The 2026 season may not have been great for fans of the Toronto Blue Jays, but for baseball in general, it was a stellar year. While the books aren’t entirely opaque, direct revenue raised by the MLB is estimated at over $13B for the season, the highest ever, and continuing a steady trend line since the COVID shortened 2020 season of about 4-7% growth year over year. Three teams changed ownership this year – Tampa Bay, San Diego, and Los Angeles – selling for $1.7B, $3.9B, and $4B respectively, despite
all three facing challenges ranging from the need for a new stadium, a small media market, and a complete overhaul after decades of irrelevance. And yet, despite all of this success, owners are expected to lock out the players on the final minute of December 1st, 2026.
Why would a business that is experiencing runaway success risk everything with the potential loss of games and revenue in 2027? How will the players respond? How certain are we that we’re going to see one side or the other fold and what is at sake for the future? This series will hopefully shed some light on what is often a confusing and opaque process before events start to unfold in real time. Or explain things you already know but give you a dedicated comment section to rail against the players/owners/system/TheMan.
The Collective Bargaining Agreement
This whole process revolves around the Collective Bargaining Agreement (CBA) between the MLB and the MLBPA. The CBA remains in force for five years and must be renegotiated after that time. The current CBA expires on Tuesday, December 1st at 11:59PM which is why the expectation of when the lockout will begin is so precise. The CBA is a wide-ranging agreement which covers extremely consequential things like arbitration, free agency requirements, roster size as well as significantly less important elements like a mandatory chef in each clubhouse. Negotiations for the owners are headed by the MLB Deputy Commissioner Dan Halem and his team and the players are represented by MLBPA Executive Director Bruce Meyer and his team. Halem and MLB Commissioner Rob Manfred communicates with the 30 MLB owners and their specific representatives, and Meyer meets with the Executive Subcommittee and the 30 Team Player Representatives. In order to reach a decision, the owners need a 75% majority of votes, so 23 out of 30 owners. The players in theory only need a straight majority out of the 38 votes from the Executive Subcommittee and the Team Player Representatives. For example, in the last CBA negotiations in 2022, the 8 man Executive Subcommittee voted unanimously to reject the owners offer but lost the full vote by the Representatives 26-12.
Lockout Versus Strike
The terms are often used interchangeably and are both forms of work stoppages but there is a significant difference between the two. Strikes are player led work stoppages during which the players withhold their services. The last MLBPA led strike took place in 1994, specifically to block the implementation of a salary cap, which cancelled the rest of the season and post season and lasted until April 2, 1995. Lockouts are initiated by the owners, which means all player related activities and communications are halted, including trades, signings, training and access to team facilities until the lockout is lifted. The reasoning behind a lockout is that having hard deadlines provides teams leverage in the negotiations, as players will be pressured by not having contracts, job security or access for training and rehab resources to accept a contract more favourable to the owners.
What Do They Want?
Both sides have been preparing for a potential lockout for the last several years. A series of proposals have gone back and forth between the MLB and the MLBPA, mostly for the sake of media coverage and positioning, as each group looks to bring the public on their side. While the details can shift rapidly, each has outlined a broad agenda of their priorities.
MLB Owners
Key elements include:
Salary Cap and Floor: Tied as a baseline requirement to all league proposals, MLB has proposed a hard salary cap of roughly $258.2 million and a salary floor of $180.2 million, paired with a 50/50 revenue split between owners and players to be implemented in 2028.
Shorter Regular Season and Expended Playoffs: Reducing the regular season from 162 to 154 games starting in 2029 to provide a standard weekly off-day and a dedicated Monday broadcast window. Extending the Division Series to best-of-seven and allowing higher-seeded teams to pick their opponents.
Roster & Offseason Changes: Weekly roster-setting windows, a 14-pitcher limit, Rule 5 draft adjustments, a reduced draft of 12 rounds excluding high school players, an international draft and an offseason transaction calendar featuring a winter quiet/frozen period.
Free Agency and Wages: Increasing the minimum salary to $1M and decreasing the service time requirements from 6 to 5 years before qualifying for free agency.
The key for the owners is that they are willing to offer all kinds of incentives for the players; things that are good for them like a year less of team control, having a day off every week built into the calendar, making it more likely good teams have deeper playoff runs, and increasing their potential post season earnings. However, the two red lights for the players are the glaring blaring siren of a salary cap, and the reduction in the draft allowing them to further shrink their farm systems without losing competitive balance with other teams.
MLBPA
Key elements include:
Tax on Low-Spending Teams: A “competitive-integrity tax” targeting low-spending clubs (mirroring the luxury tax for high spenders).
Higher Thresholds & Salaries: Raising the base Competitive Balance Tax (CBT) threshold to $300 million (up from $244 million), near-doubling player minimum salaries, and increasing local television revenue sharing. Also Expanding active rosters from 26 to 28 players for the first 15 days of the season.
Reduced Service Time: allowing players over thirty to reach FA after 5 years.
The key for the players is challenging the disparity in team payrolls in a way that doesn’t limit player earning potentials that a cap would, while expanding financial opportunities for younger players and players who earn MLB spots later in their careers. While the players proposal is more of a wish list, it is wrapped around one absolutely unshakable point, which is that the MLBPA will not consider a salary cap under any circumstances. While the Commissioner and his office have been trying to sell the cap and floor to the players by pointing out the proposed cap and floor would cost 8 teams about $580M in payroll, but it would compel 12 teams to raise their payrolls a little over $615M.
While things will develop very quickly, the starting positions by both sides couldn’t be further apart. It also isn’t helped by the complete lack of trust in the MLB owners by the MLBPA. They have resisted every effort for any kind of consistent transparency in their revenue or financial situations, so the MLBPA rejects the owners position that small market teams are uncompetitive and there’s no other mechanism but a cap to re-establish parity. As Paul Beeston famously said: “Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4 million profit into a $2 million loss, and I can get every national accounting firm to agree with me.” Even if the cap is tied directly to a 50/50 revenue split, there is absolutely no doubt by the players the ownership will contort itself every which way possible financially to separate various lines of business out as baseball revenue to reduce that number.
So in this environment of strong distrust, a game where payrolls for some have exploded and for others receded amidst record revenue and franchise values and truly eyepopping contracts handed out to star players, is there a way to find common ground without losing games, is there an avenue for both sides to step down and kick the bigger issues down the road another five years, or is this finally time for the all out war over a salary cap that has been brewing for over fifty years?
