What Would MLB Salary Cap Be? Insider Predicts Likely Scenario amid Payroll Rumors

As MLB and the MLB Players Association begin bracing for a labor battle, owners are working on their proposal that they hope will eventually lead to the creation of a salary cap in the next collective bargaining agreement.

Per The Athletic's Evan Drellich, one person briefed on MLB management's thinking explained that a "reasonable" initial cap proposal to the union could include a $160 million floor and $240 million ceiling:

"A ceiling won't be a hard sell for the richest owners. Teams like the Los Angeles Dodgers, who have a league-high $402 million payroll, the New York Mets and New York Yankees would actually benefit from a limit on their spending.

"'The biggest beneficiaries are going to be the biggest markets, and the biggest losers will be the small markets,' the management source told Drellich. 'They'll have to spend money in order to be a part of this. And the big markets will do well because there will be no pressure from fans to go to $300-400 million payrolls and so forth.'"

Other elements that the league could pursue, per Drellich, is a "hard-cap" system modeled off the NHL rather than the NBA-style cap that allows for more flexibility with tax and apron thresholds.

One byproduct of the NHL system is a restriction on contracts, both in length and money. The league's most recent CBA, agreed to in June 2025, allows for players to sign contracts up to seven years in length if they re-sign with their current club and up to six years with a new club.

For perspective, there are currently 33 MLB players signed to contracts of at least eight years. The longest deal is Juan Soto's 15-year, $765 million pact with the New York Mets.

In the event that owners are able to convince the MLBPA to agree to a salary cap and floor, Drellich did note there would be a "phase-in period" over "a number of years" to give teams the ability to comply with raising or lowering their payroll.

Labor talks between MLB and the MLBPA have not yet engaged in deep talks about a new collective bargaining agreement. The two sides reportedly held a preliminary meeting in November.

The current CBA will expire on Dec. 1, with the expectation being that a labor stoppage is coming. Given how steadfast the MLBPA has been in not wanting anything to do with a salary cap, there is a real threat that games could be lost if a standoff extends into February or March 2027.

MLB hasn't lost games due to a work stoppage since the 1994 strike that began in August and ran through April 1995, resulting in a 144-game schedule for the 1995 season.