Yesterday, I dashed off a post about the bummer news regarding Harrison Bader’s status that had been reported out of the GM Meetings currently being held in Las Vegas. In it, I made mention of the owners’ latest proposal for a salary floor and cap, but I got a crucial figure wrong. After going back and looking at the offer more closely, it would appear that the sport has used the Giants as an example for just how competitive they want the most competitive team(s) in the sport to be. Another reason
to be against the owners in this labor dispute.
In their first proposal way back in May, owners pitched a floor of $171.2 million and a cap of $245.3 million, with the Competitive Balance Tax (CBT) figure being the basis. In other words, the cap number would be based on the average annual value of contracts — but not only the AAV.
As with the current CBT calculation, the team’s contribution to the league’s health care plan for players is a part of the bottom line as is the mandatory contribution to the league’s pre-arbitration bonus pool that was negotiated into the most recent CBA. There’s not an exact publicly available figure for the health care contribution, but for 2026, it was an estimated $18 million per team. The mandatory pre-arb contribution is an annual fixed cost over the course of the CBA: $1.667 million.
But the proposal also folds in two line items not currently factored into the CBT figure: amateur bonus pools. A team’s amateur draft figure and its international bonus pool would also become part of the salary cap math. Those figures can fluctuate year to year just based on free agent signings, trades, etc. What does this have to do with the Giants?
By a stroke of luck, the Giants were awarded the fourth pick in the most recent MLB draft. They also traded away Patrick Bailey for Cleveland’s Competitive Balance pick. That increased their 2026 amateur draft bonus pool to $17.35 million. Their international draft figure was $5.44 million. That’s $22.79 million combined.
Using Cot’s MLB Contracts, here i’s how the Giants’ would’ve looked under the May salary cap proposal in 2026:
MLB roster (AAV): $204.53 million
Amateur bonus pools (combined): $22.79 million
Health care contribution: $18 million
Pre-arbitration bonus pool: $1.67 million
… Total: $246.99 million
That’s, what, $10,000 under the first proposed salary cap?
Now, obviously, this proposal made in May wasn’t conjured up in May, and the Giants’ Opening Day payroll by the CBT calculation was $227.9 million (per Cot’s) and didn’t factor in the trades they made during the season or the heaps of players added to the 40-man roster due to injuries.
On the other hand, the Giants have typically run their baseball operation for about $250 million. If every team is being valued at minimum in the $3.9-$4 billion range, then we’re looking at the actual labor expenses being less than 10% of the value of the business — indeed, roughly 6.25%. Obviously, marketing and taxes and expendables are meaningful costs you can tack on and not every team’s revenues are the same (and this is, obviously, the most important figure to compare against a baseball ops budget), but you can see why the vast majority of owners want a cap so badly. Once they can set the ceiling, they can keep shoving it down and down and down as their valuations increase.
And, as the San Francisco Giants have demonstrated over the past decade, spending to the proposed salary cap doesn’t guarantee anything. The loser Pittsburgh Pirates fans who have been a part of the online vanguard for a cap and the Jim Bowdens of the world demand fairness in an unfair game. Even if every team got a fair chance to win the World Series, that’s still once every 30 years.
Now, I said the Giants are the model, but I used the May proposal as my example because of how exactly it matched up with this most recent Giants team. But last week,the league made a new offer, and in it, the pre-arbitration bonus pool increased 30% (let’s call it $2.2 million mandatory team contribution), the minimum salary went to $1 million (currently $780,000), the floor rose to $180.2 million and the cap up to $258.2 million. The league also offered a 154-game schedule with an expanded playoff format (another path for deflating player salaries, natch).
Here’s how the latest proposal still uses the Giants as a model.
The most money the San Francisco Giants have ever spent to field their major league team was in 2024, when they spent $210.9 million in real money against a CBT figure of $251.94 million. Before comparing it against this latest proposal, here’s how those figures total out.
MLB roster (AAV): $233.27 million
Amateur bonus pools (combined): $13.87 million
Health care contribution: $17 million
Pre-arbitration bonus pool: $1.67 million
… Total: $265.81 million
Now, you look at that and probably think, “Hey Bryan, you dumb idiot, $265.81 million is more than the latest proposal!“ and that’s true! What’s also true is that the owners are making proposals in bad faith. The PLANNED lockout is all the evidence one needs of this. The staggering increase in franchise valuations and league revenues evidence that an uncapped system is working great and that the more success the players have the more success teams have. And it’s knowing that they’re making bad faith proposals that makes it easy for me to both cast aspersions and jump to some conclusions.
Rather than focus on the $265.81 million for this latest proposal, I’m instead going to focus on that $233.27 million figure. Adjust that for inflation (using this future inflation predictor calculator) and that’s $256.48 million in 2028 dollars (again, projected). I’m doing this because I think this is the key figure most of the owners want to hone in on year to year. The amateur bonus pools are probably estimated to be fixed around $15 million for each team (on average) and the health care plan contribution seems to be very stable year to year, too, and in 2028 will probably be $20 million, plus then $2.67 million for the proposed bonus pool. That’s around $37-$40 million in fixed(ish) costs annually. Approaching what the Giants paid Blake Snell in 2024, a deal they came to regret almost immediately. Adjusted for inflation, Snell’s $32 million is $34 million today. But… you know what? If you add in the extra $10 million in manager-related costs for this most recent season (BoMel’s paid option + the buyout on Vitello’s Tennessee contract + Vitello’s actual contract), the 2026 Giants get within $700,000 of the latest cap proposal, too.
It’s enough to wonder if Greg Johnson and Larry Baer are consulting on these proposals. Don’t think the league won’t considered imposing a salary cap on front offices in the future. Coaches, scouts, executives, etc. are presently uncapped, and if the player costs become artificially constrained than why not the brain geniuses, too?
But for those fans of bad teams that have programmed you over the years to hate baseball and loathe success, just know that the Giants are not a model of how any firm or any human being should be. Sure, they won three championships in five years, have a lengthy history of world historic sports figures and a degree of unparalleled success in the history of the sport — but the past decade has been nothing but failure, coasting on past wins, going 75% of the way in rather than “all in,” and been largely uninspiring if not outright hopeless.
Over the past decade, the Giants have spent $1.94 billion on their 40-man roster. That outlay has come back as an 823-857 record, four managers, four playoff wins, three top baseball executives, two winnings seasons, and one ticked off fanbase. Oh, and ownership was able to buy another chunk of San Francisco to develop for their real estate portfolio. Indeed, a salary cap wouldn’t really do anything. Don’t believe me?
Here.
Using Cot’s MLB Contracts, I’ve combined all of the payroll data for the 30 teams from 2016-2026 and ranked them. I’ve also included their win-loss ranking and in the last four columns I indicate whether or not the team has (1) appeared in the playoffs (2) won a playoff game (3) appeared in the World Series (4) won the World Series.
The Pirates and Angels are the only teams to not appear in the postseason since 2016. Pittsburgh last appeared in the 2015 NL Wild Card and the Angels were last in the 2014 ALDS.
Yes, it’s true that the Dodgers (1st) and Astros (9th) have won five World Series in this 11-season stretch. The Red Sox (5th) and Cubs (6th) are the other top 10 payroll teams to win it. Milwaukee (25th), Texas (11th), Atlanta (12th) and Washington (15th) round out the list. Although inflation and the pandemic-shortened season of 2020 skew this a bit, you’re still talking about the top 12 teams (combined .528 win%) averaging around $172.5 million in payroll compared to the bottom 18 teams (combined .482 win%): $64.75 million. That’s a 2.66:1 disparity; or, about the upper bound of the K:BB ratio Farhan Zaidi looked at when projecting an MLB hitter. The latest floor-cap proposal lowers that to 1.43:1, a 46% decrease. That 11-year average for the top 12 teams has a projected inflation value of $180.5 million, or just $300,000 more than the latest floor proposal.
But, plainly, the top 12 teams have outspent the remaining 18 teams by about 18% over the past 11 years. Is that a large enough percentage to tank the 2027 season?
To bring it back to the idea that the Giants are the model for the cap proposals: the team’s average payroll since 2016 is $176.1 million. That average has a future projected inflation value for 2028 (when the latest cap proposal would phase in) of $184.29 million. Add in the $20 million in projected player healthcare benefits, average out the amateur bonus pools as $15 million, and call the pre-arb bonus pool contribution $3 million and that gives us a total of $222.29 million — or, 86% of the league’s latest cap proposal. For the past 11 years combined, the Giants’ have been at 92% of the total luxury tax threshold. That 6% gap is easily closed by future projected inflation for the 2028 phase-in.
Anyway, for fans who want the salary cap, just know that the San Francisco Giants might very well be the platonic ideal of an MLB team operating in a capped system. There are few nightmares worse than that.
