MLB salary cap would mean pay cut for players and ‘eradication’ of amateur signing bonuses, union says

Bruce Meyer, the interim head of the Major League Baseball Players Association, said Monday he was “very surprised” by the details of the salary-cap proposal owners made four days earlier. The union’s analysis of the offer showed players would make less money overall — and that amateur players who turn pro would be particularly hit hard.

“I thought they would try harder to make it look good, and they didn’t even do that,” Meyer said on a video conference call with reporters.

The players and owners both made opening economic proposals last week in a collective-bargaining process that’s expected to take until next spring at the earliest. MLB proposed that starting next season, teams could spend no more than $245.3 million on salary, along with a mandated floor of $171.2 million — a huge change for baseball, the only prominent league in the U.S. that does not have a cap and floor.

Owners are framing the push for a cap around a desire to improve the sport’s competitive balance. Players, however, have long opposed a cap system on economic grounds and others, setting up a contentious labor battle.

Cap systems typically come with a revenue split: an agreed-upon distribution of the overall money the sport takes in. MLB proposed players and owners start out with an even 50-50 split but the union said players already earn more than half.

“Using MLB’s definition of revenue and player share as set forth in their proposal and their presentation to us, player share under their proposal would go down,” Meyer said. “Player share for this season, 2026, is projected to be well over 50 percent, using, again MLB’s definitions of revenues and what counts against player share.

“Had MLB’s proposal been in place in 2026, players, we estimate, would lose over half a billion dollars.”

Glen Caplin, an MLB spokesperson, responded with a statement Monday: “Our salary cap-and-floor proposal addresses our fans’ concerns by leveling the playing field while sharing baseball revenue with the players 50-50 like the other leagues. Under our proposal, major-league players will receive more compensation in year one of the system than in 2026. We are ready to listen if the MLBPA wants to counter our proposal at the bargaining table.”

Two discrepancies are at play here. Many of the fights that await the players and owners will center on how different areas of spending are counted, and the first discrepancy is in that category.

Meyer argued that the share of money that goes to the players or the owners — in this case, the 50-50 split MLB is proposing — “doesn’t tell you anything unless you know how ‘share’ is defined.”

“People should be aware their proposal deducts billions of dollars in expenses,” Meyer said. “It’s not even a real 50 percent.”

The second discrepancy centers on whether big leaguers should care if newly minted minor leaguers make less money. Because if the players’ overall share is coming down in the league’s proposal — from above 50 percent, as the union says it is, to 50 — yet MLB players themselves are not taking salary cuts, then the difference is owed to a change elsewhere.

The union expects that the league is planning to propose greatly reducing the nearly $600 million that clubs pay annually to domestic and international amateur signees — the top prospects from schools throughout the U.S. and other countries, such as the Dominican Republic.

“They projected MLB players’ payroll in ’27, ’28, would be flat,” Meyer said. “The only way to get to even those numbers would be to drastically reduce or eliminate amateur entry compensation, both domestic and international. And maybe forms of benefits too.

“They haven’t made a proposal on that, but from what they’ve given to us, it seems clear that their projections build in effectively an eradication, or almost complete eradication, of things like amateur signing bonuses.”

Meyer said amateur players are “in many ways the most vulnerable; players coming in without a lot of resources, mostly.”

When the players made their proposal, they offered a set of changes across different economic buckets: they proposed nearly doubling the minimum salary, for example, to $1.5 million. The owners, however, chose to wait to address key player-pay issues in that and other areas.

That includes the minimum salary, time to arbitration, time to free agency and the luxury tax. MLB is expected to eventually offer gains for players in those areas as inducements for switching over to a cap system.

The league has argued that the union’s opening proposal — which would raise the first tier of the competitive balance tax to $300 million, a $56 million increase from today — would not improve the sport’s parity. (the sides disagree on whether baseball’s competitive balance is broken.)

The league accused the union of actually offering to make it easier for the Los Angeles Dodgers, the two-time defending World Series champions, to continue to outspend everyone.

“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,” Caplin of MLB said last week.

Meyer fought back against that idea generally Monday.

“They’ve said, ‘Well, but your CBT proposal, the tax threshold is so high that that would reduce the amount of luxury tax proceeds,’” Meyer said. “It’s the complete opposite of what the league argues (otherwise).

“When the league tries to make the disparities look greater, they actually include those luxury tax proceeds as part of spending — even though half of it goes directly to the smaller-market teams.”

We’ve arrived at a different counting dispute. Last week, MLB commissioner Rob Manfred referenced a $446 million gap between the Dodgers and the team with the lowest payroll in baseball, the Miami Marlins, from last season. Manfred described that gap as an unfair fight.

But the union doesn’t think $446 million is the best figure to use. That amount includes player payroll as well as how much the Dodgers paid in luxury taxes.

It’s undoubtedly the case that the Dodgers had to pay a luxury tax bill for 2025 of about $169 million. What the union argues is that luxury tax payments are not payroll, however — because some of that money goes right back to teams.

“The payroll disparity is actually exaggerated by the way the league lumps in luxury tax penalties,” Meyer said.

Ultimately, the union wants to see smaller-market teams spend more.

“Every team has the ability to do what the Brewers are doing, what the Padres have done, or what Tampa has always done,” Meyer said. “One of the things that I find kind of ironic in a perverse way: if Team X decides we’re not going to spend money on players, well, that increases the disparity in payroll, right? They can themselves increase the disparity by choosing not to spend.

“We want to encourage more San Diegos,” Meyer continued.

Meyer said the league and the union do not yet have their next bargaining meeting scheduled. The current labor agreement runs through Dec. 1. The owners are likely to start a lockout if a new deal hasn’t been reached by that time, and the industry expectation is that sides will still be far apart at that point.

“Even if we’re not making progress on the major economic components, there are a lot of other things that we bargain over,” Meyer said.

Monday’s press conference was something of a departure from the last set of negotiations in MLB five years ago. While the league and the union held plenty of press conferences during that process, which produced a lockout from December 2021 until March 2022, those were later in bargaining.

What remains to be seen is whether the sides find a way to play a full 162-game season in 2027. If owners stick to a cap, games could wind up canceled. The last time owners proposed a cap was in 1994-95, when a 232-day strike canceled the 1994 World Series.

“Our union has never been broken and never will be,” Meyer said. “You can take away a different lesson from our history, but that would be a big mistake.”