How to Fix the MLB Payroll System. (Cap)

At this point, I think the tigers know there’s gonna be a big lockout in 2027. Which makes sense with virtually no payroll on the table for 2028. And I do not blame the tigers for not trying. If you are not in the top five payrolls in baseball you have no shot.

So the fix? Look at the other 3 major sports

1 Rev Sharing

2 No LONG Deferments

3 Cap

4 Floor

1 Revenue sharing.

Every other league has major revenue sharing. Ignore NFL because it is so massive and most of its Revenue comes from National league deals. Vs the other 3 is mostly local deals.

The other 2 Take the league wide money and divide it up to the teams that need it more. (Ie Boston, new york, LA etc get little to none, Milwakee, Utah etc gets a lot)

Using estimates based on league growth.

Heres a Per team average of revenue estimates for 2027 (just for formulating the 2028 figures)

Average team Revenue $450m.

$120m from the league (TV and Sponsorships)

$200m from Tickets, Merch, Parking, Concessions etc

$130m from Local TV and Sponsorships

The issue with the model is Big markets like the Dodgers are making OVER $1 BILLION from local markets. Meaning lower end markets are making less than $150m. Theres no way to compete.

So make a Rev share system. Where that National money is distributed to lower teams, vs hoping theres enough Tax bills to make up the difference. Meaning most teams will get over $150m from MLB

2 no long term deferments. I like what the NHL just did. Limit a signing bonus to 60% of the total contract. And no greater than a 20% year over year difference in annual pay. So if a player makes $2m their final year. The deferment can only be $1.6-2.4m (vs Otani makes $2m his final year and a $68m deferment)

Now those contracts will be grand fathered in unfortunately. But no more!

3 Salary CAP!

So either a Salary cap or a SUPER SUPER strict tax (like NBA) NBA tax rate is between 100-500% for first time offenders and 300-700% for repeaters vs MLB is only 20-50% for first time and 50-80% for repeaters. Major difference.

But the cap is based off league revenue. In every other league. About 45-50% lets just call it the 50%

So 450m average revenue. Thats a $225m cap. NO GRANDFATHERING. And only the LA dodgers are currently over $225m for 2028. At ~254m cutting $30m is easy.

Now why would the Players union agree to that?

4 FLOOR!

All 3 major sports have a floor. NFL & NBA is 90% NHL is 75%. Lets split the difference at 85% why 85%? Because that would force enough teams to spend to make up the difference in the teams that would need to cut. So the total league average payroll would be higher than previous years.

So in short.

1 rev sharing to help the lower markets

2 No major deferments

3 Salary cap of 50% of the prior year revenue

4 salary floor of 85% of the cap.

Everyone makes money

Players get better contracts

Other teams wont have to keep up with the jones’s

Competitive balance to finally make the league more enjoyable to watch.

2 Likes

Some good ideas but gonna be an absolute cluster ■■■■ of a negotiation to get a new deal.

Another issue is all of these opt out after year 1 type contracts.

2 Likes

Once you have a cap and floor. (Both sides meet in the middle)

And limit the deferments (really only affects cap numbers)

The opt outs will be more of a player to player deal. Thats more of a Player/ agent vs Team case by case basis. I dont see a problem with it at all.

Only about 10 percent of owners use them. They are like poison pills that eliminate most of the teams.

I completely agree with the Phillies GM and what he said last week.

1 Like