Major League Baseball is gaining support for an MLB salary cap, with a potential target for the 2027 season. It's one of many looming battles at the negotiating table when the collective bargaining agreement expires and clubs like the New York Yankees and Los Angeles Dodgers could be among those pushing back against it.
Evan Drellich of The Athletic reported that commissioner Rob Manfred is pushing for an MLB salary cap with an early outline for how he'll convince players to accept it. With the league's labor deal expiring in December 2026, Manfred wants MLB to become the final major North American sport to adopt a salary cap.
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While Manfred and many team owners will argue that a salary cap will benefit players, it's worth wondering if there will be opposition to it from big-market clubs.
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The Dodgers have a compelling argument to fight against any future MLB salary cap, in part due to their significant future payroll obligations, plans made under the current collective bargaining agreement. Los Angeles has a payroll of around $338 million in 2025, with the majority of its core players under contract through 2026. Beyond next season, per ESPN , the Dodgers will owe $1.051 billion in deferred payments from 2028-2046.
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On top of that, Los Angeles could take issue with MLB requiring it to distribute more of its revenue to other clubs. The Dodgers earn $334 million per year from their TV rights deal and, combined with stadium and merchandise revenue, are among the most profitable teams in baseball. If an MLB salary cap is implemented, Los Angeles would be forced to cut back significantly on spending, while small-market teams could potentially spend more of the Dodgers' money on their own rosters.
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Steve Cohen bought the New York Mets for $2.4 billion in 2020 so he could spend as much of his money as he wanted on his favorite team. The deal immediately raised the price for every future MLB franchise that will be sold. Now, many owners are pushing for a plan that would restrict what Cohen can do.
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An MLB salary cap would effectively tie the hands of the richest owner in baseball. While fans of other teams might not like seeing Cohen splurge on top free agents and hand out exorbitant contracts, he's taking the same approach those fans would if they were in his shoes. Cohen paid the $97.115 million luxury tax in 2024, and he'll pay another historic sum this season. A salary cap would essentially mean more of the money Cohen's team makes gets used by other clubs to try to beat the Mets.
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The Philadelphia Phillies might not receive as much attention for spending as the Dodgers, Mets, and Yankees, but they are right up there with the top clubs. This is the fourth consecutive season that Philadelphia has boasted a $240-plus million payroll, and the organization isn't shy about investing more in the years to come. That's in part because of a $2.5 billion deal for 25 seasons, per MLB.com , which also included equity in the network. An MLB salary cap would mean Philadelphia has to significantly cut back its payroll, with some of that money essentially going toward the Miami Marlins and Washington Nationals rosters in the coming years.
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One of the arguments in favor of an MLB salary cap is that it comes with a salary floor, forcing small-market teams to spend more money. However, as Hal Steinbrenner told the Associated Press in 2023, teams like the Marlins, Tampa Bay Rays , and Pittsburgh Pirates are actively choosing not to spend as much money. Instead, owners of those teams allow revenue sharing to cover a significant portion of the costs for their player salaries, which enables them to pocket more of their team's revenue.
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From the Yankees' perspective, the $728 million in revenue they generated in 2024 is already being used to keep other clubs competitive. Forcing New York to reduce its investment in players, just so the likes of the Pirates and Athletics will have $100 million payrolls, is an awful return on New York's investment.
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