The Last League Without a Ceiling
Baseball's salary cap fight isn't just about money. It's about whether the sport learned anything the last time it went to war with itself.
The Day Baseball Stopped
On the morning of August 12, 1994, major league baseball players walked off the field and didn’t come back for 232 days. By the time they did, the World Series had been canceled for the first time since 1904, a billion dollars had evaporated, and millions of fans had decided they were done caring about a sport that clearly didn’t care about them.
Now baseball is heading back to the bargaining table, and the same argument that started the fire in 1994 is sitting there waiting for them.
The current collective bargaining agreement expires December 1, 2026. MLB owners have put a proposal on the table: a hard salary cap of $245.3 million, a hard floor of $171.2 million, and a 50/50 revenue split modeled after the NFL and NBA. The players’ union has rejected it outright, offering instead a softer system built around what they’re calling a “competitive integrity tax.” The two sides aren’t negotiating over numbers inside the same framework. They’re negotiating over whether the framework itself should exist, and the 2027 season is the thing sitting between them and a deal.
Here’s what tends to get lost about 1994: the owners wanted a salary cap then too. The players said no, the whole enterprise collapsed, and the strike didn’t end through negotiation. It ended because a federal judge named Sonia Sotomayor granted an injunction blocking the owners from imposing their new labor rules unilaterally. Sotomayor stopped them cold, restoring the previous collective bargaining terms. The players won that round. The sport still lost.
Rob Manfred, who was a junior lawyer on the owners’ bargaining team in 1994, is now the commissioner of baseball. Last week he said something remarkable in public: “We have tried mightily over several rounds of bargaining to use a competitive balance tax to address competitive concerns. And sometimes you’ve got to admit you failed.” The commissioner of baseball, on the record, conceding that the current system has not worked. That’s where things stand.
What Fans Actually Want
Most baseball fans are reasonable people. They understand that bad decisions in the front office lead to bad teams, and that injuries derail good ones. What frustrates them is something more specific: the sense that certain franchises lose not because they made poor decisions, but because the structure of the sport made winning nearly impossible before spring training even started. Fans aren’t asking for guaranteed parity. They’re asking for a legitimate chance.
Competitive balance is really three different things. Championship diversity measures how many different teams win titles. By this measure, baseball looks surprisingly healthy — thirteen different franchises won the World Series between 2006 and 2025, more than the NFL’s ten or the NBA’s eight. But MLB’s own proposal put a sharper point on the deeper problem: over the past decade, nearly 80 percent of League Championship Series teams, 85 percent of World Series teams, and 90 percent of champions have come from top-15 markets. Since 2012, only one team from a bottom-15 market has won the World Series. That was the 2015 Royals.
Postseason participation tells a similar story. The Yankees, Dodgers, Braves, Astros, and Red Sox have been fixtures, all large-market franchises. The Cardinals are the notable exception: a mid-sized city, a brilliantly run organization, and one of the most devoted fanbases in baseball. They’re a genuine example of smart management overcoming market size, but they’re the exception. The Pirates haven’t been relevant in October in decades.
The third measure is preseason contention, how many teams enter a season with a legitimate shot at the postseason. Betting markets price in payroll and roster quality before a pitch is thrown, and by that measure the gap between teams that can and teams that can’t is real and persistent. The Royals winning in 2015 doesn’t change that. Green Bay has been in playoff contention almost every year for three decades under a hard cap, competing with New York and Los Angeles from a city of 100,000 people. If Green Bay had an MLB team playing by baseball’s current rules, it wouldn’t have a prayer.
That’s the difference fans are pointing at.
The Dodgers Problem
No team has exposed the limits of baseball’s current system more dramatically than the Los Angeles Dodgers. The revealing issue isn’t just how much they spend. It’s what that spending buys that no other team can replicate.
In 2024, the Dodgers lost what amounted to two full rotations worth of starting pitchers to injury. Most teams would have collapsed. The Dodgers won the World Series anyway. Their injured list at points during the season would have been a competitive rotation for half the teams in baseball. That’s not talent. That’s depth at a level most franchises can’t afford.
The architect of that roster is Andrew Friedman, who spent nine years building the Tampa Bay Rays into one of the most respected organizations in baseball before joining Los Angeles in 2014. The description that followed him was simple: the Rays with money. Friedman took the same philosophy to a city with vastly different resources, and built something Tampa could never sustain. The Rays currently sit at 48-33, first in the AL East. The Dodgers are 54-30. Both organizations are exceptionally well run. The difference showed up in October 2024, when the Dodgers activated the players they’d had sitting on the injured list all summer.
Then there’s the contract structure. Shohei Ohtani’s 10-year, $700 million deal defers $680 million until after his playing years end, meaning the Dodgers’ luxury tax hit runs roughly $44 million per year rather than $70 million. Most fans know Bobby Bonilla Day, the running joke about the Mets sending Bonilla $1.19 million every July 1st as part of an old deferred arrangement. Ohtani Day will be something else: starting in 2034, the Dodgers owe him $68 million per year for a decade. Other ownership groups either can’t afford to replicate that structure or won’t, out of basic financial responsibility. Either way it’s a tool that exists only for the wealthiest franchises.
The owners know it. In their latest proposal, MLB called for eliminating deferred contracts entirely for any deal signed after the new CBA takes effect. The very structure that helped build the Dodgers’ dynasty would be prohibited under the system the owners are now asking everyone to accept.
What a Cap Would and Wouldn’t Fix
A hard salary cap does not automatically produce competitive balance. A study published in the Journal for Economic Educators found no evidence that caps improved competitive balance in major American professional leagues. The NFL is the counterexample most people reach for, but the NFL’s parity isn’t just the cap. It’s the cap combined with aggressive revenue sharing, mostly non-guaranteed contracts, and a single-elimination playoff format. The cap alone didn’t build parity in football. The whole system did.
Baseball’s current luxury tax has the same weakness as the union’s proposed integrity tax: wealthy owners treat the penalty as a cost of doing business. A hard cap would compress the payroll gap and force the twelve teams currently below the proposed floor to spend significantly more. Written tightly, it could close the deferred salary loophole too. But it wouldn’t fix drafting, player development, or ownership groups that have treated losing as a profit center.
Even a perfectly designed cap runs into a newer problem: defining what counts as revenue in the first place. The Atlanta Braves built The Battery, a mixed-use entertainment district next to their ballpark with restaurants, offices, and apartments, and that revenue sits entirely outside MLB’s revenue sharing system. It is not baseball income by any formal definition, even though it exists because a baseball stadium sits at the center of it. The Braves’ baseball operations generated roughly $272 million in the first half of last year. The entertainment district added another $28 million on top of that, money no other team gets a share of and money that would likely sit outside a salary cap calculation too. The Cubs have done something similar with Wrigleyville. The Royals have pledged a billion dollars toward a district around their planned new ballpark. If owners agree to a hard cap built around traditional baseball revenue, the next fight is obvious. Smart franchises will simply build more of their business outside the lines the cap draws.
The owners have a legitimate point: a well-designed hard cap removes the most egregious advantages that currently exist. The union has a legitimate point too: the cap alone won’t fix what’s broken. Both can be true.
Why 1994 Still Matters
Negotiations are actively underway. Both sides have exchanged formal proposals and the gap is wide. The owners have offered some concessions, including earlier free agency for veterans and elimination of the qualifying offer system, but every concession is tied to accepting the hard cap. The union calls it a package deal with no room to negotiate the parts separately.
The environment is more complicated than it was in 2021. MLBPA executive director Tony Clark resigned in February following an internal investigation and a separate federal inquiry into the union’s finances. Bruce Meyer, the union’s lead negotiator on the 2022 CBA, stepped in as interim director. He now leads the union into the most consequential labor fight in baseball since 1994, less than four months after taking the job.
That’s not 1994. Not yet. But the 1994 strike is the ghost in every serious negotiation, because it showed what happens when one side decides it can impose its will without a deal. The owners tried that in 1995. A federal judge stopped them. The lesson hasn’t been forgotten.
Baseball has produced more World Series champions than the NFL over the past twenty years. It also has more fans who feel like their city’s team doesn’t have a real shot before the season starts. Both things are true, and the gap between them is the whole argument. The fans in Pittsburgh and Kansas City are just hoping someone figures it out.
The Deeper Dive
The most revealing detail in the current MLB proposal isn’t the cap number. It’s the revenue sharing component.
Owners are asking for a 50/50 split of baseball-related income, modeled on how the NFL and NBA divide money between the players and the clubs. The cap is essentially a mechanism for enforcing that split: once you’ve agreed on 50/50, the cap number follows mathematically from total revenue.
The players’ union understands this, which is part of why they’ve rejected a hard cap so firmly. Accepting one doesn’t just mean accepting a spending ceiling. It means accepting a fundamental restructuring of how baseball’s money gets divided, on terms the owners are setting. The union has called the owners’ latest proposals “flat out bad for baseball,” words that make clear this is viewed as an existential fight, not a position to be bargained away.
The owners’ June 25th proposal included genuine concessions: earlier free agency for veterans 30 and older, elimination of the qualifying offer system, and a higher minimum salary. But every concession is conditional on the union accepting a hard cap. That’s a package deal: take the whole thing or none of it.
There’s also a generational dimension worth noting. Under the current system, younger players are significantly underpaid relative to their value. The 2022 CBA introduced the Prospect Promotion Incentive, a draft pick reward for teams that bring top prospects up on Opening Day, provided the player goes on to win Rookie of the Year or finish in the top three of MVP or Cy Young voting. It’s a real incentive, but a narrow one. It helps at the very top of the prospect pool. The broader class of good-but-not-elite young players can still be held back for service time reasons with little penalty. The union’s push for better pay for younger players is the part of this negotiation that gets the least public attention and may matter the most long term.
For the Curious
“The 1994-95 Baseball Strike” — Baseball Almanac (baseball-almanac.com)
Baseball Almanac has compiled contemporaneous accounts and retrospective pieces on the 1994 strike worth spending time with if this issue got you thinking. The raw numbers, 948 games canceled, the first World Series cancellation in 90 years, attendance that didn’t recover for years, are one thing. The fan accounts are another. The strike happened at a moment when baseball was experiencing a genuine renaissance, and the damage it did to that goodwill is worth understanding before the sport risks repeating it.
A caveat: Some of the historical pieces touch on the steroid era that followed, which intersects with the strike’s aftermath in complicated ways. Worth knowing going in.
Worth Watching
Keep an eye on how the Dodgers’ roster construction evolves as the trade deadline approaches. No team in baseball illustrates the current system’s contradictions more clearly, and whatever they do next will tell you something about whether the owners’ cap proposal is really about competitive balance, or about limiting what one franchise in particular has been able to build.
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Written by Bob Sloop