Major League Baseball is at a crossroads as the expiration of its labor deal looms two years away. The most significant question now is whether commissioner Rob Manfred and the owners are gearing up for the biggest fight for a salary cap in over 30 years. This offseason lockout seems highly likely in 2026, but the real concern is whether it will cost regular-season games. History suggests that if owners push for a cap aggressively, the fallout could be ugly.

Unraveling the Future of MLB's Salary Cap

Expiration of the Labor Deal and the Crucial Year Ahead

The expiration of the sport's labor deal is still two years away, entering December 2, 2026. This next year is crucial as both owners and players will formulate their negotiation plans. An offseason lockout is highly probable, yet industry officials view it as a formality. They are more concerned about whether this lockout will lead to the loss of regular-season games.Baseball's Winter Meetings last week saw negotiations on Juan Soto's record-breaking deal. Player agent Scott Boras was asked if calls for a cap would arrive again, and he responded that it happens every five years. Owners are indeed considering a cap proposal, and for several reasons, they could be more motivated than in generations past.

The Future of Local Television Rights and Its Impact

The future of local television rights is a key motivation for owners. Baseball owners have always wanted a cap for potential cost savings and to align with other major U.S. sports leagues. The NBA, NFL, and NHL all have caps and floors. Smaller-market teams and their fans have long complained about the exploits of bigger-market teams, and this offseason provides plenty of fodder. For example, the World Series champion Los Angeles Dodgers have a high projected payroll and have deferred significant salary.Shortly after the last CBA negotiations, Manfred created an "economic reform committee" to review local television and club revenue disparities. By the end of 2025, about two-thirds of the league will have taken a pay cut in rights fees. Manfred wants to change how teams share revenues by pooling local TV money and reducing or eliminating other shared streams. A cap could be a unifier among owners, even if they don't like the other changes.

The Owners' Perspective on the Salary Cap

For owners, a cap has always been an end in itself. They have long sought an upper limit on player spending, while players only want a minimum or floor. The two sides have never achieved one without the other. The economic reform committee, consisting of Mark Attanasio, John Henry, Chris Ilitch, Terry McGuirk, Dick Monfort, and Mark Walter, is dedicated to these issues.In the 2021-22 negotiations, Monfort chaired Manfred's labor committee during the offseason lockout. Attanasio and Henry also served on it. The lockout froze the winter, halting free agency and trades. The league made a cap-like proposal early in talks but moved on when players balked. Manfred views offseason lockouts as the norm in professional sports.

The Players' View on the Salary Cap

Collectively, players have always regarded a cap as a third-rail issue. They believe it would produce many negatives over time, including a reduction in overall earnings. The 1994-95 strike, which lasted 232 days and led to a canceled World Series, centered around a cap fight. The full impacts of a cap and floor would be intricate and massive, with the league and players agreeing to share a set percentage of revenue annually.Competition is another major talking point. The league believes a cap would help parity, giving smaller-market teams a better chance to retain and sign the best players. Players, however, feel a less restricted system is better.

The Influence of New Owners and the Future of Labor

It's unclear how new owners like Steve Cohen and David Rubenstein will influence labor. Some may be eager to push change, believing they can succeed where their predecessors failed. Clark's leadership was challenged early this year by a group of players. Owners may see the union as weaker, but a cap proposal could galvanize players.At least a small segment of players and agents may be curious about the cap and want to learn more. There is no evidence of a groundswell of support among players for a cap. Manfred's legacy will be affected by the path he and the owners choose, as this is his last CBA before planned retirement in 2029.MLB took in approximately $11.6 billion in 2023, and the introduction of the pitch clock has increased attendance and interest. However, missed games could tarnish the league's leverage in future TV negotiations.