Opening day for the Major League Baseball season is approaching in late March, but it appears it will look different in 2027 as the MLB’s Collective Bargaining Agreement (CBA) will expire.
The MLB’s CBA is a contract in which players, represented by the Major League Baseball Players Association (MLBPA), and MLB team owners agree on revenue sharing, player earnings, and rules around the game. It is a labor agreement between the two sides.
The current CBA contract is set to expire on Dec. 1, 2026. If a new CBA contract is not agreed upon before the Dec. 1st deadline, a lockout is expected to follow. A lockout consists of all MLB businesses shutting down.
MLB is known for its unique system without salary cap rules. MLB owners can spend as much money on players as they like. Unlike the National Football League, where there is a salary cap, meaning teams can only spend so much money on players, the MLB has a luxury tax.
The MLB luxury tax (Competitive Balance Tax) comes into play when a team spends more than $244 million. Teams are taxed at 20% of their revenue above the tax threshold. After a second year, teams are taxed 30% of their revenue. Finally, after three years over the threshold, teams are taxed at 50% of their revenue and subject to penalties in the MLB draft.
“I think it is stupid that us fans have to suffer the loss of no baseball, possibly because a bunch of rich owners won’t agree to pay players more,” said Lorenzo Weaver, a junior management information systems major. “The fans are the reason baseball is so profitable, so why should us fans have to bear the consequences of a disagreement?”
A major part of the upcoming dispute between the MLBPA and the owners is the disparity of revenue sharing. Big market teams, like the Los Angeles Dodgers and the New York Mets, have ignored the luxury tax in the past few seasons, spending north of $500 million on payroll. This stems from big-market teams having highly profitable television contracts and higher team revenue.
Smaller market teams, like the Tampa Bay Rays and the Pittsburgh Pirates, average a team payroll of $100 million. These teams can replicate the revenue of big market teams. This results in a clear disparity of play on the baseball field.
A big argument that will be discussed in the 2026 Winter Meeting between the MLBPA and the owners is the salary cap. Players have been vocal about their strong opposition to a salary cap because it threatens their potential earnings. Players have always had the chance to maximize their earnings, and a salary cap threatens that. Owners across the MLB have been advocating for a salary cap to decrease the disparity in payrolls.
“I know that there are a bunch of factors that go into a new CBA agreement, but I think it’s stupid that the owners want a salary cap,” said Brady DeCan, a senior business major. “Baseball has never needed a salary cap, so why put one in place now. These small-market owners that do not spend money have the money, they just do not spend it, which is stupid.”
Lockouts in the MLB are not exactly common, as there have been just four lockouts in the history of the MLB, the last one dating back to 2011.
A lockout simply is a work stoppage. All business across the MLB will halt, as players are not allowed in facilities, free agents can negotiate contracts and more. The last lockout in MLB history was from 1994 to 1995. The lockout lasted 232 days, resulting in the cancellation of the 1994 World Series.
“I think that the disparity between good teams and bad teams is as bad as it has ever been,” said freshman Jace Weir, a junior marketing major. “Something has to be done to fix the overall product of the game. I’m not sure what the solution is, but something has changed.”
