Latest MLB Proposal To Players Pushes Salary Cap Out To 2028

With less than a month to go before the labor agreement between Major League Baseball and its players is set to expire, the league offered up a new proposal on Tuesday that sees their push for a salary cap pushed out to 2028 to allow clubs at the bottom of the player payroll spectrum additional time to transition to the proposed salary floor.

The league's transition proposal to the MLB Players Association delays salary cap and floor implementation to 2028 for a smoother transition, with a projected cap of $180.2 million and a floor of $150 million. Other key reforms proposed include raising minimum salaries, reducing roster churn, eliminating draft pick compensation, and expanding free-agent access. The plan aims to balance team competitiveness, player benefits, and market stability.

The cap and floor figures include player salaries and benefits. Signing bonuses to amateur players are excluded.

In the latest salary cap proposal, the current Competitive Balance Tax (CBT) – or as it is more commonly known as the Luxury Tax system in place – would be extended by a year. The proposal does not adjust the thresholds or penalties. The base threshold for the 2026 season was $244 million. The base tax rates and surcharges in the final year of the current labor agreement would also retain the status quo. That alone would be something the MLBPA would oppose, given that they have proposed increasing the upper threshold to $300 million as part of the next labor deal.

In a fact sheet released by the league, the issue of the proceeds from extending the CBT for an additional year was addressed by saying, "MLB would agree to allocate the players' share of 2026 CBT proceeds (normally used to fund contributions to players' 401(k) accounts in future seasons) to players as a bonus based on service accrued in 2026 ($285,000 to each player that received a full year of service, $213,400 to any player with three quarters of a year of service, $142,300 to any player with half a year of service, and $71,100 for any player with a quarter year of service)."

Additionally, the league offered up several ways the minimum salary for the league's players as part of the proposal.

MLB will increase the minimum salary from $780,000 in 2026 to $1,000,000 in 2027 for players with at least two years of service and $900,000 for players with less than 2 years of service.

Players with less than 2 years of service will also earn at least $100,000 under the Pre-Arbitration Bonus Program, bringing their total compensation to at least $1,000,000, if they receive a full year of service (and spend less than half the season on the IL).

The increase of the minimum salary to $1,000,000 would be the largest year-over year increase in the minimum salary in Baseball history (and is about $100,000 higher than the previous largest increase).

In future years, the minimum salary will increase with growth in the Cap and Floor.

"We recognize that clubs will need a full offseason to prepare to operate within the cap and floor system," said MLB spokesman Glen Caplin. "Therefore, with this offseason already underway, we proposed today to begin the cap and floor system in 2028. This proposal would allow a smoother transition into the cap and floor system without delaying key player benefits, including earlier free agency, a $1 million minimum salary, a 30% increase to the pre-arbitration bonus pool, and transactional reform that will reduce roster churn. The projected salary cap and floor for 2028 continues to provide more money for major league players while leveling the playing field and giving more teams the ability to participate in the free agent market and retain their homegrown stars so that every fan believes their team has a fair chance to win it all."

Multiple changes have been offered up by the league, such as offering up revenue sharing of all local media rights as a way to increase economic parity, but have only done so by attaching the changes to the implementation of a salary cap. With today's proposal, the league opened the door to saying that negotiating a phase-in timeline and procedures for implementation of the salary cap and floor was on the table.

The MLBPA immediately pushed back on the proposal.

"Coming off another incredible season of baseball, MLB owners continue proposing blowing up the current system and replacing it with one designed to line their pockets and increase their franchise values."

While the Luxury Tax payrolls for 2026 have not yet been released, in MLB's latest proposal, they highlight how the cap system would affect two-thirds of the league's CBT payrolls.

Based on the 2026 CBT payrolls, the following clubs would be required to increase those payrolls that include benefits to reach the proposed $180.2 million floor. While the figures are not revealed, the league indicates that those increases would total $636 million across 12 clubs:

It should be noted that of the 12 listed, four reached the 2026 MLB postseason, including the World Series Champion Milwaukee Brewers and the ALCS-winning Tampa Bay Rays.

Based on the 2026 CBT payrolls, the following eight clubs would need to lower their CBT payrolls by a combined $528 million.

Of these eight, four made the postseason, with the Dodgers reaching the NLCS before the Brewers swept them.

While MLB has tweaked their latest proposal to push out the cap and floor, other proposed changes would go into place even if the economics of the current Luxury Tax were pushed out an additional year. Many of the proposed changes today accept parts of proposals by the MLBPA, but again, only if the union for the players accept the cap system, something that is seen as a poison pill by the MLBPA.

MLB will accept the MLBPA's May 27 proposal to reduce the period of reserve to 5 years for 30-year-old players (subject to the Club's right to sign the player to a one year contract with a salary equal to the average salary of the 125 highest-paid players), decreasing the reserve period below 6 years for the first time since it was introduced in 1976. o 48% of 5 MLS players would have reached free agency a year earlier under this provision during the past CBA.

MLB will accept the MLBPA's May 27 proposal to eliminate the Qualifying Offer system (i.e., signing a free agent will no longer require a team to forfeit draft picks). Increases to Minimum Salaries

MLB's Proposal To Increase The Minimum Salary

The league claims that with the players accepting a cap system the increase of the minimum salary to $1,000,000 would be the largest year-over year increase in the minimum salary in Baseball history (and is about $100,000 higher than the previous largest increase).

Proposal To Increase the Pre-Arbitration Bonus Program

MLB will increase the Pre-Arbitration Bonus Pool by 30% from $50 million in 2026 to $65 million in 2027 and grow the Pool to $75 million over the term of the CBA.

Proposal on Accrual of Major League Service / Prospect Promotion Incentive (PPI) Selections

MLB will add PPI Selections in the International Draft and allow eligible prospects to earn their Club up to two selections in their career (one Domestic and one International), further incentivizing Clubs to add top prospects to the Opening Day roster.

MLB will accept the MLBPA's proposal to exclude Foreign Professionals when determining whether an eligible prospect will receive a full year of service for finishing first or second in the Rookie of the Year voting (provided the eligible prospect otherwise finishes in the top 3 in the Rookie of the Year voting).

Proposed Changes to Make it More Difficult to Send Players to the Minor Leagues/Reduce Roster Churn

Reduce number of times a player can be optioned in a season from 5 to 4. • Eliminate the 4th option.

Prohibit Clubs from optioning or outrighting a player during the playing week by implementing weekly rosters.

Restrictions on Club's ability to cycle a player on and off the 40-man and Active rosters throughout the season for strategic reasons.

Proposed Changes Intended to Result in Quicker Promotions to the 40-Man Roster

Require that Clubs add players to the 40-man Roster a year earlier to prevent them from being eligible for the Rule 5 Draft.

Incentivize Clubs to add players to the 40-man Roster by allowing the claiming Club in the Rule 5 Draft to option the player to the minor leagues

The league noted with the latest proposal that all other elements of MLB's original economic proposals, including the "Cornerstone Player" rules, would go into effect immediately.

The current labor agreement between MLB and the players expires at 11:59 pm E.T. on December 1st. At midnight it is expected that the league will impose a lockout of the players, freezing free agency, trades, and communications with individual players and agents. Spring Training for the 2027 season is officially scheduled to begin on Friday, February 19, 2027. The first day of the 2027 regular season is scheduled for Opening Night on March 24, 2027.