MLB Owners Set 2028 Salary Cap Proposal Amid Labor Deadline

Major League Baseball owners proposed a hard salary cap of $258.2 million on Tuesday, aiming to implement the limit in 2028 rather than the immediately following season. The proposal includes a salary floor of $180.2 million for that same year. This move comes one day after free agent negotiations opened for the 2026-27 offseason and as the current labor contract nears its expiration date.

The owners argue that teams have too many existing financial commitments to reduce spending quickly enough in 2027. Glen Caplin, an MLB spokesman, stated that clubs require a full offseason to prepare for the new operating system. The proposal allows teams to spend as low as 90 percent of the floor in 2028, which equates to $162.18 million, but they must spend the full floor amount over a three-year period.

Management tied the proposal to a 50-50 split of revenue with the players. Under the plan, MLB would keep the current luxury tax system for 2027 with the same thresholds as 2026. In 2028, the league would centralize media revenue. Caplin said this approach would allow a smoother transition into the cap and floor system without delaying key player benefits. Those benefits include earlier free agency and a $1 million minimum salary.

The players’ association has consistently stated it will not accept a hard cap. The union criticized the owners for proposing a system designed to increase franchise values. The union described the plan as a zero-sum system that harms the middle class and pits players against one another. It also claimed the proposal would strip competitive advantages from smaller market teams and reduce amateur signing bonuses by $400 million in 2027.

The financial impact varies significantly across the league. Management calculated that eight teams would need to reduce their current payroll by a combined $528 million to meet the 2028 cap. These teams include Boston, the Chicago Cubs, the Los Angeles Dodgers, the New York Mets, the New York Yankees, Philadelphia, San Diego, and Toronto. Conversely, twelve teams would need to increase their spending by $636 million to reach the floor.

The proposal also adjusts minimum salaries and bonus structures. The minimum salary would rise from $780,000 to $1 million for players with two years of service. For others, it would increase to $900,000. Minor league minimums would also rise, going from $63,600 to $73,400 for initial deals. The pre-arbitration bonus pool would grow from $50 million in 2026 to $65 million in 2027, eventually reaching $75 million over a seven-year agreement.

A one-time bonus payment is included in the offer, funded by luxury tax proceeds currently earmarked for player 401(k) accounts. Players who spend at least 172 of the 187 regular season days in the majors would receive $285,000. The current five-year labor contract expires on December 1, and management is expected to lock out the union if a deal is not reached by then.