MLB Owners Propose Salary Cap as 2027 Season Looms

Major League Baseball owners have introduced a salary cap for the first time since 1994, a move that threatens to end the 2027 season before it begins. The current collective bargaining agreement, signed in March 2022, expires on December 1. If the two sides fail to agree on new terms, the owners are likely to impose a lockout as soon as the contract lapses.

The 2027 season is scheduled to start on March 24, leaving 148 days between the expiration of the current deal and the first pitch. The owners want a cap and a floor to reduce the gap between high and low payroll teams. They also propose limiting any single player's salary to a maximum of 15% of the team's total payroll.

The players' union rejects the cap, arguing that the current system of free agency and salary arbitration allows athletes to realize their full economic value. The players seek to expand free agency and arbitration rights, nearly double the major league minimum salary, and increase revenue sharing from high-earning clubs to smaller-market teams. They also want a tax on teams that keep payrolls below a certain level.

Negotiations have continued since May, but the two sides have not found common ground on the key economic issues. The last similar standoff in 2022 required 99 days to resolve after a lockout had already begun. During that previous cycle, the opening day was pushed from March 31 to April 7 after several deadlines passed without agreement.

Commissioner Rob Manfred acknowledged the pressure of the calendar. "I am not, by nature or by intellect, someone who negotiates based on deadlines," Manfred said. "I think in recent years this has been driven more by deadlines, which is not unusual."

A lockout would likely trigger a scramble for free agents before December 1. In the final days of the previous contract cycle in 2021, clubs committed $1.4 billion in salaries, including nine-figure deals for players like Javier Baez and Max Scherzer. This year's free agent market includes stars like Tarik Skubal, Freddy Peralta, and Randy Arozarena. On Thursday alone, 144 players became free agents, with dozens more expected to follow by Monday.

The players' union replaced its leader earlier this year. Bruce Meyer, the lawyer who led the negotiation team for the last contract, took over from Tony Clark. The union's executive subcommittee, which includes pitchers Pete Fairbanks and Chris Bassitt, voted against the 2022 agreement, though the full board of player representatives approved it by a vote of 26 to 12.

Bassitt said the union is working to keep the 30 teams aligned. "We have taken huge, huge, just in educating the players and keeping them together," Bassitt said. "It is not like the executive board is made up of eight guys and you follow those eight guys. Now, so to speak, it is the 30 teams pulling on the same rope, and it is every player under that umbrella."

Owners maintain they are united behind the cap plan, arguing it benefits the roughly 40% of players on 40-man roasts who have less than one year of major league service. The players note that other major U.S. leagues, including the NBA, NFL, and NHL, have operated under salary caps for decades, but baseball players have resisted such a system for years.