Major League Baseball (MLB) and the MLB Players’ Association (MLBPA) have begun the process of negotiating a new Collective Bargaining Agreement (CBA) that will take effect with the next baseball season.
The current CBA runs out on Dec. 1 of this year. The two sides began their preliminary groundwork for negotiations earlier this month. The MLBPA submitted its first proposal on Wednesday, with its lead negotiator, Bruce Meyer, releasing a statement outlining the goal for their efforts.
“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.”
MLBPA proposal
Following is a synopsis of the major proposals for the MLBPA’s initial effort:
- A boost in the minimum salary from $780,000 to $1.5 million beginning in 2027.
- A Competitive Integrity Tax that penalizes a team that fails to reach a minimum $150 million payroll.
- Luxury Tax changes that would increase the Competitive Balance Tax threshold from $244 million to $300 million for 2027 and then incrementally increase to $360 million by 2031.
- Free Agency changes that would give a player who is 30-years-old and has a minimum of 5 years of service, the ability to become a free agent instead of the current required 6 years of service time.
- Revenue-sharing changes that would increase the amount shared from locally based revenues among all teams, but less sharing from local revenue generated from stadium-based revenues. Teams share the first $50 million in local revenue and then two-thirds of every dollar beyond that.
- Each team would get a certain amount from the central revenue each season, starting at $240 million the first year, and paired with a provision that requires spending the revenue on payroll.
- Increased revenue sharing to low-revenue teams that make the postseason or have winning records.
- Penalties to teams that don’t spend their revenue-sharing income on team payroll.
- Draft picks and incentives for low-revenue teams that are active in signing free agents.
- Expand the draft lottery from 6 teams to 8 teams for first pick in the draft.
- Expand the Prospect Promotion Incentive program.
- Eliminate the Qualifying Offer for free agents and eliminate the non-financial CBT penalties.
- Increase the compensation to lower-revenue teams losing a player to free agency.
- Enlarge the pre-arbitration bonus pool from $50 million to $180 million. There would be annual increases added to that amount.
MLB made an official response to the MLBPA proposal.
“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.”
MLB counterproposal
Today, MLB released the highlights of its proposal and Glen Caplin, MLB spokesperson, made the following statement.
“Fans overwhelmingly support a salary cap and floor like in the other leagues because they don’t believe a $446 million spending gap from top to bottom is a fair fight,” league spokesperson Glen Caplin said in a statement. “Our salary cap and floor proposal levels the playing field while sharing baseball revenue with the players 50/50 as we grow the game together.”
Here are the major proposal highlights for the MLB:
- Payroll floor of $171.2 million and a payroll cap of $245.3 million for every team, starting in 2027. That includes player benefits, just like the current contract.
- 50-50 split of league revenues with the players. As the revenues increase, the salary cap and salary floor would also increase.
- Centralized fund for all local media revenues, with the money distributed equally among all the teams.
The issues of free agency, draft lottery, and arbitration were not addressed in their initial proposal. The league is proposing a seven-year term for the contract.
What’s at stake
This process promises to be a drawn-out battle with both sides determined to hold the course with their bottom lines. The players have repeatedly stated they will never agree to a salary cap, and the owners have repeatedly said the organizational revenue and payroll disparities are not good for baseball, and they are representing the demands of the fans with their proposals.
Some points that both sides will undoubtedly bring out during the course of this negotiation
- A top 10 payroll team has won six of the last seven World Series.
- A bottom 15 payroll team hasn’t won a World Series since the Kansas City Royals in 2015.
- The payroll disparity from the top five teams to the bottom five is almost five times (4.7 exactly), the most on record. The Dodgers’ payroll, including luxury tax, is $407 million in 2026. The Miami Marlins payroll is $74 million in 2026.
- MLB formed a Fan Council in 2025, requesting the input of fans regarding issues important to them. Competitive balance was reported as the most important topic discussed.
- Baseball is at its most popular and financially lucrative status in history. Both sides should be motivated to reach an agreement to maintain this momentum. The fans were alienated significantly with the labor dispute of 1994, when the World Series and a lot of the season were cancelled. It is everyone’s best interest not to have that happen again.
How this affects the Padres
Under the current proposal, the Padres would be one of the teams required to reduce payroll. It is not likely that this proposal will resemble the final proposal. These are the ideal terms the two sides would want to have for their contract. If the two sides can’t come to an agreement it is likely a owner “lock out” will ensue and the season could be compromised significantly.