I wrote this post the day the event happened, but we’ve had one thing after another and now its 3 weeks on. None the less, it’s still a topic i’m pretty passionate about, so lets post this.
So, the MLB commissioner (who works for the owners, lest we forget) is apparently making the rounds of MLB clubhouses to start putting a little nugget into the players’ minds ahead of the next collective bargaining session, and that nugget is simple: the sport needs a Salary Cap. He’s doing this to provide “cover” for the high likelihood of a lockout at the end of the 2026 CBA, one which baseball insider Ken Rosenthal already puts as a 90% likelihood.
And, when Manfred went to the Phillies clubhouse, one filled with veterans and highly-paid superstars, Bryce Harper told him to get the f*ck out.
Now, Harper is a lightning rod in the sport, and has been since he was 16. He’s hot headed, he gets ejected a lot. He’s been in fights on the field. So, I can understand if you immediately thought it was one more example of him being a hot-head. But, in this instance Is Harper right?
Yeah he is, because as usual the commissioner being disingenuous and is selling something that the owners want, and which won’t help the players as much as he’s claiming.
First, lets lay down some basic Macro Economic facts about Baseball.
- MLB generated $12.1B in revenue last year
- The 30 team’s combined payroll for 2024 was $4.89B
- There’s a soft cap in place now, with no floor and specious penalties for teams who don’t spend enough.
So, the players are currently getting paid right around 40% of total revenues in combined salary. If you want to add in a few more million per team to cover its 150 or so minor leagues collectively, fine, but it doesn’t really change the overall economic argument.
The other three major leagues in North America all have salary caps (as the commissioner will remind you), but the other three also have defined percentages of revenues that go to the players AND they have salary floors. Lets go league by league:
The NBA has a soft cap with exceptions and taxes built in:
- their CBA calls for players to get 51% of “basketball related income” or BRI
- In 2024, the salary cap is $140M
- in 2024, the salary floor is $126M
- But, teams can go over the cap to sign their own players and are then taxed at differing levels going north at $170M and upwards in a very complex system that is covered well on this wiki page.
Not for nothing, but there’s a NBA salary FLOOR of $126m, for basically 12 active players a night. Meanwhile, there’s 12 of the 30 MLB teams that aren’t spending that much right now … for 26 guys.
The NFL has a hard cap system in place:
- The hard cap in 2024 was $255M, which is increasing to $279M for 2025.
- There is a defined salary cap floor; 89% of the cap over a rolling four year period.
- The split between owners and players is supposed to be 50/50, though tactics by the owners now have that at more like a 52/48% to the players. Still a lot more than 40%.
Lastly, the NHL also has a hard cap with a floor and a defined revenue split in place:
- The Hockey CBA calls for a 50/50 split of all “hockey related revenues” or HRR
- There’s an $88.5M cap and a $65M floor defined in the CBA for 2024
So, Mr. Manfred, you want a salary cap in MLB? Fine. But it should come with two stipulations:
- if there’s a cap, there needs to be a floor.
- if there’s a cap, it needs to come with a defined percentage of revenues to the players that’s adjusted annually to league revenues.
Good luck pitching that to owners, because there’s no way they’ll agree to it. The Owners want to have their cake and eat it too, per normal. Which is why it’ll never happen voluntarily, and why we probably face a work stoppage after this CBA expires as the owners push for it.
Let’s say for sake of argument that the players demand 50% of revenues. Only seems fair right? Every other pro league in the continent basically has a 50/50 split, and without the players there’s no game. Lets forget for a moment that only 1 or 2 teams make their books public (Toronto and Atlanta as publicly traded teams); the rest have private books where they claim they’re losing millions while watching their franchise values grow exponentially over time. Some teams own their own RSNs and net hundreds of millions more in revenues that are completely off the books and out of the public eye. In all likelihood the quoted annual revenue figure is an estimate and is likely low, but for the sake of the rest of this article I’m going to trust the $12.1B revenue figure for the industry.
Lets do some simple arithmetic:
- 50% of $12.1B in revenues is $6.05B
- If the players were given 50% of revenues, then $6.05B split into 30 teams = an average payroll of $201M per team.
- Right now, the average payroll in the league is $163M. The median team income is even lower thanks to massive spending at the top; just $142M.
- Only 10 teams out of the 30 even hit $200M this year, and 5 teams don’t even hit $100M.
You want a salary cap? Fine: then basically every team needs to increase its payroll right now around $40M to make up for the missing money across the entire industry. That would instantly make up the $1.2B gap between a 40% revenue split and a 50% revenue split. Commit to an NFL-style rolling four-year salary floor structure where teams have to spend 89% of the salary cap over a rolling period; this would theoretically allow teams to purposely spend less to rebuild, but then would force them to catch back up and play by the rules. But, if the teams attempt to cheat (ahem Miami), then that money still has to be paid to the players somehow, and there needs to be enforced penalties that actually hurt the team.
Does anyone here think any small market team like Pittsburgh, or Miami, or Tampa, or wherever the Athletics are right now are onboard for an average payroll of $200M? Or, even to be forced to increase spending $40M right now? Of course not. Which is why a salary cap without a floor or a revenue split is NEVER going to be fair to the players.
By the way, none of this is news. This payroll discrepancy issue has been the case ever since the Luxury tax went into effect. An entire generation of middle-aged players on the wrong side of 30 suddenly disappeared out of the game once the luxury tax started because it gave cover to teams to basically stop spending. Multiple times there’s been grievances filed by the MLBPA against teams for not even spending their revenue sharing dollars, and one team (Miami) has been so audacious in their skirting of the rules that they don’t even bother to try to adhere to the guidelines. There’s basically no penalties being levied for teams that are cheating, and at the end of the day the collective payroll of the players takes the cut.
Meanwhile, every time a player actually gets paid … the next chorus of “players are overpaid” nonsense comes from a certain part of the fan base, who have been conditioned by ownership over decades of labor fights to look at these 8-figure deals (while simultaneously looking at their own 5-figure salaries) and blame players for being “greedy” every time this issue comes up. If you’ve ever said to yourself, “why does Juan Soto need $70M/year?” then you’re buying into the owner’s game as well. You can’t look at one individual player’s contract; you have to look at the industry as a whole, and owners have short-changed players billions of dollars of salary over the past decade. Billions and Billions of dollars.
(Also, if you want to complain about baseball players being “overpaid” just go take a look at the NBA per-season salaries … and take a look at the number of guys making $30M/year or more who literally you couldn’t pick out of a lineup. There’s 60 players in the NBA making $30M/year or more, which is more than double that of the current MLB despite having a fraction of the players. Except … this is what the players there deserve, since the league makes so much money. This is where dozens more baseball players should be).
So, when Manfred comes to peddle his nonsense, the players absolutely should tell him to “get the f*ck out” unless he wants to have a legitimate conversation about how a cap, and a floor, and a revenue split, would be discussed.
I 100% agree with all of this, Todd.
I’ll also mention another scenario I’d be ok with. Nationalize the league into a public trust. Cut most of the advertising and reduce ticket prices. Air the games through public radio and tv stations. Use an in house streaming service. No profits, no increasing value of the teams. The whole thing is run as a public community service where revenue is set to just cover all the costs.
In that scenario, I’m fine with max salaries in the $5m range or whatever.
But as long as the league is a profit maximizing entity, I will side with entertaining millionaires over the boring billionaires every goddamn time.
SMS
18 Aug 25 at 3:05 pm
@SMS: Public Trust? You’d be asking a lot of wealthy people to give up multi-billion dollar assets.
Todd Boss
19 Aug 25 at 9:13 am
Understand that everyone feels like a lockout is inevitable after the 2026 season. It’s easy for both sides to act as if they are prepared for a long standoff and to lose a chunk, if not more, of the 2027 season.
That said, given Todd’s revenue and payroll numbers, how unified are the owners in this game of chicken?
I get the “owners want their cake and eat it too” characterization, but are the owners OK with possibly losing their cake when the current system is pretty good for them? Not sure if just a simple majority of the MLB teams is required for a lockout, but seems like there are a lot of teams, maybe not a majority, but close, that want no part of:
a) losing all or part of the 2027 season (and a big part of a revenue stream)
b) changing the baseball economic system to make sure that the A’s, Marlins and Pirates can keep up
c) risking the valuation of franchises that keep rising
Understand that the 2024 WS was Yankees v. Dodgers, but if the teams with the current best records in MLB played in the 2026 World Series, the Brewers would be playing the Tigers. That’s the #20 MLB payroll versus the #15 MLB payroll. There are several teams outside the top 10 in payroll in the playoff mix.
So, understand the frustration among many MLB teams when the Dodgers sign another arm for a mega-million dollar deal, but every year there are several MLB teams that compete on the highest levels of the sport with a modest/sensible payroll.
Not saying the lockout won’t happen, just positing that maybe the situation isn’t as dire as currently projected. If it is, so dumb to risk the future of a sport that is thriving (on both sides).
Pilchard
19 Aug 25 at 11:26 am
@Todd – Oh, I certainly agree that it won’t happen. And I’m not even saying that I think it should happen. I’m just saying that that would be another context in which questions like “why does Juan Soto need $70M/year?” wouldn’t be ridiculous, and therefore a scenario where a salary cap (and one much lower than current salaries) could make sense.
Also, I have a question that you might know the answer to. This offseason, the A’s somewhat surprisingly spent some money on FAs. Nothing crazy, but quite a bit more than zero. I recall the news coverage around that mentioning them having to increase their spending to keep or regain access to profit sharing. Do you know the details on that? Were they actually sanctioned or was it to avoid potential future sanctions? Have other teams been in that situation or are any on track for it? Are the As so much worse than the Pirates and the Rays and Miami that they’re the only team that’s ever been (almost?) punished?
One wrinkle that I think I remember from those articles is that it sounded like the mechanism to prompt minimal spending is by withholding revenue sharing, which means the Nats are immune no matter how little they spend. As far as I can tel, the current CBA doesn’t have even a toothless mechanism to get large market teams to spend.
SMS
19 Aug 25 at 12:20 pm
@pilchard: Owners are the ones doing the lockouts; the players havn’t walked off in decades. So, proof seems to be with the Owners being a-ok with these actions. Makes you wonder how truthful their claims of profitability are.
As for Milwaukee vs Detroit comment … sure we’ll have one off years where teams get lucky and get into the playoffs on low payrolls. Kansas City last year was a great example … but it wasn’t sustained. However, there’s absolutely a relationship betweeen sustained payroll and playoff appearances; the last time the Dodgers MISSED the playoffs was 2012. Philly has made it 4 years in a row with heavy payroll, Yanks made it 8 of 9 years. Houston 8 straight playoffs. The Nats during the 2010s were high payroll … and had either the best or 2nd best record in the decade and half a dozen playoff appearances. For every one Tampa making the WS there’s ten high payroll teams in the WS.
Todd Boss
19 Aug 25 at 12:44 pm
@pilchard,
You’re right that MIL and DET are good. But LAD, NYY, NYM, and PHI are in contention every single year. And they’re the ones with the top payrolls. “the field” has a cheap contender every now and then, but the heavyweights are always among the top contenders.
I think the real need here is thorough revenue-sharing among teams. I wouldn’t be surprised if the Pirates simply don’t have $205M to pay for players. However, if all those RSNs (and other media sources) were brought under one roof and split 30 ways, parity would be much better.
And of course the owners would never go for it, but here’s why they should — it’s good for the game. The current situation, where there are really only 10 teams who have a shot every year, and 10 “don’t even think about it” teams, makes for a boring product. The Nats are unwatchable this year, and it’s because of a lack of spending.
Kevin R
19 Aug 25 at 1:05 pm
The players have the wrong strategy. They should be willing to “trade” having a salary cap in exchange for a salary floor of at least $150M. There would be more money added to the overall salary pot by forcing all the low-spending teams up than would be lost by tamping down the few over-spending renegades.
The “working class” majority of players should be pushing hard for the floor, as that’s where their money would be. They’re not going to be getting the mega contracts of the Harpers and Scherzers and aren’t really going to be affected by a cap.
KW
20 Aug 25 at 5:57 am
Agree that hte Players Union constantly has the wrong strategy. And that’s because the Players Union reps are generally veterans who have “made it” to 10years of service time and aren’t thinking about the pre-arb players; they’re thinking about their next FA contract. That’s why the players union has spent SO MUCH negotiating capital on the stupid Qualifying Offer system, which generally impacts like 10-12 players a year (or, about 1% of the 1200 or so 40-man roster players in the union) instead of focusing on better terms for the pre-arb and arb players, or the draft slotting, or elimination of minor league teams, or the constant push for a world-wide draft (which In my opinion would DESTROY baseball development in the DR and Venezuela).
Both sides are short sighted. And I don’t really get why.
Todd Boss
20 Aug 25 at 9:48 am