Eight MLB Clubs Face $528 Million Payroll Cut Under New Cap Plan
Owners propose a $258.2 million hard limit starting in 2028, a move that forces top spending teams to slash budgets before the next season.
By Bianca Herrera ·
Major League Baseball owners want to force eight of the league's highest-paying teams to cut $528 million from their rosters by 2028. The proposal, delivered to players on Tuesday, introduces a hard salary cap of $258.2 million and a mandatory floor of $180.2 million. This financial structure would apply to average annual values using luxury tax payrolls.
Boston, the Chicago Cubs, the Los Angeles Dodgers, the New York Mets, the New York Yankees, Philadelphia, San Diego, and Toronto are the clubs that must reduce spending to meet the new ceiling. Conversely, twelve other teams, including World Series champion Milwaukee and American League champion Tampa Bay, would need to add $636 million to their payrolls to reach the floor. The list of teams required to increase spending also includes the Athletics, the Chicago White Sox, Cincinnati, Cleveland, Colorado, Miami, Minnesota, Pittsburgh, St. Louis, and Washington.
MLB spokesman Glen Caplin said in a statement that clubs need a full offseason to adjust to the new system. He argued that delaying the start until 2028 allows for a smoother transition without holding back other player benefits. Those benefits include earlier free agency, a $1 million minimum salary, a 30% increase to the pre-arbitration bonus pool, and transactional reforms designed to reduce roster churn.
The proposal includes a one-time bonus for players funded by luxury tax proceeds currently earmarked for 401(k) accounts. Players with 2026 service time will receive payments based on their time in the majors. Those who play at least 172 of the 187-day regular season will get $285,000. Players with three-quarters of that service time will receive $213,400, while those with half a year will get $142,300. A quarter of service time yields $71,100.
The five-year labor contract expires on Dec. 1, and a lockout is expected if the union does not agree to the new terms. The players' association has previously stated it will not accept a salary cap, a concept MLB has not proposed since the 1994 strike negotiations. Management indicated it is open to discussing phase-in timelines and procedures while keeping the current luxury tax system and revenue-sharing plan for 2027.
The offer also addresses free-agent eligibility rules. Owners agree to the union's request to lower the service time requirement for free agency from six seasons to five for players aged 30 and older. In exchange, a player's team retains the right to make a qualifying offer under current rules. If a player rejects that offer, they become eligible for salary arbitration. The proposal also accepts the union's plan to eliminate qualifying offers for all other free agents.
