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OF ALL THE things to cause outrage, to intensify the bleating that baseball is broken and the Los Angeles Dodgers are the culprit, the signing that generated the most consternation was that of a relief pitcher. Not Shohei Ohtani's $700 million contract in 2023. Not the $325 million guaranteed to Yoshinobu Yamamoto a few weeks later. Not the $182 million that added two-time Cy Young winner Blake Snell last offseason. Not even the drastically under-market deal signed by Japanese phenom Roki Sasaki that winter. There was something about the four-year, $72 million contract given to left-hander Tanner Scott in January that infuriated fan bases in every market outside of Los Angeles -- even the only one that dwarfs it.
"It's difficult for most of us owners to be able to do the kinds of things they're doing," New York Yankees owner Hal Steinbrenner told the YES Network a week after the Scott deal. That the Yankees -- the most valuable franchise in baseball, the game's foremost revenue machine, owners of the highest payroll each of the first 14 years this century -- had joined the chorus typically reserved for smaller-market teams questioning the game's fairness was no accident. Even if formal discussions about Major League Baseball's next collective bargaining agreement are half a year away, the campaign to capture the hearts and minds of the paying consumers has already begun.
So far, the case made by Steinbrenner and a cadre of other influential team officials has focused more on what's wrong with baseball's current financial system than what they would prefer in its place. That preference, according to conversations with more than two dozen people -- including officials from MLB and the MLB Players Association, players, owners and personnel from the other three major men's North American sports -- need not be spoken aloud to be understood.
MLB wants a salary cap, and between now and Dec. 1, 2026, when the current collective bargaining agreement expires, those two words -- which owners regard as a necessity and the MLBPA as a profanity -- could presage the fate of the 2027 season. Owners, sources said, have not yet decided whether they will take the biggest run at the implementation of a cap since 1994, when the union's refusal to budge on the matter led to the cancellation of the World Series. Players are preparing for it, though, and plan to refuse any such entreaties, regarding a continued pursuit of a cap as a declaration of war.
Without the exceptional spending of the Dodgers and New York Mets in recent years, the case for MLB to forsake the economic system that has led to more than a quarter-century of labor peace would not have nearly the public support it does. And yet the purported facts pertaining to salary caps, which exist in the NFL, NBA and NHL, are often misunderstood.
What's not is the disparity between what the Dodgers are spending on their payroll compared with their peers. Currently, sources said, Los Angeles is carrying a $340.9 million payroll. Because the Dodgers have exceeded every threshold of the league's luxury tax -- which kicks in at $241 million and includes penalties for repeat offenders -- they owe an additional $167.4 million.
The Dodgers' total projected outlay of $508.3 million is just a few million dollars shy of the combined payrolls of the game's six lowest-spending teams -- Miami, the Athletics, Tampa Bay, the Chicago White Sox, Pittsburgh and Cleveland -- all of which carry sub-$100 million rosters. Los Angeles will pay more in penalties than 16 teams do for their whole roster and have guaranteed enough going forward that they're already over the CBT threshold for 2026 and, if it's still around, 2027.
On the day of Scott's signing, MLB Trade Rumors ran a two-question poll for its readers. The first asked: "Do you want a salary cap in the next MLB CBA?" After more than 35,000 votes, the results -- however skewed by the frustration over the Dodgers' spending and use of deferred money -- were overwhelming: 67.2% said yes. The second question painted an even darker portrait: If it meant the implementation of a cap, 50.2% of respondents said they were willing to lose the 2027 season.
The Dodgers' relative struggles this season have cooled some of the pro-cap pontification. Rather than some unstoppable machine, they've been merely very good: 85-67 (tied for the fifth-best record in MLB) with a run differential of +122 (fifth in baseball). The optics of their profligate spending nevertheless brand them as a symptom of a system run amok. Whether the inequities -- some real, some perceived -- define the game enough to warrant a wholesale overhaul of its economic system is a decades-old debate once again being relitigated, regurgitated talking points and all.
"The only way to fix baseball is to do a salary cap and a floor," Dick Monfort, the Colorado Rockies owner and chair of the league's labor committee during the most recent basic-agreement negotiations, told the Denver Gazette in March. Other owners, including Baltimore's David Rubenstein, have explicitly addressed the need for a cap, a change from the unspoken compact that since 1994 has treated the topic as a third rail.
Players have greeted the new tack with pushback. Philadelphia star Bryce Harper stood nose-to-nose with MLB commissioner Rob Manfred and told him any talk of a cap would require him to "get the f--- out of our clubhouse" earlier this summer. Union officials, in their own meetings with teams, have made abundantly clear their position: A cap is a red line, and any time spent discussing it is wasted.
How much of the rhetoric is pretense and how much is real will reveal itself over the next 14 months. Both sides have other pressing priorities for now: MLB is trying to navigate the collapse of the regional-sports-network model that for years enriched teams via local television contracts, and the MLBPA is under investigation by federal investigators looking into alleged financial malfeasance. Soon enough, the calendar will bring the sides to the bargaining table and force them to train their attention on the ideological chasm that exists. It's not just the 2027 season that's at stake. It's the future of the game.
WITH A LITTLE over a week left in the 2025 regular season, all eight teams that have exceeded the luxury tax threshold this year are in position to make the playoffs. Even though the Dodgers are not the juggernaut they seemed heading into the season, October nevertheless beckons. And if the Mets can maintain their fragile hold on the final National League wild-card spot, it will leave just four opportunities for the remaining 22 teams.
MLB's argument for a cap starts with shrinking the economic disparity to foster fairness regardless of market size and revenue. Payroll correlates more strongly with winning in baseball than in any of the capped sports, and this reality alarms league officials.
"How do we compete?" one midsized-market team president said. "We try to do everything right. We draft well. We develop well. And then we get the s--- kicked out of us by clubs that buy their players. It feels like the game is rigged."
Though the late 1990s and mid-to-late 2000s come close, never before has there been a payroll divide like today. Money does not guarantee winning -- the 2023 Mets, 2023 Yankees, 2019 Cubs and 2019 Red Sox all carried top-two payrolls and spent their Octobers at home -- but it certainly helps. The same high-spending teams dominate the winter -- over the past three years, the Dodgers, Mets, Yankees and Phillies have signed 10 of the 17 nine-figure free agents -- and target the top-tier talents with whom lower-revenue teams typically don't engage.
"I don't blame owners for not wanting to lose money," one small-market owner said, voicing a long-held contention of MLB teams: They are simply not very profitable. While that is unknowable -- only the Atlanta Braves, who are owned by Liberty Media, share their financials publicly -- Forbes this year in its valuation of MLB teams estimated that 11 had lost money, led by the Mets at $268 million. The other 10 teams, it said, bled $311.5 million combined. MLB's profitable teams, in the meantime, made a combined $639 million, with the Red Sox at $120 million profit and the Cubs at $81 million.
But fans don't follow their teams for profit-and-loss statements, and the belief among those in favor of a cap is that lessening financial disparity will improve competitive balance. Certain data points support this idea. Teams with top-10 payrolls reach and win the World Series significantly more often than lesser spenders. Smaller markets -- which, in almost every case, likewise carry smaller payrolls -- are practically nonexistent at the end of October.
And yet, as the MLBPA attempts to fight the prevailing narrative that the game would be better off with a cap, it can point to small-market success stories which illustrate that the have-nots in baseball can win.
The best team in MLB this season carries the 21st-highest payroll in the game at around $115 million. Only three of its 28 players signed as free agents -- and one of them re-signed after being drafted and developed by the organization. The Milwaukee Brewers are an anomaly, yes, but they are also a compelling counterpoint to the notion that financial disparity disqualifies small-market, low-revenue teams. And they are not alone. The Tampa Bay Rays made the World Series in 2020 with the 28th-ranked payroll, and the Cleveland Guardians reached the American League Championship Series last year with the 23rd.
None of the three has won a World Series this century, but more than half of MLB teams (16) have. That beats the NHL (14), NFL (13) and NBA (12). Other measures point to parity on par with the other sports: The number of teams to make the playoffs in the past half-decade and decade, those that made it to the final four and even those that reached the championship series, is similar to -- and, in some cases, better than -- the capped leagues.
This is where the cognitive dissonance of a cap reveals itself. How should a league judge parity? What do fans desire? What's signal; what's noise?
At the end of the day, as a large-market owner acknowledged, more than focusing on flattening payrolls and increasing competitiveness, the primary benefit -- and motivation for a significant number of owners -- of a cap is increasing franchise values. If baseball teams are a break-even business, as officials often contend, the easiest area in which owners can make a return on their investment is in the growth of the asset. In recent years, the owner said, the value of MLB franchises has plateaued, particularly when compared with the three capped sports, prompting frustration among owners and impelling the push for a cap.
"That's what this is all about," one longtime labor lawyer said. "That if the costs are fixed, the franchise values will go up."
THE UNION'S ANTI-CAP beliefs are every bit as fervent -- if not more than -- as MLB's pro-cap line. From Marvin Miller to Donald Fehr to Michael Weiner, nearly five decades of union leadership has instilled in players the creed that a cap is more problem than panacea. During the union's tour this season around clubhouses, players said, union officials have railed against the idea.
Manfred and league officials have pitched players on the notion of money left on the table. In a capped system, the parties would first define baseball-related revenue, then negotiate a percentage that goes to the players. Although any discussion of the revenue pool would be contentious -- for example: would it include money generated by ancillary businesses owned by teams, such as the Battery that surrounds Atlanta's Truist Park? -- the league has leaned strongly into the idea that players would make more money under a cap than they do now. Some of the 1,200 members who comprise the MLBPA buy the argument.
"Most of my younger guys want a cap," one agent with more than a dozen major league players as clients said. "They see it in the other sports. It's normalized to them. And they think for everything they could get in bargaining -- especially more money earlier in careers or earlier free agency -- it would be worth it."
Multiple agents agree that there are plausible scenarios in which players would benefit in the short and long term from a cap. Acceding to one could allow the players to negotiate earlier free agency, for example, which the league would never consider otherwise.
But union officials have spent their own sessions pushing back on the idea that a cap is a salve. Why, they said, would teams be any more inclined to grow revenues in a capped system than they are in an uncapped system? If a cap means more money for younger players, why can't the same be the case in an uncapped system? If a cap would guarantee players a larger share of industry revenues, why can't an uncapped system?
Ultimately, the skepticism of a capped system is rooted in two principles, which the union full-throatedly shares with players. The first is the detriments of a ceiling on player salaries; caps are zero-sum, the union reminds them. And any conversations about money are theoretical, at least for now. One area in which owners have yet to find agreement, sources said, is what a capped system in baseball would resemble. The NBA has a soft cap with significant penalties for overages and a salary floor at 90% of the cap. The NFL is hard-capped, with a firm ceiling and a floor of 89% of the cap over a four-year period. The NHL's system includes a hard cap of $95.5 million and a floor of $70.6 million.
In its first proposal during the 2021-22 negotiations that led to a 99-day lockout by MLB, the league offered a $100 million floor with a $180 million soft cap -- $30 million less than the previous first threshold of the luxury tax, also known as the competitive balance tax (CBT). The MLBPA quickly condemned the plan, and the league backed away from blowing up the game's economic structure in its later offers.
The second principle the union is sharing is that every deal after the first is bound to get worse. Look at the three capped sports. They've gone backward in terms of revenue split. In the NFL's initial collective bargaining agreement with a cap in 1994, the players received 64% of revenue. Today it's 48%. Basketball (1984) and hockey (2005) started at 57%. Now it's 51% in the NBA and 50% in hockey.
"Once you're in a capped system, you never get out," one MLBPA official said. "Whatever that special introductory offer is, once they have you, they know you've lost."
AS MUCH AS MLB wants a salary cap now, multiple owners said they believe the only real path to one would require missing the 2027 season. And as unpalatable as that is to players, it's similarly so to owners, not just because of what they'd lose out on today but the money they would cede in the future.
The collapse of regional sports networks has left Manfred with what could be a blessing in disguise. MLB's national television contracts expire following the 2028 season. Between now and then, Manfred hopes to whip up support across the game to nationalize local rights, too. Although convincing the Dodgers, Yankees, Red Sox, Cubs and other teams with their own RSNs or strong local television deals to join a potential 30-team package won't be easy, multiple sources said the league is confident in its ability to consolidate local rights and shop them to streaming services that would pay billions for a guaranteed audience on nearly half the nights of the year.
Provided that audience is still there. Manfred worked for MLB in 1994 and is acutely aware of how destructive the lost World Series was for attendance and television ratings. If MLB is going to maximize its TV rights, doing so coming off a down ratings year in 2028 after losing the 2027 season could prove financially calamitous.
"It's going to be very hard to have a cap in this round of bargaining," the longtime labor lawyer said. "Because the media transition is still ongoing."
It's not the only item on Manfred's docket, either. He hopes to name two expansion franchises and devise realigned divisions before his planned retirement in January 2029. All of that uncertainty makes an endeavor already fraught with peril even more so -- and sets up the sort of centralization of revenues that mimics the capped leagues. Whether the players would be any more open-minded to a cap then than they are now could be determined in the years to come.
In the meantime, the argument over a cap will rage. The league will continue to make its case to a public that has increasingly warmed to the notion of something to fight back against the big spenders in the same way MLB tried to in the late 1990s when the Yankees were the Evil Empire and the CBT was introduced to tamp down the spending gaps that pervaded the sport.
"It hasn't worked," one league official said.
Neither at the top, where the Dodgers are spending half a billion dollars, nor at the bottom, where the A's have carried an Opening Day payroll that ranks among the bottom quarter of the league for 18 consecutive seasons, as have the Pirates for 21 of 22 campaigns, and the Rays for 24 straight years. Over the past three winters, 13 teams have not guaranteed a free agent deal for more than $50 million, an alarming figure that speaks to the aversion of some owners to play even in reasonable financial sandboxes.
Without a floor, there's not much the MLBPA can do other than hope the teams at the top continue chasing wins. And with that comes more disparity, a likelier scenario in which CBT payors continue to rack up wins, and further bifurcation in a system whose warts have grown ugly enough that the public is skeptical it can be fixed.
It's why Tanner Scott, of all people, caused the consternation he did on that mid-January day. It wasn't just what the Dodgers had assembled; it was that all of their advantages -- the TV deal, the other revenue streams and the munificent ownership group that reinvested in the on-field product -- would allow them to continue outspending their peers by hundreds of millions ad infinitum without outside intervention.
As long as the leviathans continue to invest in high-end stars and push payrolls to places previously unimaginable, status quo suits the MLBPA just fine. They can tweak revenue sharing, offer incentives to lower-revenue teams that spend, juice CBT penalties. The drawbacks to capped systems, in the eyes of union and player leadership, are too plentiful for them to even entertain the idea. Just look, one veteran player said, at the NBA. If a capped system is so good for all parties involved, why are the LA Clippers being accused of trying to circumvent it with an off-the-books deal for star forward Kawhi Leonard?
"I don't want one team spending half a billion dollars and another spending $50 million, either," he said. "But if a cap is the only answer, we're all in trouble."
