MLB Proposes $258.2 Million Salary Cap Starting in 2028

Major League Baseball owners proposed a hard salary cap of $258.2 million for the 2028 season, aiming to shift the league from its current luxury tax model to a strict financial ceiling. The proposal, delivered on Tuesday, also includes a mandatory spending floor of $180.2 million. This move comes just one day after free agency negotiations began for the 2026-27 offseason.

The owners argue that teams face too many existing financial commitments to reduce spending quickly enough for a 2027 start. Glen Caplin, an MLB spokesman, stated that clubs need a full offseason to prepare for the new system. He noted that the delay would allow a smoother transition without delaying other player benefits, such as earlier free agency and a $1 million minimum salary.

Under the plan, MLB would retain the current luxury tax system and revenue-sharing rules for 2027. The thresholds and tax rates would remain identical to those in 2026. Starting in 2028, the league would centralize media revenue and implement the cap and floor based on average annual values.

Management identified eight teams that would need to cut payroll to meet the 2028 cap. These clubs are the Boston Red Sox, Chicago Cubs, Los Angeles Dodgers, New York Mets, New York Yankees, Philadelphia Phillies, San Diego Padres, and Toronto Blue Jays. Together, these teams would have to reduce their current payroll by a combined $528 million.

Conversely, twelve teams would need to increase spending by $636 million to reach the mandatory floor. These include the Oakland Athletics, Chicago White Sox, Cincinnati Reds, Cleveland Guardians, Colorado Rockies, Miami Marlins, Milwaukee Brewers, Minnesota Twins, Pittsburgh Pirates, St. Louis Cardinals, Tampa Bay Rays, and Washington Nationals.

The proposal includes a one-time bonus for players, funded by luxury tax proceeds currently earmarked for 401(k) accounts. Players who log at least 172 days of service in the 187-day 2026 regular season would receive $285,000. Those with three-quarters of a year of service would get $213,400, half a season would earn $142,300, and a quarter season would pay $71,100.

Owners also agreed to lower the service time required for free-agent eligibility from six seasons to five for players aged 30 and older. Teams would retain the right to make a qualifying offer to those players. If a player rejects that offer, they become eligible for salary arbitration. The current five-year labor contract expires on December 1, and management expects to lock out the union if no deal is reached.