It has been less than a year since the labor strife in baseball ended.
The Major League Baseball and Major League Baseball Players Association finalized a collective bargaining agreement on March 19. That came after owners locked the players out for 99 days.
The CBA stretches through 2026. Thus, it would seem the sport should have some labor peace for at least a few more years.
However, storm clouds are already forming on the horizon because of the player payroll disparity among MLB’s 30 teams.
The New York Mets are projected to have a $336-million payroll at the start of the upcoming season, which would be the largest in baseball history. Conversely, the Athletics’ payroll is expected to be $40 million as there is uncertainty concerning whether the franchise will remain in Oakland or move to Las Vegas.
In simple mathematical terms, the Mets’ payroll will be more than eight times higher than that of the Athletics.
In addition to the Mets, six more teams are expected to have payrolls of at least $200 million: New York Yankees ($267 million), Philadelphia Phillies ($231 million), San Diego Padres ($219 million), Los Angeles Dodgers ($217), Toronto Blue Jays ($206 million) and Los Angeles Angels ($202 million).
The Athletics are among nine teams expected to have payrolls under $100 million: Baltimore Orioles ($50 million), Pittsburgh Pirates ($60 million), Tampa Bay Rays ($64 million), Cincinnati Reds ($70 million), Cleveland Guardians ($75 million), Kansas City Royals ($77 million), Washington Nationals ($77 million) and Miami Marlins ($81 million).
Commissioner Rob Manfred believes payroll disparity is among the sport’s biggest problems and has formed a committee comprised of team owners to study the matter. Yet the last CBA did little to address the matter beyond changing luxury tax thresholds.
Manfred believes MLB needed to be a “more national product.”
“When I talk about a more national product, sort of the thought there is that a more national product produces more centrally shared revenue, which, in turn, we hope, would reduce payroll disparities,” Manfred said. “At various times, we have talked and proposed, including in the last round (of collective bargaining talks), about direct payroll regulation, in addition to that, having a minimum payroll.
“We remain open to those sorts of solutions. Obviously, we’re a long way from the next round of bargaining, but there are ways to get at it.”
In other words, without saying it directly, Manfred wants a salary cap as part of the next CBA.
The owners have tried to install a salary cap for more than 30 years and they are part of the economic structures of the NFL, NBA and NHL. However, the MLBPA wants no part of a cap and any talk about a system of that system have constantly been a non-starter in negotiations.
Not surprisingly, MLBPA executive director Tony Clark shot down the idea of a salary cap out of hand last weekend while meeting with reporters at the union’s new satellite office in Phoenix.
“The question that should be asked in regards to one team’s payroll versus another, is whether or not that team is making a conscious decision to have its payroll there, or whether it has the ability to increase its payroll,” Clark said. “The answer is the latter, not the former.”
The lockout that ended last year was MLB’s first work stoppage since the 1994-95 strike. While it is still early, the game seems headed for another shutdown by the end of the decade.
For decades, collective bargaining agreements have been the backbone of the Major League Baseball (MLB) players’ union, ensuring stability and peace within the league. But with the expiration of the current collective bargaining agreement in 2027, the imminent threat of a work stoppage looms.
Recent reports from prominent outlets, including The Athletic and ESPN, suggest that conditions have already been set for an acrimonious labor dispute in 2027 with signs of strife already emerging. Season length, salary caps, and other items are potentially up for negotiation, which could delay the start of the 2027 season.
The most recent collective bargaining agreement, which was signed in 2016, included a number of controversial provisions. The agreement opened the door to international free-agency — allowing a player to become an MLB free agent if they did not sign a long-term deal with their current club — as well as providing teams with luxury tax exemptions for the 2022 and 2023 seasons, reducing the penalties for teams paying over the luxury tax threshold.
In addition to these provisions, the agreement also included certain provisions that could be at the root of any potential labor dispute in 2027. One such provision is the introduction of the soft salary cap, which caps team payroll at a certain percentage of league revenue. This caps wages and prevents teams from outspending their rivals to compete for the best players, something that could potentially be a talking point in any future negotiations.
The current collective bargaining agreement is due to expire following the conclusion of the 2026 season, setting the stage for a possible labor stoppage the following year. Although the MLB Players Association has not publicly declared its stance on the matter, the union has been vocal on other issues such as free agency eligibility, minimum salaries and the implementation of a universal salary structure, which could all feature heavily in any future negotiations.
At the same time, the league has already begun formulating a strategy to prepare for the next round of collective bargaining. MLB owners are reportedly unifying around the idea of a hard salary cap as well as maintaining their current competitive balance system, which could become contentious issues in any potential labor dispute.
The threat of a potential work stoppage in 2027 casts a dark cloud over the league and its future. While a labor dispute is far from inevitable, there are signs that the dispute could escalate and prompt a lengthy negotiation between the players and owners. It remains to be seen how this will all play out, but the signs certainly point toward a potential work stoppage in 2027.