Baseball endured its longest work stoppage in 1994-95 over the owners’ insistence on implementing a salary cap system. They did not get one. But the fight over whether to adopt such a system inflicted a serious and long-lasting injury to the game’s relationship with its fans.
For those paying attention to the discussions around expiration of the current collective bargaining agreement in December of this year, the central issue is all too familiar. The owners still want a salary cap, and the players’ union still appears unalterably opposed to one. If Yogi Berra were alive today, he would no doubt describe the coming 2026 labor dispute as “deja vu all over again.”
MLB’s owners have not pressed their desire for a salary cap in contract negotiations since the disastrous 1994-95 labor dispute. This time they are doing so. And the result could again be very bad for the game.
The 1994 Strike
On August 11, 1994, the MLB season was rich with great stories. Greg Maddux was well on his way to the best season of his Hall of Fame career. He was 16-6 with an ERA of 1.56, WHIP of 0.896 and 202 strikeouts. With almost 30% of the scheduled games remaining he already had compiled 8.5 bWAR. On the hitting side, Tony Gwynn was batting .394 in 475 plate appearances and appeared to have a realistic chance to be the first .400 hitter since Ted Williams in 1941. And two players, Matt Williams and Ken Griffey Jr., were on pace to threaten Roger Maris’s home run record. The two teams with the most wins also presented compelling stories. The Montreal Expos, with an MLB-best record of 70-43, were having the best year of their 15-season existence. The second best record belonged to the New York Yankees, who had not been to the postseason since 1981, the longest drought in their storied history. And fan interest in the game was at a peak with MLB enjoying the highest average per game attendance ever.
On August 12, all those story lines came to an abrupt end when MLB players went on strike. With their current collective bargaining agreement set to expire in December 1994, the owners and players’ union had begun negotiations in June on a new agreement. Faced with the owners’ insistence on imposing a salary cap, the MLBPA went on strike.
Negotiators for the players’ union and MLB did not come close to resolving their differences. The last bargaining session during the season took place on August 31. On September 14, Commissioner Bud Selig announced that MLB was cancelling the remainder of the 1994 season, including the World Series.1 After federally mediated negotiations broke down in December, MLB declared an impasse, and its owners voted overwhelmingly to implement a salary cap. In January, the owners voted to play the 1995 season without current MLB players if the union refused to agree to the cap. By March, teams had begun assembling rosters of replacement players.
The strike was not resolved until March 29, 1995, after a federal judge issued an injunction preventing MLB from unilaterally implementing a new collective bargaining agreement and beginning the season with replacement players.2
Although play resumed in 1995, with a reduced schedule of 144 games, the strike and cancellation of the 1994 season had alienated a large number of the game’s fans. As sportswriter Howard Bryant described it, “people had just had enough. No one knew what revenue sharing was or salary caps. All they knew was that there were two entities of really rich people that couldn’t get it together.” Average attendance in 1995 declined 20% from 1994. Twenty million fewer fans went to games. Over the 20 years from 1974 to 1994, average attendance had doubled—from 15,437 to 31,256. It was not until 12 seasons after the strike that attendance reached its 1994 level.
Two phenomena prevented the carnage from being even worse than it was. First, in the 1995 season, Cal Ripken completed his assault on Lou Gehrig’s consecutive games played record and was embraced by fans around baseball as he did so. It was impossible to hold a grudge against a player who so clearly loved the game and appreciated its fans. Second, MLB’s Faustian bargain with users of performance enhancing drugs helped rekindle fan interest in the game. The exhilarating 1998 season in particular, with the epic home run battle between Mark McGwire and Sammy Sosa, seized the imagination and interest of millions of fans. Of course, that salvation became its own curse as fans eventually reacted in disgust to the widespread use of PEDs.
MLB did not avoid fan backlash from the strike and cancellation of the ‘94 season, but it eventually weathered the storm. And according to the narrator of Ken Burns’s documentary Baseball, both sides had learned a lesson: “The owners and the players knew they could never risk alienating the public again.” And yet here we are—on the brink of them doing just that.
The Players’ Opening Proposals
On May 27, the MLBPA released the players’ opening set of proposals for a new collective bargaining agreement. MLBPA’s interim executive director Bruce Meyer described the union’s agenda as follows: “Our goal is to preserve and improve baseball’s market system, rewarding competition on and off the field. . . . Ultimately, our proposals are designed to build upon the incredible momentum and popularity of our sport world-wide.”
The players proposal addresses competitive balance with several provisions to encourage and enable all teams to spend money on player salaries, including:
increased revenue sharing that initially guarantees small market clubs a minimum of $240 million in revenue each season;
extra revenue sharing for low-income teams that qualify for the postseason;
penalties for franchises that fail to meet minimum payroll benchmarks or neglect to spend revenue sharing payments on team payroll.
Among the things directly related to player earnings, the union wants:
a minimum major league salary of $1.5 million beginning in 2027;
expansion of salary arbitration eligibility and enhanced guarantees for players in arbitration;
stricter rules to curtail service time manipulation;
qualified free agency for players with five or more years of service who have reached age 30.
The Owners’ Proposals
In the month following the union’s opening proposal, MLB rolled out a series of its own, which range from conciliatory to incendiary.
First, MLB opened with a proposed floor-and-cap system that would set both minimum and maximum payroll levels for teams: a salary cap of $245.3 million and a floor of $171.2 million in 2027. According to MLB, seven teams currently exceed that cap and would have to reduce their payrolls next season to comply. It also appears that at least 12 teams are below the minimum and thus would have to boost total salary. For a couple teams, it would require more than doubling their payroll.
As part of this proposal, MLB said the owners would commit to the players receiving 50% of all “baseball revenues” and would agree to increased revenue sharing, including local TV revenue.3 According to MLB, the 50-50 split would be a boon to players because, it contends, team revenues have been increasing faster that player compensation since 2003. The fine print of the proposal provides that player salaries could be adjusted to make sure owners get their designated percentage of revenue. To enforce this, the owners want to hold up to 10 percent of player salaries in escrow each year to see if revenue justifies their contractual pay.
MLB’s commentary around this proposal has emphasized that it is good for both the fans and the players. MLB spokesman Glen Caplin asserted that complaints from the union were unfounded because “[o]ur salary cap and floor proposal addresses our fans’ concerns by leveling the playing field while sharing baseball revenue with the players 50/50 like the other leagues.” The comparison to other major U.S. professional sports has become a recurring theme in MLB’s PR campaign to support its position on the salary cap.
Two weeks after its opening salvo, MLB offered up a second one relating to drafting and signing young players. It is not merely a series of tweaks to the existing system. Rather, this proposal would effect a major overhaul of the current draft and the economics of signing both domestic and international players.
The owners want to make several key changes. First, they would reduce the draft from 20 rounds to 12.4 Second, they would eliminate drafting players directly out of high school. Under the MLB proposal, all players would have be two years removed from graduating high school and at least 20 years old before being eligible for the draft.5 Third, the revised draft procedure would implement a fixed $200 million signing-bonus pool, with inflexible “hard” slots assigned to picks in each round. Under the current system, players may negotiate bonuses above the value assigned to their pick.
The proposal also calls for implementing a new international draft, eliminating free agent signings of international players and raising the age for international player signings to 18.6
The overall effect of this proposal would be to shrink the number of new players signed by MLB each year and the number who will be developed through the minor league system. MLB has been steadily eroding the minor leagues, eliminating levels of minor league play and the number of minor league franchises affiliated with MLB teams. This proposal is a move to slash the cost of minor league players even further.7 It would also eliminate many developmental opportunities for players not yet ready to play in the show and opportunities to bring in young players who might otherwise pursue different professional sports. Among the four baseball constituencies—owners, players, fans and the game—only the owners would derive any benefit from this proposal.
Finally, on June 25th, the owners publicly released their third set of proposals, which seek to impose significant limitations on free agency. Free agent contracts would be limited to five years (six if the player signs with his current team), and contract values would be limited to roughly $202 million in 2017 ($265 million if the player signs with his current team). Deferred compensation deals would be prohibited. Players would be free to sign longer term contracts before they become eligible for free agency, but such contracts would also be subject to a schedule of maximum values. If these changes were adopted, contracts awarded to players such as Mike Trout, Bryce Harper, Shohei Ohtani, Aaron Judge, Juan Soto, Francisco Lindor and Dansby Swanson would become a thing of the past.
In this proposal, MLB also said it would agree to increase the minimum salary to $1 million, reduce from six years to five the period of service for players age 30 or older to reach free agency, and eliminate the “qualifying offer” compensation system for free agent signings.
The Coming 2027 Lockout
In the Ken Burns Baseball series, George Will describes as “carnivorous” the toxic cycle of strikes and lockouts that have come to characterize the negotiation of each new contract between MLB’s owners and the MLBPA. “A terrible legacy grew up where it was expected that when a collective bargaining agreement expired, the two sides would be at daggers drawn, and you would have a work stoppage.” That legacy has not been erased.
MLBPA’s interim executive director Bruce Meyer said earlier this year—well before MLB had released any of its proposals—that he believes “a lockout is all but guaranteed at the end of the agreement.” Commissioner Rob Manfred insists that MLB does not expect a lockout and that his only “contingency plan” is to sign an agreement to play the 2027 season. But history and Manfred’s assertion he has “an ownership group that is more united than any group in my entire time in baseball” suggest otherwise. Negotiations leading to the current CBA reached agreement only on the eve of opening day after a 99-day lockout in 2021-22. And the owners that year did not go into the negotiation insisting on implementing a salary cap or limiting free agency contracts.
The union’s response to MLB’s proposals has been aggressively negative. As Bruce Meyer, the MLBPA’s interim executive director, put it, “To date, the league’s proposals are totally unserious and completely contingent on remaking the game to protect owner profits at the expense of players and fans.” Jeff Passan, in a detailed comparison of the owners’ proposed salary cap to the cap systems in other sports, says there is “zero indication” the union is prepared to engage on that issue. If he is right, a lockout appears to be a certainty.
So, if there is a lockout, how bad will it be? On the one hand, there appear to be significant points of agreement that could be the basis of a new CBA. Both sides have proposed an increase in the minimum player salary, and the gap between $1 million and $1.5 million certainly seems like one ripe for compromise. Both the owners and the players are on board with a revamped system of revenue sharing (most importantly local TV revenues) to increase resources available to small market teams. MLB has stated it would accept the players’ proposal to reduce from six years to five the time to reach free agency for players who are at least 30 year old and eliminate the “qualifying offer” element of free agency. And finally, MLB has proposed a floor for spending that would require significant payroll increases by at least a third of MLB franchises. These changes would both benefit players and serve what MLB touts as the overriding goal of increasing “competitive balance.”
But there is a major catch. All of the points of apparent agreement above are contingent on the players agreeing to a salary cap and limitations on free agent contracts. And even the apparently benign proposal of a 50-50 split in revenues is fraught with difficulties. MLB franchises are increasingly reaping profits from ancillary sources, such as contracts with online gambling enterprises and real estate development around ballparks. The union views MLB’s definition of “baseball revenue” as far too constrained. They see the owners as seeking to lock players into a decreasing share of the owners’ ever-expanding revenue stream.8
Given MLB’s determination to implement a salary cap and curtail free agency contracts, it seems at least possible that the lockout could be as ugly as the 1994 strike. The owners are acutely aware of the frustration felt by fans of small market teams tired of seeing their favorite young stars signed away by teams with the ability and willingness to offer astronomical free agent contracts. They apparently believe that a salary cap, marketed as the only way to achieve competitive balance, is an issue that will resonate with baseball fans. And they are prepared to heap scorn on the players for opposing such a “reasonable” demand.
MLB has commenced an ad campaign with the tag line “Level the Playing Field” touting the virtue of its salary cap proposal as critical to restoring competitive balance. Specifically, it has posted on MLB.com that fans “overwhelmingly support a salary cap and floor, like all the other major American professional sports have long used, because they don’t believe a $446 million spending gap from top to bottom is a fair fight.” What MLB doesn’t say in its PR campaign is that a significant motivation for the salary cap is to increase franchise profits and values, as a number of owners and MLB executives have acknowledged quietly.
The owners may be right about fans’ opinions. In June, The Athletic published the result of a survey it conducted of 8,500 baseball fans on issues related to the upcoming labor negotiations. Of those polled, 74% said they agreed that “the league’s payroll disparity has created an unfair fight” among MLB’s 30 franchises. Fifty-eight percent of respondents said they favored a cap-and-floor system to remedy this disparity. Respondents had no illusions about who such a system would benefit: only 6% said players would benefit more than the owners. But it doesn’t matter. Only 29% said they cared “much” about how a new labor agreement would affect player earnings.
Ultimately, however, MLB may overestimate the good will of fans who are generally sympathetic to the demand for a salary cap. Many fans will no doubt view this fight as one between billionaires and millionaires over how to divide a vast multi-billion-dollar revenue pie. Who gets the better of that argument matters far less to most fans than the quality of competition they see on the field, particularly as waged by their home team. And unlike 1994, it will be the owners, not the players, who initiate the work stoppage. A lengthy disruption of play seems likely to elicit a damaging pox-on-both-houses response.
The owners’ proposals so far, and how those proposals are being spun, also appear to reflect a belief that they can drive a wedge among elements of the players by pitting superstars against journeymen and young players against veterans. In its public statements supporting the owners’ proposals, MLB has asserted that its changes in free agency rules would benefit 98% of MLB players, while adversely affecting only the richest 2%. This claim, while ostensibly directed to baseball fans, plainly has as its intended audience the members of the union who ultimately will have to vote on any new CBA.
MLBPA’s leadership is waging its own battle for the hearts and minds of both fans and rank and file members of the players’ union. In response to MLB’s published justifications for the owners’ proposals, the union has responded: “Don’t buy their PR stunts — no matter what they claim, their ultimate goal is to remake the game under a system that restricts salaries, hinders competition, pits players against each other, and does nothing to level the playing field or bring costs down for fans.’’ The last point, while true, may come off as disingenuous since nothing in the player proposals appears designed to lower costs to the fans.
It is hard to know how seriously to take MLB’s proposal to revamp the draft, which is less likely to be an issue fans care about. It can be viewed as a set of bargaining chips for the owners to trade away as a concession to secure the salary cap and free agency limitations they covet. Or maybe MLB is determined to get both, figuring that since the draft revisions do not affect current MLB players, it can secure agreement to these with a few relatively minor concessions to the union’s list of asks that have consequences for players at the MLB level.
The MLBPA has responded to the proposed draft restructuring as “bad for baseball,” saying that it “would cripple the next generation of players and damage the future of our game.” But it is unclear just how hard, when push comes to shove, the union is willing to fight for “the next generation.”
Finally, the owners may have determined they can weather the storm of a long lockout economically. In 2020, they endured having a full season’s worth of gate and concession receipts, plus four months of television revenue, unexpectedly wiped out by the pandemic. This time, the owners have been preparing for the possibility of a long work stoppage by building a reserve fund over the last five years that is widely reported to be at least $2 billion. In addition, as reported by Evan Drelich of The Athletic, MLB maintains an investment fund called Baseball Endowment LP worth at least $1.3 billion, which MLB could tap if needed. They survived a short season in 2020, and franchise values have climbed steadily since then. They may well believe they can do it again.
So far, the players are projecting solidarity and do not appear any more willing to accept a hard cap than they were in 1994. In summing up the players’ position on MLB’s cap proposal, Bruce Meyer said that the owners “effectively managed to cobble together the worst system for players in any of the major sports and it’s not even close.”
How long could the season be delayed? MLB proved in 2020 that a 60-game season beginning at the end of July could work and could still produce a compelling and lucrative postseason. Maybe they are prepared to try that again. So it is not implausible to imagine a lockout that extends past the All Star Game. One difference, of course, is that the truncated 2020 season was the result of a worldwide pandemic, not a breath-holding contest over how to split baseball’s multi-billion-dollar pot. Fans were excited to have baseball back in 2021. It is far less clear that will be the case if a significant portion of the 2027 season is lost to a lockout.
The Donald Trump Factor
A recent article in Baseball Prospectus by Daniel Epstein notes that Donald Trump may be a significant wild card in a standoff between MLB and the MLBPA. Epstein recounts the history of presidential involvement in past baseball labor disputes, in which presidents have consistently declined to take sides. This has been true of both pro-labor and pro-management administrations.
During the first baseball strike in 1972, President Nixon, an ardent baseball fan whose track record was distinctly anti-labor, offered the services of a federal mediator to help the parties resolve their dispute. But he took no position on the merits of the two sides’ positions. Fifty years later during the 2021-22 lockout, President Biden’s Secretary of Labor Marty Walsh offered “to help facilitate productive conversations that result in the best outcome for workers and employers.” Beyond that, President Biden, a famously pro-labor president, did not get involved. During the lengthy 1994-95 strike, President Clinton at one point ordered MLB owners and players to engage in mediation and reach a settlement. But while he pushed for a resolution of the strike, like Nixon and Biden he did not take a side. The closest he came was recommending that Congress pass the Major League Baseball Restoration Act, which would have compelled the two sides to engage in binding arbitration. (The legislation did not pass.)
This time, there is a distinct possibility President Trump may try to put his thumb on the scale. He has already issued a statement setting out his position on the central point of contention between the players and owners: “If you don’t have a salary cap, you don’t have a sport, because they can’t help themselves.” (This assertion ignores that for 50 years MLB has had free agency without a salary cap, and yet continues to sell more than 70 million tickets per year to its games.) Given his recent intervention in overturning the suspension of USMNT player Folarian Balogun, there is little reason to doubt Trump would get involved in the upcoming lockout if he has the urge to do so. This seems especially possible if he perceives that public opinion reflects sympathy with the owners’ position.
What could he do? In 1995, the National Labor Relations Board was instrumental in ending baseball’s longest work stoppage by preventing MLB from unilaterally imposing a salary cap on the players. Now that the Supreme Court has ruled the president has unfettered authority to replace commissioners of formerly independent federal entities such as the NLRB, members of that board may have little choice but to do Trump’s bidding and support the owners if they get involved in this dispute. He has also shown an inclination to issue executive orders whether or not tethered to some solid legal ground. So perhaps he would try to impose a solution by executive decree. In either case, the courts could intervene, but that process is far from certain to produce a result different from the one Trump may seek to dictate.
* * *
It is too early to know how this is going to play out. A crippling work stoppage, in which significant games (or even the whole 2027 season) are lost, is not inevitable.
It is always possible that MLB will agree a cap is not necessary for competitive balance, because it is not. MLB insists that the problem is the spending gap between high-payroll and low-payroll teams. That reflects both the limited resources of some franchises and the unwillingness of some owners to spend on talent. Both problems can be addressed without a cap. One way is through revenue sharing, with local television revenue (treasure troves for teams like the Dodgers, Yankees and Mets) included in the shared pool to guarantee each franchise something like $240 million of revenue starting in 2017. MLB has agreed to this in principle. The second is through incentives/requirements to ensure small market teams spend that money on players. MLB has already proposed a salary floor of $171 million. With agreement on these points, the owners and players ought to be able to hammer out a series of compromises on the remaining issues.
There are also scenarios under which economic pressure could cause one side or the other to cave. MLB will be negotiating a new media right agreement in 2027. This could be a significant deterrent to a long lockout that might devalue the product the owners will be seeking to market in a multi-billion dollar package. On the other side, a substantial segment of the rank and file members of the MLBPA could find enough value in MLB’s concessions that they would vote to accept some form of salary cap in order to avoid losing a substantial part of the season.9
We will see. But unlike baseball being played on the field, it will not be fun to watch.
While one might have expected the Commissioner’s office to be a voice of reason forging a prompt compromise, the Commissioner’s prime directive was to serve the financial interests of MLB franchise owners. The owners had forced out Commissioner Fay Vincent in 1992 for being too conciliatory to the players. And the owners were determined to go to the wall on their demand for a salary cap. Commissioner Selig did nothing to deter them.
That federal judge, Sonia Sotomayor, had recently assumed the bench as a district judge in the Southern District of New York. A federal appeals court refused to vacate her injunction and later unanimously affirmed her decision that the owners had violated federal labor laws.
This proposal is nothing new or groundbreaking. A 50-50 revenue split was also part of the owners’ proposal in 1994 during the negotiations before MLB cancelled the season.
In case you think draft picks beyond the 12th round are pointless, consider these players who were taken in rounds 13-20: Albert Pujols (13), Jim Thome (13), Dave Parker (14), Jose Canseco (15), Kenny Lofton (17), Orel Hersheiser (17), Don Mattingly (19) Ryne Sandberg (20) and Jeff Kent (20).
To give some idea how big an impact this rule would have, seven of the first 21 picks in the recent 2026 draft were players taken directly out of high school. A number of current MLB players were drafted at age 18 or younger, including Bryce Harper, Bobby Witt Jr. and Jackson Holliday.
The age discrepancy between eligibility for domestic and international players would produce some anomalous results. Bryce Harper broke into the majors (and was Rookie of the Year) at age 19, as did Juan Soto (who finished second to Ronald Acuna Jr. in ROY voting). Under the new draft rules proposed by MLB, Harper would not have been able to play at age 19, though Soto, as an international signee, would have.
It is not hard to imagine that MLB owners have looked longingly at the NFL and NBA, which have essentially no carrying costs for minor leagues. Instead, they rely on colleges (and in the case of the NBA, European leagues) to prepare the players they sign to their rosters.
The Atlanta Braves are publicly owned and thus are the only franchise to disclose detailed financial data. In its most recent filing, the Braves organization reported that “baseball revenue” was up 3%, while “mixed-use development,” which includes the team’s real estate project around Truist Park, was up 26%.
When the last round of bargaining ended in March 2022, the MLBPA’s 38-player executive board voted 26-12 to accept MLB’s proposal. The union’s board includes two groups: an executive subcommittee comprised of eight players who work closely with union officials and 30 player representatives, one from each team. All eight subcommittee members voted to reject the deal, while 26 of the 30 player representatives voted to accept it.