MLB Owners Push First Salary Cap Since 1994 as Lockout Threatens the 2027 Season
Major League Baseball's collective bargaining agreement with the players union expires December 1, 2026, and team owners have proposed a salary cap for the first time since 1994, a red line the players' union has rejected for decades. MLB Players Association interim executive director Bruce Meyer has told reporters a lockout once the deal expires is "all but guaranteed."
The fight centers on money. MLB's 30 teams posted an average EBITDA margin under 2% in 2025, with average team revenue of $426 million against average earnings of just $7 million, according to CNBC's analysis of team financials. That compares with profit margins of roughly 20% to 22% for the NFL, NBA and NHL, all of which operate with salary caps. Owners have also floated a salary floor requiring low-spending teams to guarantee at least $171 million in payroll, alongside the cap.
History looms over the talks. The last work stoppage, a 99-day lockout after the 2021 season, delayed the start of the 2022 season. The 1994-95 players' strike, the longest in the sport's history at 232 days, wiped out that year's World Series and canceled 948 games. Analysts warn that if the two sides remain far apart by early March 2027, the start of next season would be in genuine jeopardy.
What supporters say:
Owners argue a cap would narrow the payroll gap between big-market and small-market teams, addressing what they call chronic competitive imbalance.
A cap paired with a mandatory salary floor, as MLB has floated, would force perennially low-spending franchises to actually invest their revenue in payroll.
Supporters point to the NFL, NBA and NHL, which all operate under caps and post far healthier profit margins than baseball currently does.
What critics say:
The players' union calls a cap a nonstarter, arguing the sport's real problem is that some owners simply choose not to spend, not a lack of cost controls.
MLBPA's Bruce Meyer has said "every team in baseball can afford to compete, many are choosing not to," placing blame on ownership decisions rather than system design.
History is a warning sign: the last time owners pushed this hard for a cap, in 1994, the result was a canceled World Series and a strike lasting 232 days.
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