As fall gives way to winter, there are many notable events on the horizon: the iconic Macy’s Thanksgiving Day Parade, beloved winter village pop-ups, and the expiration of the Collective Bargaining Agreement (CBA) between Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA). The current agreement, originally reached in 2022 following a lockout that delayed Opening Day, is set to expire on December 1, 2026 at 11:59 P.M. EST. Negotiations over a successor agreement are widely expected to lead to another lockout, jeopardizing the entire 2027 season.
The Major League CBA “establishes the terms that govern player employment, compensation, benefits, working conditions, and the overall structure of the game.” Article VI of the current CBA establishes minimum player salaries, outlines salary adjustment calculations, and sets forth the rules governing salary arbitration. Conspicuously absent, however, is any provision imposing a maximum annual salary—commonly known as a salary cap. MLB is the only major North American professional sports league without a salary cap. Instead, the CBA contains a provision establishing a Competitive Balance Tax, a form of “luxury tax” that penalizes teams whose payrolls exceed specified thresholds. However, this luxury tax has proven insufficient to deter some of the league’s highest-spending teams from investing heavily in expensive players.
MLB faces growing frustration from fans who argue that high-spending teams enjoy an unfair competitive advantage, particularly as the payroll gap between the league’s highest- and lowest-spending teams has surpassed $400 million. In response to these concerns, MLB has proposed a new CBA that would establish both a salary floor and a hard salary cap, imposing an explicit limit on team payroll spending. Unsurprisingly, the MLBPA opposes such a cap. The resulting impasse in collective bargaining over salary negotiations threatens to trigger a lockout that in turn could jeopardize the 2027 season.
This raises two pressing questions for baseball fans: Should MLB adopt a salary cap, and are strikes and lockouts the only legal mechanisms available to resolve the dispute?
The Salary Cap Positions
The League argues that a hard salary cap would improve competitive balance by limiting the spending advantages of wealthier franchises. A salary could operate by “pit[ting] classes of players against each other. Any dollar spent on one player is a dollar redistributed from another.” Moreover, owners favor a salary cap because its implementation could increase franchise values, thereby generating greater returns on their investments. From the players’ perspective, however, a salary cap modeled on the NBA’s system, as proposed by the Commissioner, could reduce player compensation by 5.5%.
Many fans support a salary cap because they fear that teams like the Dodgers, who have won back-to-back World Series titles, can leverage their already deep pockets to consistently outspend smaller-market teams, exacerbating the league’s existing competitive imbalance. Fans of smaller-market teams relish the opportunity to compete for a postseason berth, and at a minimum, advance to the League Division Series.
The League’s proposed hard salary cap faces staunch opposition from the players, and whether such a cap would meaningfully improve competitive parity still remains uncertain. If MLB hopes to avoid a prolonged labor dispute and protect the 2027 season and beyond, it must consider alternative measures that promote competitive balance without restricting players’ ability to negotiate salaries that reflect their market value. Possible solutions include strengthening the existing luxury tax system while introducing a salary floor.
Legal Avenues
MLB’s antitrust exemption presents an additional complication for government intervention in these labor disputes. In Federal Baseball Club v. National League (1922), the Supreme Court held that the Sherman Antitrust Act did not apply to MLB, writing that “professional baseball players and umpires were not afforded the same legal protections as those in other professional sports.” While subsequent legislation has narrowed the scope of this exemption, particularly with respect to major league players’ employment, it continues to shield certain aspects of MLB’s operations from antitrust scrutiny. Consequently, strikes and lockouts remain among the principal sources of leverage available to the MLBPA and team owners during collective bargaining. Although Congress could further narrow MLB’s antitrust exemption, such action would not necessarily resolve the underlying labor dispute between the League and its players.
The 1994 dispute between MLB and MLBPA over a proposed salary cap shows the stakes of a negotiation impasse and the limited availability of a judicial remedy. A deadlock in negotiations culminated in a players’ strike that resulted in the cancellation of the 1994 postseason. During the strike, League owners declared an impasse and attempted to unilaterally implement a salary cap and eliminate salary arbitration. After further negotiations, the owners imposed additional changes affecting free agency and salary arbitration. MLBPA alleged that the owners were bargaining in bad faith and filed a complaint with the NLRB.
In response to the owners’ actions, then-Judge Sotomayor subsequently issued an injunction blocking MLB owners from unilaterally eliminating free agency and salary arbitration, restoring the status quo under the previous CBA. Although the ruling highlights that judicial intervention may offer a limited remedy for protecting players’ labor rights amidst negotiation breakdowns, courts cannot substitute their own judgment for a negotiated agreement or legislative action. Similarly, the NLRB’s authority is limited to ensuring the protection of employees’ labor rights; it cannot compel the parties to reach a new CBA.
President Donald Trump has publicly voiced support for a salary cap, but his capacity to impose one through executive action is constitutionally limited. His ability to influence the debate is more likely to operate through the court of public opinion than through direct intervention.
Ultimately, unless MLB and the MLBPA can reach a compromise on the proposed salary cap and other disputed provisions, a lockout following the expiration of the current CBA remains a distinct possibility. Although federal labor law provides mechanisms to address unlawful bargaining practices, neither the courts nor the NLRB can guarantee a negotiated resolution.