MLB Proposes Payroll Cap, Deepening Labor Rift for 2027 Season

2026-05-30

Players Union Rejects Salary Cap Proposal

Major League Baseball has proposed a salary cap that would limit each club's payroll, raising the prospect of a strike in the 2027 season, the first in 32 years. The contract structure of Shohei Ohtani of the Dodgers could also become part of the debate.

The current collective bargaining agreement expires on Dec. 1. Ahead of negotiations for a new deal, the MLB Players Association on May 27 proposed raising the minimum salary to $1.5 million (about 240 million yen, compared with the current $780,000). MLB countered on the 28th with a new system setting each club's payroll at $245.3 million and the floor at $171.2 million.

The players union has strongly objected. Acting executive director Bruce Meyer criticized billionaire club owners, saying they are trying to suppress only player salaries while placing no cap on their own profits or asset values.

Soaring Payrolls and Calls for Reform

The Padres, who also have Japanese players on the roster, announced in May that they would sell the club for $3.9 billion to an investor group led by a billionaire. That would top the Mets' $2.4 billion sale in 2020 and set a record for a club sale. The market value of major league teams and their businesses continues to rise.

MLB is the only one of the four major U.S. sports leagues that does not have a salary cap. The NFL and the NHL use hard-cap systems that allow no exceptions.

If MLB introduces a salary cap, eight clubs including the Mets, who ranked first in opening-day payroll, and the Dodgers, who were second, would be forced to make major cuts. By contrast, 12 clubs including the Athletics that have not reached the floor would need to increase spending.

In a statement, MLB spokesman Glen Caplin said the current gap of as much as $446 million between the top and bottom is not fair competition and called on the players union to understand MLB's position.

Potential Impact on Ohtani's Contract

The impact of soaring salaries also extends to Japanese players. Ohtani's 10-year, $700 million contract stirred controversy because more than 90% of the money is deferred. It has functioned in part as a way to curb luxury tax payments, and some owners may call for limits on such contract structures.

MLB's proposal of a salary cap is its first since 1994, when it led to a strike that lasted seven and a half months into the following year. If negotiations are not completed by December, the league is likely to move to a lockout, in which clubs shut players out. If no deal is reached by the start of the 2027 season, a strike could begin.

A poll by U.S. media found that 68% of fans supported introducing a system with both an upper and lower limit on payroll. Fans of small-market teams welcome the idea, saying it would help balance team strength and restrain spending on reinforcements, while fans of big-city clubs remain strongly dissatisfied.

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