Here's Why The Leaked MLB Salary Cap Proposal Means We're Headed For A 2027 Lockout

Major League Baseball is headed for a contentious labor negotiation in the 2026-2027 offseason, as the agreement between owners and the MLB Players Association expires in December. 

The key disagreement between the two sides is expected to be the introduction of a salary cap. Owners want it, and in previous negotiations, players have forcefully rejected it. But for the first time, public opinion seems to have swung the owners' way, thanks mostly to anger over the Los Angeles Dodgers. 

The Dodgers have, unlike most of their competition, fully committed to using every available dollar of their financial resources to build the best possible roster. They have large advantages over their competition when it comes to revenue and finances, without question, but as data from 2024-2025 revealed, they spend a larger portion of it on salaries than most organizations.

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But fans, consumed with anger over one team trying to be competitive in competitive sports, have decided that instead of spending more on payroll, owners should be allowed to limit what players can earn on the open market. Players, unsurprisingly, have balked. This week, the first report of a leaked salary cap proposal hit the internet, and, spoiler alert, it has no chance of being accepted. Though not in the way you'd think.

Commissioner of Major League Baseball Rob Manfred. (Photo by Tony Avelar/San Francisco Giants/Getty Images)

(Getty Images)

Owners Will Never Accept Salary Cap Proposal

Per Heyman's report, "Early estimates suggest proposed salary cap might be set around $260-280 million and floor around $140-160 million."

That ain't happening. 

Per Fangraphs, there are several combinations of teams whose opening day payrolls for the 2025 season were under $160 million combined. The two lowest spending teams for 2026, in terms of payroll commitments, are the Marlins and Cleveland Guardians. Those two teams, combined, have just $155 million in player payroll obligations. Anyone who thinks those organizations are going to agree to quite literally double their spending on player salaries is also probably shopping for oceanfront property in Kansas. 

Some have argued that increased revenue sharing would make up the difference. But there's little chance that increased revenue sharing would cover that much payroll, and even less chance that owners in those markets would invest all that new revenue sharing income back into player payrolls.

Let's take a hypothetical scenario, where the bottom 15 teams in the league get an extra $100 million, per team, in revenue sharing. That's $1.5 billion. The top 15 earning teams in 2024 only earned an estimated $7.4 billion combined. Why on earth would those organizations agree to give away another 20% of their revenues when they are already giving away 48% of their local net revenue into a league-wide pool?

If the argument then becomes, let the Dodgers and Yankees contribute the majority of it… well, those two teams combined in 2024, per Forbes, made $1.5 billion. They quite literally do not make enough money to fund the Marlins spending an additional $80 million in payroll. 

There's simply not enough revenue to go around to make the Marlins or Athletics spend more money. And in fact, Ken Rosenthal reported that some small market teams are going to make $200 million in revenue sharing, luxury tax penalty distributions, and national television income. Not including tickets or their own local market income. They still aren't spending. Even if, somehow, the other teams agreed to give Miami $100 million extra, they will not spend $80 million of it on payroll. They won't do it.

Forbes even estimated that Miami brought in $317 million in revenue in 2024 and spent $86 million on total player obligations. Do people seriously believe that if they made $417 million in revenue, their percentage spent on players would jump from 27% to 38.4%? Of course not. Many of these small market teams simply do not care about winning. This is an investment. That's all. 

If this is truly the proposal, it's dead in the water. Not just because players don't want a cap, but because the cheaper owners will never agree to spend higher percentages of their revenue on payroll. Even if MLB took all $12 billion in estimated revenue and forced it to be equally distributed between teams, that's just $400 million per team. The Marlins already made $317 million in revenue and spent $86 million on players. It ain't happening.