Major League Baseball proposed Tuesday a delay in implementing a salary cap until the 2028 season, putting other components of its labor offer for 2027 into effect as the current collective bargaining agreement nears its Dec. 1 expiration.
The proposal came as free agency opened Monday. The significant likelihood of an MLB lockout when the current labor deal expires has complicated team planning.
MLB projected a $258.2 million salary cap and a $180.2 million floor for 2028 in a meeting with the union Tuesday. These figures represent an increase from the league's original cap-and-floor offer for 2027, which stood at $245.3 million for the cap and $171.2 million for the floor.
The 2028 numbers reflect a 50-50 split on projected revenue for that year, with player share including hundreds of millions of dollars in amateur signing bonuses. Player share deductions would also align with practices used by other major men's leagues in their cap-and-floor systems.
MLB also proposed giving $282 million in competitive balance tax proceeds to players in cash payments. Players are currently entitled to 50 percent of these proceeds, which fund their 401(k) accounts under the existing agreement. IRS limits cap the present-day distribution at approximately $72 million, leaving hundreds of millions of dollars in excess owed to players in reserve.
Union officials have maintained consistent objection to any salary cap, stating players would lose more than $1 billion over the life of the league's proposal.
Under the Tuesday proposal, competitive balance tax thresholds would remain unchanged for the 2027 season. Based on the 2028 cap-and-floor projections, 12 teams would need to increase their payrolls to reach the proposed floor, including the World Series champion Milwaukee Brewers. Eight teams carried payrolls that would exceed the projected ceiling.
The league's proposal offers flexibility: teams would not be forced to reach the floor in any given year but could spend as little as 90 percent of the floor number provided their spending reflects this over multiple years.
MLB locked out players in December 2021, resulting in a 99-day stoppage that concluded in mid-March 2022. The league formally proposed a cap-and-floor system in late May of this year, the first time since 1994, when players went on strike for 232 days and the World Series was canceled.
