Major League Baseball today issued its latest proposal for a new collective bargaining agreement. The key update is the league’s willingness to push for the implementation of a salary cap/floor system from 2027 through the 2028 season, but the mere fact that the entire proposal hinges on the implementation of a salary cap/floor system unsurprisingly resulted in a quick rebuke from the MLBPA. The league’s points on the subject sound attractive, but they are formulated quite selectively. For example, MLB’s press release proposes an increase to a league minimum salary of $1 million and a $15 million increase to the pre-arbitration bonus pool (plus an additional $10 million going into the pot over the life of the next deal). However, reading the document itself (link via Evan Drellich of The Athletic) shows some key caveats. The supposed $1 million league minimum only applies to players with more than two years of major league service. Since players reach arbitration at three years, that only applies to players with more than two and less than three years of service. Still, the top 22% of those players already qualify for arbitration as “Super Two” players, so the $1 million minimum really only applies to the 78% of players with between two and three years of service. Players with less than two years of service would have a league minimum of $900K. They can receive $100K from the pre-arbitration bonus pool to bump them up to $1M, but only if they secure a full year of major league service time that season. Taking money out of the pre-arb pool for that select group of players is not the same as simply guaranteeing those players $1 million and leaving the bonus pool intact for the entire pre-arb class as a whole. A significant portion of the proposed $15 million increase in the pool would simply go toward the pre-deal pool of players getting a raise from $100,000 to $1 million, thus reducing the impact of the increase. (As a reminder, the current pre-arbitration bonus fund is $50 million, with each team contributing $1.667 million annually to pay bonuses to MLB’s most productive pre-arbitration players.) The cap itself is proposed at $258.2 million, with a floor of $180.2 million, but those are merely projections. Specific numbers would be based on the league’s actual revenue in the upcoming 2027 season and therefore cannot be known at this time. MLB’s proposal calls for a 50-50 split of all “baseball revenue” with players starting in 2028, but does not specify what exactly “baseball revenue” entails and whether there is any discrepancy between that and total revenue. Those cap/floor numbers would include annual contributions to the pre-arbitration bonus pool and player benefits, meaning the actual cap/floor would be lower than the suggested figures; MLBTR contributor Ethan Hullihen projects that player benefits will cost $18,561,327 per club next year (as can be seen in MLBTR’s Payroll Tracker). The proposed changes to the pre-arbitration bonus pool would mean each club would contribute an additional $2.167 million that would count toward the cap/floor cap ($2.5 million annually at the end of a new deal). Other elements of today’s proposal include reducing the number of times a player can be drafted in a given season from five to four, eliminating the ability for teams to receive a fourth option year on a player, and a vague mention of “restrictions on a Club’s ability to include and remove a player from 40-man and Active rosters throughout the season for strategic reasons.” (Presumably, that’s a nod to teams like the Braves and Orioles who repeatedly put Carlos Carrasco, Elieser Hernández and Albert Suárez on and off the 40-man roster through repeated DFAs.) MLB’s proposal also includes weekly roster limitations, moving Rule 5 Draft eligibility up by one year, and references an International Draft (without explicitly proposing details around implementation). The union’s response criticizes the league’s proposal as an effort to “continue to propose blowing up the current system and replacing it with one designed to line their pockets and increase the values of their franchises.” The MLPBA adds that delaying implementation of a cap/min cap until 2028 still results in a “massive reduction in player compensation,” “the elimination of fundamental player rights, including guaranteed contracts,” “the destruction of domestic and international fan entry systems,” and “replacing market-based fundamentals with a zero-sum system that harms the middle class and pits one player against another.” (The notion of eliminating guaranteed contracts arises from the possibility that guaranteed deals may need to be based on revenue projections with a portion held in escrow; if revenue does not meet expectations, players may not receive their full salary, as has happened in the NHL under its cap/floor system in the past.) The MLBPA concluded: “The players are ready to negotiate in good faith toward a new collective bargaining agreement that will capitalize on our sport’s unprecedented momentum and benefit the players, clubs and fans equally.” The current collective bargaining agreement expires at 11:59 pm ET on December 1.
