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 an overhaul to revenue sharing, a "competitive integrity tax" for low-spending teams that mirrors the competitive balance tax for top-spending clubs, and a significant raise to minimum salaries. As expected, it did not include a hard cap-and-floor system, which is MLB's top priority for the next CBA and a framework union leadership continues to vehemently reject.
MLB is expected to formally counter Thursday with a hard cap-and-floor system 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. The two sides have been able to navigate labor talks without missing games since then.
The MLBPA's proposal, sources said, contained less drastic measures to address the economic disparity between big and small-market clubs, with a focus on increasing revenue sharing within the current Competitive Balance Tax (CBT) system. The proposal called for increased sharing of local media revenues and less of stadium-related revenue.
Also included in the proposal, according to sources, were a "competitive-integrity tax" for any team with a payroll below $150 million, increasing the minimum salary from $780,000 to $1.5 million in 2027, raising the base CBT threshold from $244 million to $300 million, eliminating the qualifying offer, free agency for players with five or more years of service at age 30, and an expanded draft lottery to further disincentivize tanking.
"Today, the MLBPA presented a comprehensive set of economic proposals designed to advance the rights and benefits of players at all levels," 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. Additionally, the players' proposals provide increased revenue sharing initially guaranteeing every small market Club a minimum of $240m in revenue every season.
"This enhanced revenue sharing includes added protections to ensure Clubs prioritize winning over profiteering. Ultimately, our proposals are designed to build upon the incredible momentum and popularity of our sport world-wide."
"Players across the league are engaged and involved," executive subcommittee member 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."
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 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 Los Angeles 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.
Interim MLBPA executive director Bruce Meyer, promoted to the 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.