#salary-cap-rules

#salary-cap-rules

"I feel like 100 is the new 95," said Los Angeles Dodgers reliever Will Klein, who first hit 100 in a summer ball all-star game in 2020 and expects to again this season, having topped out thus far at 98.8 mph. "It used to be, 'You throw 95, that's gas.' Now, it's 100. And now you see starters out there sitting 100."

My parents had family visiting the small town where we all still live. It was the mid-80s, and bowling was just becoming a thing in bigger cities like Sydney.

The owners of Major League Baseball's 30 teams, who made their wealth through the workings of free enterprise capitalism, want to limit what players can be paid. This apparent political and philosophical irony will most likely lead to a shutdown of baseball at the end of this season.

The possible implementation of a salary cap is one of the biggest issues dividing Major League Baseball and the Players Association (MLBPA) as collective bargaining agreement (CBA) negotiations are set to begin in the spring. The league believes a salary cap is necessary to improve competitive balance, while the players remain strongly against one, as it would limit their potential earnings. As it currently stands, MLB is the only major North American professional sports league without a salary cap.

That would ordinarily come with a $32.5MM average annual value that counts against the team's luxury tax ledger. In most cases, a contract's luxury tax number is taken by dividing the number of guaranteed years from the overall amount of guaranteed money - regardless of the salary distribution. Unlocked performance bonuses or option decisions can subsequently change the calculation, but the AAV is the starting point.

Many in the industry expect a lockout and some even worry about the potential for lost games in 2027. Jon Heyman and Joel Sherman of The New York Post report that the league has put aside a war chest of about $2 billion, roughly $75MM per team, from a central fund to help weather a potentially lengthy stoppage. The MLBPA has made similar preparations but the report doesn't provide specifics for that side.

MLB is the only one of the four major American sports without a minimum and maximum limit to spending, and some owners may be looking to change that. According to Jon Heyman of MLB Network, the early projections from the league suggest a salary cap of around $260-280 million, along with a salary floor of around $140-160 million.