The Major League Baseball Players Association made the first formal proposal in collective bargaining talks with Major League Baseball on Wednesday, opening negotiations with considerable changes to the sport's financial structure without the mention of a salary cap.
The proposal included sharing more local-television revenue than the current CBA stipulates, a "competitive-integrity tax" for low-spending teams that mirrors the competitive-balance tax for top-spending clubs, a raise of the base Competitive Balance Tax threshold from $244 million to $300 million and nearly doubling minimum salaries.
MLB is expected to formally propose a hard cap-and-floor system Thursday for the first time in more than three decades. The league has not formally proposed a hard salary cap system since negotiations led to the 1994-95 players' strike, which prompted the cancellation of the 1994 World Series. Though two sides have been able to navigate labor talks without missing games since then, the union vehemently opposes a capped system.
"Today, the MLBPA presented a comprehensive set of economic proposals designed to advance the rights and benefits of players at all levels," MLBPA interim executive director Bruce Meyer said in a statement. "Our goal is to preserve and improve baseball's market system, rewarding competition on and off the field."
The current CBA, which expires Dec. 1, was finalized in March 2022 after a 99-day lockout that nearly forced the cancellation of games. MLB would likely lock out the players again if the two parties fail to agree on a deal before the deadline, which would produce the 10th work stoppage in MLB history and put games at risk in 2027.
"We appreciate the union making a set of proposals and we look forward to continuing the bargaining process and working towards solving the competitive balance problem our fans are telling us needs to be addressed," MLB spokesman Glen Caplin said in a statement. "We understand their proposals are designed to benefit players. Unfortunately, they do not address and in fact exacerbate the competitive balance problem our fans are telling us we must address.
"The MLBPA's proposal would reduce the amount transferred to lower-revenue Clubs, weaken the Competitive Balance Tax, and lead to even more payroll disparity than exists today. For example, under the Union's proposal, the Dodgers would pay less in luxury tax payments, giving them an additional $70 million to spend on payroll."
The union's proposal, sources said, centered on increasing revenue sharing to lower-revenue teams within the current financial structure by escalating the sharing of local television revenue while lowering the sharing of stadium-related revenue to incentivize teams whose success leads to large attendance. Teams would share the first $50 million in local television revenue and two-thirds of every dollar beyond that, then split it evenly under the union's plan.
Each team would be guaranteed a certain amount from central revenue each season, starting with $240 million in the first year, coupled with provisions to encourage spending on major-league payroll.
Those include clubs forfeiting revenue sharing if their payrolls don't meet a minimum of $150 million -- 50% of the base CBT threshold -- and providing bonus money for revenue-sharing recipients when they post a winning record or make the postseason.
"This enhanced revenue sharing includes added protections to ensure Clubs prioritize winning over profiteering," Meyer said. "Ultimately, our proposals are designed to build upon the incredible momentum and popularity of our sport world-wide."
Also included in the proposal, according to sources:
Raising the base CBT threshold by more than $50 million in 2027 and all the way to $360 million in 2021, with the gaps between each surcharge level widened from $20 million to 10%
Allowing players who are at least 30 years old to reach free agency after five years of service time. Clubs can keep those players for a sixth year if they offer him the average of the top 125 salaries. Those players can then accept the offer or decline it and go to arbitration
Increasing the major-league minimum salary from $780,000 to $1.5 million in 2027, $1.65 million in 2028, $1.825 million in 2029, $2 million in 2030, and $2.2 million in 2031
Removing non-financial CBT penalties, which currently include forfeiting draft picks
Eliminating the qualifying offer. Teams still receive draft picks upon losing a free agent but no longer forfeit draft picks for signing players. Instead, payees (teams that receive revenue sharing) are awarded draft picks for signing players at certain salaries. An example: If a payee signs a player to a $150 million contract or a contract with an average annual value of $40 million, the team receives a Comp A pick and third-round pick
Enlarging the pre-arbitration bonus pool from $50 million to $180 million with annual increases, fixed bonuses for the top 125 players, and removing players who sign early long-term extensions. The current CBA does not include annual increases
Expanding the Prospect Promotion Incentive (PPI) to award draft picks after the second round for pre-arbitration players who finish second and third in Rookie of Year Voting or fourth through 10th in MVP or Cy Young voting and draft picks after the third round for rookies who finish fourth or fifth in Rookie of the Year voting or 11th through 15th in MVP or Cy Young voting
Guaranteeing player salaries determined through arbitration cases
Expanding the pool of players who can enter salary arbitration after two years of service time instead of three -- designated as Super 2 players -- from the top 22% in service time to the top 44%
A one-time, upward adjustment of 20% with a maximum of $2 million for all 2026 and prior arbitration-eligible player comparisons. An example: David Bednar's current $9 million salary, which was agreed upon with the New York Yankees to avoid salary arbitration, would be reflected as $10.8 million
Expanding the draft lottery, first implemented for the 2023 draft, from six to eight teams
Creating a minimum tender of $3 million in arbitration
The last bargaining cycle also began with MLBPA submitting an initial proposal in May. MLB countered with an economic proposal in August and negotiated within the existing CBT framework rather than pursuing a hard salary cap.
The counter instead included lowering the first CBT threshold to $180 million -- down from the $210 million threshold in 2021 -- with a $100 million floor. The eventual agreement featured a first CBT threshold of $230 million for the 2022 season that increased every year to $244 million in 2026. It did not include a floor.
While other issues will be discussed, negotiations will boil down to the game's economic structure. MLB remains the only major North American professional sports league without a cap-and-floor system. The NBA first implemented a soft salary cap for the 1984-85 season that has hardened over time. The NFL followed with a hard cap system for the 1994 season, and the NHL installed one for the 2005-06 campaign.
MLB, pointing to the Dodgers and other big-market clubs, contends the chasm in revenue between clubs stymies competitiveness to a damaging degree and a hard cap- and-floor system is the best fix. Owners are nearly unanimously in favor of a hard cap, prognosticating that one would also boost franchise values.
The union argues sharp front offices can consistently overcome financial inequality -- pointing to the Milwaukee Brewers, Tampa Bay Rays and Cleveland Guardians as examples -- and a cap-and-floor system isn't required to stimulate spending among low-revenue clubs while highlighting the league's overall revenue and viewership growth.
Meyer, promoted to his position when Tony Clark abruptly resigned in February, staunchly voiced his opposition to a cap during meetings with players throughout spring training. Player leadership, topped by an eight-man executive subcommittee, has not wavered from the opinion. The challenge will be maintaining the solidarity necessary across roughly 1,200 members should negotiations deteriorate into a prolonged, public battle.
"Players across the league are engaged and involved," MLBPA executive subcommittee member and Los Angeles Angels pitcher Brent Suter said. "We're committed to leaving our game better for every generation of player that follows us onto the field -- just like the players who came before did for us."