As MLB’s CBA expires, a looming labor fight could reshape baseball’s future

By: Joe Wisniewski

September 23, 2025

Photo Credit: Associated Press

Major League Baseball is once again staring down the possibility of a labor stoppage. The current collective bargaining agreement expires in December 2026, and both sides are already bracing for a battle. At the center of the looming showdown is a question that has defined baseball’s landscape for decades: Will the league finally introduce a salary cap?

For owners, the case for change has hardly ever been stronger. Payroll disparities have reached unprecedented levels. Big-spending teams like the Dodgers and Mets are committing more than $300 million to player salaries, while clubs at the bottom operate at less than a quarter of that. The league’s luxury tax system, designed to discourage runaway spending, has been treated more like a surcharge than a deterrent by the richest clubs.

At the same time, the collapse of the regional sports network model has shaken MLB’s financial foundation. For years, local television deals propped up payrolls, but subscriber declines and bankruptcies have left teams uncertain about future media revenues. With national media rights set to expire in 2028, owners see an opportunity to reset the business model, and a cap, paired with a salary floor, would provide the cost certainty broadcasters and streaming partners are seeking. Players, however, remain firmly opposed. The MLB Players Association has long rejected any form of salary cap, viewing it as a restriction on free-market value and guaranteed earnings. From the players’ perspective, the real problem is not overspending by a handful of big-market teams, but rather owners in smaller markets choosing not to invest competitively.

For owners, a cap system could stabilize franchise values and create more predictable cost structures. For players, the risk is capped earnings and limited contract flexibility. And for the league as a whole, the danger is another prolonged lockout, potentially the first to erase regular-season games since 1995, at a time when competition from other sports and entertainment options is fiercer than ever. Three broad scenarios are on the table. The first is a compromise where a cap is introduced alongside a salary floor, forcing lower-spending teams to invest more while limiting top-end payrolls. The second is a hard line on both sides, producing an extended lockout and risking lost revenue and fan engagement. The third is an adjusted status quo, with steeper luxury taxes and enhanced revenue-sharing but no hard cap.

As the clock ticks toward December 2026, the league’s leadership faces a defining moment. Baseball has stood apart from other major U.S. sports by resisting a cap, leaning on its traditions and market forces. Whether that system can survive another round of labor talks or instead, the league finally joins its peers in adopting a cap-and-floor model, it will shape the economics of MLB for decades to come.