MLB owners unveil first salary cap since 1994, union rejects

Major League Baseball owners have presented a proposal that would impose a salary cap of $245.3 million and a payroll floor of $171.2 million starting in the 2027 season. The plan also calls for centralizing local media revenue from the 30 clubs and splitting it 50‑50 with players, effectively eliminating the current revenue‑sharing system.

In response, the MLB Players Association delivered its own economic package, seeking expanded free‑agency eligibility, broader salary‑arbitration rights, an almost doubling of the major‑league minimum salary, and increased revenue sharing that would guarantee every small‑market team at least $240 million annually. The union warned that a cap would repeat the conditions that led to the 1994 strike, which cancelled the World Series.

The collective‑bargaining agreement expires on Dec. 1, 2026, and both sides have warned that a lockout or work stoppage could threaten the 2027 season. Owners point to payroll gaps—e.g., the Los Angeles Dodgers’ $415 million payroll exceeds the proposed cap by roughly $170 million—and say a cap is needed for competitive balance. The union argues the proposal is a profit‑maximizing move that would hurt players at all levels.