The gap between the highest spenders and the cheapest teams has never been this wide. In 2025, teams like the New York Mets ($323.1 million) and Los Angeles Dodgers ($321.3 million) were the only teams spending over $300 million this season. However, there were three teams whose payroll was less than $80 million on Opening Day: the Miami Marlins ($67.4 million), Athletics ($73.1 million), and Tampa Bay Rays ($79.2 million). This has become the biggest issue in Major League Baseball over the past few seasons, and concerns are only growing larger. Players are becoming frustrated at the idea of a salary cap, potentially leading to even more issues with MLB Commissioner Rob Manfred.
Major League Baseball is no stranger to “lockouts”, which are basically a strike until the players’ association and Major League Baseball officials are able to come to an agreement. The most recent lockout occurred during the 2021 offseason and Spring Training, lasting 99 days.
Regardless of whether the situation worsens into a lockout, the question still stands: What is the best move for Major League Baseball and its players? Does a salary cap or floor make sense for baseball, and if so, which one could be better for the sport?
In this article, I will break down each scenario, explaining the concept and examining the pros and cons of both a salary cap and a floor. I will utilize research from players, analysts, and other reputable outlets to construct arguments for both sides.
The Truth About a Salary Cap in Baseball
A salary cap is used in every major sport in the United States, including in the NBA and NFL. However, Major League Baseball is the only major sport in the United States that does not use a salary cap; it uses a luxury tax. In 2025, the threshold limit was $251 million, and if an MLB team spends more than that on its team, it is required to pay a progressive tax. If they continue to stay over the amount, the penalties become bigger.
The National Basketball Association has a similar system in place, called the “soft” salary cap, which means there are ways teams can spend over the limit in certain situations. However, if you spend too much, you risk losing future draft picks.
Why is a salary cap important? It’s simple: it keeps leagues on an even playing field. For example, there are cities known as “big markets,” and they are known to sign lucrative deals with big time free agents. Cities like Chicago, Los Angeles, New York City, and Miami are just some of the big markets in sports. These cities profit more compared to smaller teams in smaller markets. A salary cap levels the playing field, making the sport more competitive and balanced.
So why does baseball not use a salary cap? Another easy answer: the Player’s Association (MLBPA) says no to a salary cap. Players have been against a salary cap because they want to have no limit to how big their contract can be. Players in Major League Baseball have been able to receive longer and larger contracts than in any other sports league. For example, just last off-season, Juan Soto signed with the New York Mets for a record-breaking 15-year/$765 million, making this the biggest contract signed in professional sports history. With a salary cap, players would be able to set their value as high as they potentially will be in the futures of their careers, which meaning less money coming their way.
The Los Angeles Dodgers and the New York Mets are the two biggest spenders in the MLB, and people were getting frustrated with them. From the surface, it makes sense. People were upset that their team’s best player would continue to leave to join either one of these squads. Blake Snell, Tyler Glasnow, Shohei Ohtani, and Freddie Freeman all left their previous organizations during free agency to sign with the Dodgers. However, people are starting to understand that the reason why players are willing to sign and play for the Los Angeles Dodgers is that they are offering them longer contracts and the most money. It seems a salary cap could fix this issue; however, the problem is not Los Angeles buying talent, the problem is the rest of baseball trying to retain their talent.
The Real Effects of Adding a Salary Floor
A salary floor forces teams to spend a certain amount of money each year on players, and they could be penalized if they do not meet the requirements. There are many different reasons for a salary floor to be implemented. It helps push owners and organizations to spend their money on talented players, rather than running a cheap organization. It also promotes a competitive balance, meaning that teams are forcing themselves to pay for talent and compete year in and year out.
The NBA is the only league that has a set salary floor, which is at $139.2 million. The main reason for the NBA implementing a salary floor is due to the lack of competitiveness once teams are eliminated from the postseason, and they are trying to get a better draft pick by losing games. The NFL doesn’t have a set salary floor, but each team is supposed to spend 89% of its salary cap in a four-year span, and if it does not, it could be penalized and lose draft picks.
Why hasn’t the MLB adopted a salary floor? The main reason for no salary floor is that it could restrict smaller market teams and could force them to spend more money than they would be able to make. This could cause teams to move to different markets, overpay for low-end talent, and force teams to lose money. There is a chance that a salary floor changes nothing, with bigger markets still able to outspend the low markets due to the financial strain it could have on certain organizations.
The Miami Marlins and the Chicago White Sox are the two cheapest teams in baseball and have missed the postseason in back-to-back seasons. Both of these squads are rebuilding; however, this means there is no incentive to pay talented players for instant success. These teams will try and build through the draft, trades, and acquire as much talent for their minor league systems to improve. This is the only option for struggling teams, but this means that they aren’t paying to at least try and stay competitive.
So, Which Model Fits MLB Best?
Both of these solutions have their pros and cons, but I believe the two could work hand-in-hand, like the NBA. However, with how the idea of a salary cap has disgruntled players, the solution should be the salary floor. At the bare minimum, teams will be forced to pay a specific amount each year to try and stay competitive. In the future, MLB should consider implementing some form of salary cap to control the playing field even more, giving teams the opportunity to pay big-time talent.
Just a few years ago, MLB decided to implement new rules changes, the biggest being the installation of the pitch clock. At first, fans were upset and angry, feeling like their sport was being changed for the worse. However, these rules have seemed to work, for the time being. Games are quicker, players are stealing bases more than ever, and teams are finding different ways to compete and win with these new rules.
I’m not saying that a new financial system will be as successful as these rule changes. I will say teams and players should consider all options when trying to make the game better for the players, staff, and the fans.
Baseball is changing in many ways. At the end of the day, it will always be known as “America’s Pastime”.
