MLB Proposes $258.2 Million Salary Cap Starting in 2028

Major League Baseball owners proposed on Tuesday that the league adopt a hard salary cap of $258.2 million beginning in the 2028 season. The proposal includes a corresponding salary floor of $180.2 million, which would allow teams to operate at 90 percent of that minimum for the first year before requiring them to spend the full amount over a three-year period. The owners stated that clubs have too many financial commitments for the upcoming season to reduce spending immediately.

The suggestion came one day after free agent negotiations began for the 2026-27 offseason. Under the plan, the cap and floor figures are calculated using luxury tax payrolls with average annual values. MLB spokesman Glen Caplin noted in a statement that the delay allows for a smoother transition into the new system. He said the proposal preserves key player benefits, including earlier free agency and a $1 million minimum salary.

Management’s proposal is tied to a 50-50 split of revenue with the players. The current five-year labor contract expires on Dec. 1, and a lockout is expected if the sides fail to reach a new agreement. This is the first time MLB has proposed a salary cap since the 1994 strike, which canceled the World Series for the first time in 90 years.

The players’ association rejected the concept in a statement, describing the proposal as a move to line owner pockets and increase franchise values. The union said it has never accepted a cap and remains ready to negotiate in good faith. It argued that the plan replaces market-based fundamentals with a zero-sum system that harms middle-class players.

Management calculated that eight teams would need to reduce their current payroll by a combined $528 million to comply with the 2028 cap. Those teams are Boston, the Chicago Cubs, the Los Angeles Dodgers, the New York Mets, the New York Yankees, Philadelphia, San Diego, and Toronto. Conversely, 12 teams would need to increase spending by $636 million to reach the floor. That group includes the Athletics, the Chicago White Sox, Cincinnati, Cleveland, Colorado, Miami, Milwaukee, Minnesota, Pittsburgh, St. Louis, Tampa Bay, and Washington.

The proposal also outlines changes to player compensation and contract structures. The minimum salary would rise to $1 million for players with two years of service and $900,000 for others. The pre-arbitration bonus pool would increase from $50 million in 2026 to $65 million in 2027. Owners also agreed to reduce service time for free-agent eligibility from six seasons to five for players aged 30 and older, provided the team retains the right to make a qualifying offer.

MLB indicated it is willing to discuss phase-in timelines and procedures. The league plans to keep the current luxury tax system and revenue-sharing plan for 2027, then centralize media revenue for 2028. A one-time bonus payment would be distributed to players based on 2026 service time, with major leaguers playing at least 172 games receiving $285,000.