David Lennon: Once again, baseball salary cap issue makes forecasting murky for possible work stoppage
Major League Baseball comissioner Rob Manfred answers questions during a news conference at the MLB winter meetings on Dec. 8, 2025, in Orlando, Fla. Credit: AP/John Raoux
For Major League Baseball, like any other business, the current labor negotiations are all about the money.
Both sides want as much as they can get.
Once you boil everything down to the dollar signs, it’s easier to sift through the language regarding payroll ceilings/floors, competitive-balance levers and revenue sharing. Of course, this is all being done for the good of the game — wink, wink — but consider the saber-rattling over the next six to eight months (if we’re lucky) a necessary evil toward making sure baseball is played in 2027.
Right now, there’s no guarantee of that. We’ve been down this road before, envisioning doomsday scenarios that wipe out entire seasons, but for the past 32 years, someone has always blinked. MLB hasn’t missed a game since the 1994 strike that ultimately wiped out the World Series the same October.
The Everest-sized obstacle back then? The owners’ push for a salary cap.
So why are we back here again? Commissioner Rob Manfred, speaking at the MLB owners meetings in midtown Manhattan, insisted Wednesday that it’s about competitive balance, as the wide disparity in spending automatically eliminates too many teams from being serious playoff contenders. There is truth to that. The last small-market team to win the World Series was the Royals in 2015 — when they knocked off the Mets — and if you scroll down the list of past champions, it’s a matter of just following the money.
For Manfred & Co., it’s the best PR card they have to play, because fans aren’t interested in how owners benefit by having fixed costs for labor, which then leads to more revenue and higher valuations of their franchises. That pitch isn’t going to rally the public to their side — not unless the Pirates and Reds and Twins and A’s and Marlins start having real shots at doing something in October rather than merely being bowling pins for the big boys.
The current system, which includes the Competitive Balance Tax, was designed to slow the sport’s biggest spenders. The highest threshold, which now sits at $304 million for this season, is even nicknamed the Steve Cohen Tax. But these supposed guardrails didn’t stop the Dodgers ($420M), Mets ($380M) or Yankees ($340M) from blowing right past.
This year, 10 teams — a third of MLB — are likely to be over the first tax-paying threshold of $244 million, and that’s evidently too many as the owners’ recent proposal puts a hard cap at $245.4 million going forward with a hard floor of $171.2 million (a dozen clubs currently are below that payroll number).
“We have tried mightily over several rounds of bargaining to use a competitive balance tax to address competitive concerns,” Manfred said. “Sometimes you got to admit you failed.”
That’s why the owners now view the salary cap as the only viable alternative, which the union maintains is a non-starter in these negotiations, just like always. By comparison, the union’s first proposal offered a payroll floor — or competitive-integrity tax — and a new CBT ceiling of $300 million (but no hard cap). Manfred, for now, sounds like the owners are done with penalty-based systems because they haven’t worked as effective brakes.
“It’s a process,” Manfred said. “We think we made a proposal that addresses probably the most significant business concern for us. We think addressing that concern will have really significant upside for the owners and the players.”
At this stage, the only encouraging thing about these negotiations is that the next Opening Day is still 10 months away. The current CBA wasn’t agreed upon until March 2022, and that was after a 99-day lockout. This one expires Dec. 1.
Time doesn’t usually help hasten this process, however — only the pressure of losing regular season games, which is what they were able to avoid the last time around — barely. That’s why there’s every reason to expect a similar course of action in 2027, but the specter of a salary cap is far more complicating factor.
“I’m not going to speculate about work stoppages,” Manfred said. “I think that the proposal we’ve made is grounds for constructive dialogue back and forth with the MLBPA about how we can address the No. 1 concern for our fans — and that is a lack of competitive balance in the game.”
Manfred makes the issue sound clear-cut. But it isn’t. The Mets have baseball’s highest payroll, but are eight games under .500 (27-35) with the NL’s second-worst record, last in the division. On the flip side, the Rays (36-23) lead the AL East with MLB’s third-lowest payroll ($109 million). The White Sox (33-29) — just above Tampa Bay at $111 million — are second in the AL Central, behind the $87 million Guardians (36-27).
However this season plays out, don’t expect Manfred & Co. to back down from their competitive-balance claims. The three other major North American sports leagues all have some form of salary cap, and MLB’s owners have been envious of them for decades. This is why they’re drawing the line in the sand now, regardless of how well baseball’s other economic indicators — like attendance and TV ratings — appear to be doing so far this season.
And Manfred conceded to being worried about the 1994-95 disaster repeating itself, even this early in negotiations.
“Of course I do,” Manfred said. “Look, we want to make an agreement. We’re open to whatever ideas people have, but we need a realistic framework that addresses the fans’ concerns about competitive balance. You just can’t ignore that financial penalties have not got it done for us.”
The real damage to the game, however, could be what comes next.
David Lennon is an award-winning columnist, a voter for baseball's Hall of Fame and has covered six no-hitters, including two perfect games.
