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There’s been a whole lot of discussion lately, from the ownership and league side, anonymously and with names attached, to the idea of both an MLB lockout in 2026 when the current collective bargaining agreement expires, and the desire for a salary cap being part of the impetus for said lockout. I’ve already written about the lockout portion of things, but I wanted to reiterate something this morning, given that the owners wrapped their winter meetings in Florida, where the subject of discussion was often the game’s economics.
Evan Drellich wrote a story last week about part of that, headlined, “MLB owners debate push for salary cap at summit this week”. A key section from that piece, for our purposes:
“Trying to get everyone focused on what’s going to be the goal in labor,” the person said. Opinions among owners are mixed, people briefed on the discussions said, but time still remains. The collective bargaining agreement expires after the 2026 season.
In a vacuum, all owners would likely back a salary cap for the cost control it provides. Some owners are deterred in practice, however, by the lengthy work stoppage expected to be required to achieve one. The Major League Baseball Players Association has long opposed a cap, and many missed games could ensue if the owners aggressively seek one. Not all owners agree that’s a reason to back down, however.
What no owner is going to express to Drellich (or any reporter, that’s certainly not a knock on one of the best) here is on how sincere this push for a salary cap is. In a vacuum, yes, a salary cap would be something every owner would be fine with. There is no vacuum, though, just context. In context, a cap is something that only some teams would be happy with — those that feel pressured to spend a bit more because of the teams that spend the most, but aren’t thrilled about it. The teams that don’t spend much at all don’t need a cap, nor want one, and a cap would in fact cost them more money since its institution would also bring about a salary floor. As Joe Sheehan has called it, a salary cap is actually a “band,” one that puts all spending in a range between two points. It would stop the Dodgers and Mets from deciding they don’t care about luxury tax penalties, yes, and it would allow some teams that want to spend less to do so, but all of those teams who are acting like it’s still 2008 or whatever with their payroll would have to increase spending. And they aren’t going to want to do that.
There’s also an idea that Baseball Prospectus’ editor-in-chief Craig Goldstein brought up on social media late last month, that’s worth considering. Figuring out just what is “baseball revenue” for salary cap purposes, at a time when the league has teams building malls around stadiums then pocketing all of the profit from such an endeavor, which is also claimed as non-baseball real estate revenue, is going to be a real problem. The league has, for decades, avoided sharing the specifics of its financial details with even the union it has to negotiate with every five years at the bargaining table. A cap would mean they need to drop some of the subterfuge in order to figure out what goes into the revenue split that determines the cap and floor band, which… are they prepared to do that? Is that actually better than the de facto salary cap the luxury tax system provides, one in which they have plenty of cover to hide under and clubs like the Pirates don’t need to spend a minimum amount higher than their current payroll? More than two-thirds of owners would have to be really tired of the Dodgers in a way I’m not convinced they actually are.
Which is a long-ish way of saying that it still feels as if the key thing here for the owners is to convince everyone that they want a salary cap, but not necessarily to actually want one. A desire for a cap gives them a negotiating point to climb down from in order to get what they actually want, which is likely an even more extreme version of the luxury tax threshold that’ll, in theory, dissuade clubs like the Dodgers and Mets from spending like they have. Or allow them to hit harder on deferrals, which the owners already tried to get rid of in the previous CBA, or figure out something about signing bonuses that make them hit the luxury tax accounting harder than they do, or… you get the idea.
The system that’s in place allows for a tremendous grift for quite a few teams, and they’re not going to want to enter into a new era of streaming broadcasts where revenue-sharing dollars are even more vital to their profits only to turn around and have to increase their minimum spending. Teams used to spending heavily but also pulling in additional revenue from postseason appearances aren’t going to be thrilled about the potential hit to their competitive advantages being coupled with writing those bigger revenue-sharing checks to the teams that don’t want to spend. It just doesn’t feel like a cap is a realistic ask, even leaving aside the fact that, as Drellich’s report mentions, there would almost certainly be games (and revenue) lost were the owners to demand a cap. The players wouldn’t be able to strike with a lockout going, no, but they also wouldn’t have to say yes to anything if they don’t want to. The lockout, at that point, would be basically as good as a strike for their purposes.
Now, I’m willing to grant that the owners might just be greedy enough to make a huge mistake here, and actually be in favor of a cap at the expense of 2027’s games, an existing and successful grift, and the potential loss of revenue they currently deem as non-baseball as it becomes baseball revenue. But it just feels unlikely, even with a number of teams tired of the Dodgers’ whole deal.
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