League Baseball is the only one of the four major North American sports leagues without a salary cap. It is very much a league of haves and have nots. For decades, a significant segment of MLB ownership has pined for a salary cap system to reign in higher spending teams and to achieve what they term “cost certainty”.
The MLBPA has steadfastly opposed any kind of cap system in baseball. This fight manifested in the loss of the final 2 months of the 1994 season, and the cancellation of the 1994 postseason.
With the current CBA set to expire following the 2026 season, there is reportedly an expectation of a work stoppage following the 2026 season as MLB Commissioner Rob Manfred and a strong group of owners want to push full force for a salary cap system. Manfred and owners claim they lose billions as a result of not having cost certainty, and they feel team valuations will increase even more with a salary cap system.
Here’s the crazy part about this:
MLB players would, as a union, make more money under a cap system than they do now.
I’m not entirely sure how the union doesn’t know this. I am stunned that the owners don’t know this.
We have two sides fighting the battle the other side should be fighting, and this is why:
In the other 3 largest North American sports leagues, the salary cap is close to a 50/50 split of revenues. In MLB, it’s not close to that.
The NFL salary cap is approximately 49% of revenues, it has a 90% floor. Teams failing to spend at least 90% of the cap over a multi-year period must write a check to the NFLPA for the difference. No team has ever fallen into that penalty.
In the NHL, there is a rigid 50/50 split. The league estimates revenues for the upcoming season, then takes 50% of that number and divides it by the number of teams to create the cap midpoint. The ceiling is 15% above that number, and the floor is 15% below that number. A percentage of player salaries is held in escrow, and at the end of the year that escrow account is balanced at a full 50/50 split of that year’s revenues. If the salaries are over 50%, the owners keep the money, if not then the players get it. They break it to a dead even 50/50 split.
The NBA has a soft cap and can fluctuate between 49-51% of revenues, as they account for Bird Rights contracts that allow teams to exceed the cap in certain situations. When player salaries don’t reach at least 50% revenues, the league cuts a check to the NBAPA. When those salaries exceed 50%, the luxury tax and the first/second aprons penalize the highest spending teams to keep revenues and salaries in line. In 2024, salaries were 51% of revenues.
MLB is nowhere near that. In fact, in 2024 MLB salaries were 42.1% of revenues. That is the highest percentage for players over the past 12 non-pandemic seasons, ranging from 2012 to 2024.
In reality, if the MLBPA told the owners that they would agree to a cap system, with a 50/50 split and a 90% floor, players as a whole would make MORE MONEY.
I believe if the players came out with this position, they would back owners into a corner they can’t really get out of, because owners have screamed they need a salary cap for over 40 years but they would 100% balk at a 50/50 split because it would cause them to spend more than they currently do.
A salary cap could also negatively impact the league’s highest revenue teams, as those are also generally the highest spending teams. If teams like the Dodgers, Mets, Yankees, Phillies, Red Sox, Blue Jays, Rangers, Astros, Cubs, etc. couldn’t field the teams they have, would interest in the teams wane somewhat, causing their sales and sponsorships to drop some? It is certainly plausible. Whether or not the increases by the other teams could make up for that is unknown, as those teams are in the biggest markets, and the other markets generally haven’t shown the ability to drive that kind of revenue on a consistent, year-over-year basis.
This current CBA battle currently looks to be a protracted one, but players can really score big the court of public opinion by changing their salary cap position, and putting all the onus on the owners to accept what they have been clamoring to get for over 40 years, and writing the bigger check that would need to go with it.
Category: General Sports
