NEW YORK — Major League Baseball is building its public arguments for a salary cap around parity, and in particular, a perception by fans that small-market teams cannot compete. That effort continued on Wednesday, when during his first press conference since the league and players’ union exchanged initial proposals for a new labor deal, commissioner Rob Manfred took aim at the sport’s luxury-tax system, designed to deter large-market spending.
“We have tried mightily over several rounds of bargaining to use a competitive balance tax to address competitive concerns, and sometimes, you got to admit you failed,” Manfred said at MLB’s headquarters, where the league was holding owners’ meetings.
But whether fan perception is reality is hotly contested. Manfred has spoken well of baseball’s parity in the past. And the union’s opposition to a salary cap is so well known that Manfred acknowledged he worries MLB could wind up repeating the ugly conflict that stemmed from the league’s last serious push for one — a 232-day strike from 1994-95 that included a canceled World Series.
“Of course I do. Of course I do,” said Manfred, who at the time worked with MLB as outside counsel. “We want to make an agreement. We made a proposal on one set of topics at the outset of negotiations.
“I went and said myself: Look, we’re open to whatever ideas people have. But we need a realistic framework that addresses the fans’ concerns about competitive balance, and you just can’t ignore that financial penalties have not gotten it done for us.”
Manfred declined to answer, however, whether the league’s desire for a cap this time around would be worth an extended lockout. The current labor deal expires in December, and a new one would probably need to be in place by mid-March to avoid the cancellation of at least some games during the 2027 season.
“I’m not going to speculate about work stoppages,” he said.
The MLB Players Association argues that baseball’s parity is just as strong as other sports’, if not better. The union also blames the clubs themselves for the sport’s payroll disparity, where in the extreme, one team (the Los Angeles Dodgers, $420 million, per Cot’s Contracts) has about five times the payroll as another (the Miami Marlins, $83.6 million). When some teams choose to spend less on players, they exacerbate the gap, interim union head Bruce Meyer said Monday.
Over time, Manfred has offered what appear to be contradictory statements on the state of parity. For example, in October 2024 he told The Athletic that baseball has had a “darn good” record in that area.
He was asked on Wednesday about that comment.
“In the context, particularly of the postseason, where you’re trying to generate interest and maximize viewership, I think it’s important to emphasize competitiveness,” Manfred said. “And there are aspects of competitiveness: we haven’t had repeat winners (recently) until the Dodgers.
“When we think about it from a labor perspective, we’re focused on an entirely different part of the calendar. And that’s the offseason, when you’re trying to sell season tickets, and the perception among our fans that’s really strong that we have a lack of competitiveness.”
Fan perceptions do not always motivate major change — not unless they’re having major impacts. Considering MLB’s ratings and ticket sales figures have generally improved in recent years, has MLB identified quantifiable ways that this perception is harming them?
“We actually have spent a lot of time on this topic, and teams that go through periods, particularly longer periods, of non-competitiveness, not only have lower revenues, but they are slower to recover once they become competitive,” Manfred said Wednesday.
He didn’t offer specific figures.
While MLB doesn’t advertise it as readily, there is another area where owners believe they’re suffering in the current system: franchise values.
It’s unclear when the league and the union will next meet. Manfred said that “every deal that gets made has to achieve some of the things that we’re looking to achieve and some of the things that the union is looking to achieve.”
“We’re going to get back to the table, and, I hope, have productive conversations,” he continued. “There’s a lot of topics we haven’t even started on yet. I’m anxious to get back in the room.”
Both sides last week made opening economic proposals. MLB wants to limit each team’s payroll to $245.3 million with a minimum of $171.2 million, starting in 2027. The players, meanwhile, want to institute a soft salary floor starting at $150 million with no cap. The union also wants to raise the first tier of the luxury tax to $300 million, up from the current $244 million.
There’s much more to the proposals, and the sides are worlds apart, which is not necessarily unusual for the start of a negotiation. But Meyer of the union earlier this week called the league’s proposal “the worst system for players in any of the major sports, and (it’s) not even close.”
The PA made proposals around some core financial subjects the league did not, such as the minimum salary, which the union wants nearly doubled to $1.5 million. The players also proposed earlier access to arbitration and free agency.
As talks progress, the league is expected to dangle gains in those same areas as a means of convincing players they’ll be better off with a cap. Manfred on Wednesday seemed to hint at that possibility.
“There’s proposals and there’s goals behind proposals, right?” Manfred said. “We’re looking at their proposals, trying to figure out what they’re trying to achieve, and whether we can meet some of those goals and still achieve the things that we’re looking to achieve.”
One area the league hasn’t made a formal offer on yet has already taken center stage: amateur signing bonuses.
As part of the cap-and-floor system, the league wants the two sides to share industry revenues equally every year. The union believes that by the league’s revenue definitions, however, a 50-50 split in 2026 would result in a $500 million loss for players overall.
But that’s in part because the league appears poised to ask to greatly reduce the money teams pay amateur players to become professionals. MLB teams spend close to $600 million annually on domestic and international prospects.
Those players, though, do not immediately become big leaguers: and Manfred emphasized that the league’s proposal benefits “major-league players.”
“All I can tell you about our initial proposal is it was specifically constructed to ensure that in the first year of the contract, major-league players would make more money than they made in 2026,” Manfred said. “To the extent that anybody’s suggesting something other than that, it’s just not accurate.”
Asked how the cap system would impact amateurs, Manfred said only, “We haven’t made a proposal on amateur yet.”
A proposal that gives players an increase in 2027 from their 2026 haul, as Manfred touted, doesn’t necessarily say much about the merits of the proposal. Historically in baseball, players and owners both typically make more money year over year.
MLB has not offered a public estimate of the league’s revenues in 2025, and Manfred passed on the opportunity on Wednesday when a reporter asked. In 2024, the haul was $12.1 billion.
Both sides could do better, Manfred is arguing, if the players buy into what the league is offering.
Back at the 2018 All-Star Game, Manfred said, “I know the correlation between winning and payroll in baseball is extraordinarily weak.”
He offers a different view now.
“The players are smart people,” Manfred said. “I think they understand that payroll is a significant advantage for certain clubs, and that high payroll clubs win more than low payroll clubs.”
