Noah S. Pearson
Staff Editor, Delaware Journal of Corporate Law, Volume 50
Introduction
In 2003, author Michael Lewis published Moneyball: The Art of Winning an Unfair Game.[1] The true story follows former Oakland Athletics’ General Manager, Billy Beane, who creates a championship-caliber roster despite severe financial constraints imposed by the team’s ownership.[2] Greater attention to baseball analytics arose after the book’s release, bringing public scrutiny to Major League Baseball’s financial operations.[3]
As of 2024, player payroll disparities remain a glaring issue in baseball. Currently, the New York Mets had the highest payroll of approximately $317.5 million while the Oakland Athletics had the lowest payroll nearing $47.3 million.[4] In furtherance of having the highest payroll of 2024, the New York Mets broke the internet when ESPN reporter Jeff Passan announced they had signed superstar outfielder Juan Soto to a jaw-dropping fifteen-year, $765 million contract.[5] With this great disproportion of money dealt to the league’s top superstars, how can Major League Baseball bridge this gap?
On December 1, 2026, the Collective Bargaining Agreement (CBA) between the 30 Major League Baseball Clubs (Clubs) and the Major League Baseball Players Association (MLBPA) will expire. There has been much speculation that a new CBA will introduce a salary cap, which is a fixed limit on total player salaries. This may cause a rift between the Clubs and the MLBPA. Introducing a salary cap will limit the earnings members of the MLBPA can receive. The consensus amongst the Clubs is that a fixed limit to player payroll would lead to a level playing field across the thirty Major League Clubs.[6] The real question is whether implementing a salary cap is truly necessary for competitive balance or simply an excuse for lower-spending owners who are reluctant to invest at the same level as top-tier clubs.
The MLBPA’s Stance
The purpose of the MLBPA is to ensure that its members are ensured safety and fair play in the midst of contract negotiations amongst the various Clubs.[7] Tony Clark, the director of the MLBPA, is committed to empowering its members and maximizing their values.[8] But even Clark acknowledges the recent extravagant spending and “free reign” that some wealthy Clubs possess can “stretch the integrity of the game.”[9] The MLBPA has consistently opposed the implementation of a salary cap and is expected to maintain this stance in the upcoming CBA negotiations.[10]
This could lead to a similar situation the two organizations faced following the 1993 Major League Baseball season. In the historic standoff, the MLBPA rejected a proposed salary cap, arguing it would reduce player salaries and unfairly distribute revenue.[11] The dispute escalated up to the U.S. Court of Appeals for the Second Circuit where current Supreme Court Justice Sonia Sotomayor upheld the lower court’s ruling that (1) an injunction compelling observation of anticollusion and free agency provisions did not infringe on owners’ rights to bargain through an exclusive representative; (2) free agency and reserve issues were mandatory subjects of collective bargaining; (3) salary arbitration was mandatory subject of collective bargaining; and (4) injunctive relief preventing the MLB from using replacement players.[12] Former President Barack Obama even credited Justice Sotomayor for saving baseball when nominating her for the Supreme Court.[13] Following Justice Sotomayor’s ruling, a new CBA was agreed upon by both parties, ending the longest work stoppage in major league professional sports.[14] If the MLBPA was willing to go this far thirty years ago, it is hard to imagine them taking a backseat today, where its star players drive the league more than ever.
The Club Owners’ Entanglement
There are mixed opinions amongst the owners on whether a salary cap should be implemented. On one hand, many of the organizations who spend less money on player salaries are in favor of adding a salary cap.[15] This will force the higher-spending teams to decrease spending on players, thus leveling the playing field. But, the owners of the teams that tend to allocate more funds to their players do not think they should be coerced into spending less money due to a willingness to invest in superstar players to win games.[16] This is an interesting dynamic—who would have thought that owners of Major League Baseball teams would be opposed to cutting their costs?
Although there is some disagreement amongst team owners as to whether implementing a salary cap is beneficial to Major League Baseball, this may be a negotiation tactic for the upcoming CBA.[17] The key aspect of the salary cap debacle that owners want to convey is “to convince everyone that they want a salary cap, but not necessarily to actually want one.”[18] The true compromise that many of the lower-spending teams desire is to create a more severe luxury tax threshold.[19] This would impose significant taxes on teams for spending over a certain amount of money, while a salary cap strictly prevents them from spending over a certain amount of money.[20] A more aggressive luxury tax would prevent teams such as the Los Angeles Dodgers and New York Mets from disbursing over $300 million per year to its players. The implementation of a salary cap could be a threat made by the Clubs in the upcoming CBA negotiations, which could urge the MLBPA to compromise in order to avoid a lockout.
Conclusion
A setting similar to the 1994–95 standoff would not be ideal for the players, owners, and most importantly, the fans. Baseball is nicknamed America’s Pastime as it brings people together by displaying city pride through competitive sports. But, as we all know, Major League Baseball is not just about city pride and sports entertainment; it is a business. Both the MLBPA and the Clubs will work extensively to come to an agreement to prevent a lockout, but the negotiations will generate a new CBA that will significantly alter salary spending in Major League Baseball.
About the Author
Noah is a second-year law student at Widener University Delaware Law School. He serves as a Staff Editor for Volume 50 and is the upcoming Web Editor for Volume 51 of the Delaware Journal of Corporate Law. Before law school, Noah earned his bachelor’s degree in finance from Indiana University’s Kelley School of Business. Following his first year in law school, Noah interned for the Honorable Judge Craig Levin in the Pennsylvania Court of Common Pleas in Philadelphia, Pennsylvania. In the summer of 2025, Noah will be a Law Clerk at Zarwin Baum DeVito Kaplan Schaer & Toddy, P.C. in Philadelphia. Upon graduation, Noah looks forward to applying his passion for sports and entertainment law, along with his strong interest in corporate law, to his future career.
[1] Michael Lewis, Moneyball: The Art of Winning an Unfair Game (2004).
[2] Id.
[3] Randy Bean, Moneyball 20 Years Later: A Progress Report on Data and Analytics in Professional Sports, Forbes (Sept. 18, 2022, 6:33 PM), https://www.forbes.com/sites/randybean/2022/09/18/moneyball-20-years-later-a-progress-report-on-data-and-analytics-in-professional-sports/.
[4] MLB Team Salary Payroll Tracker, Spotrac, https://www.spotrac.com/mlb/payroll/_/year/2024/sort/cap_total2 (last visited Feb. 25, 2025).
[5] Jeff Passan (@JeffPassan), X (Dec. 8, 2024, 10:10 PM), https://x.com/JeffPassan/status/1865957256824750297?lang=en.
[6] Maury Brown, MLB Has an Economic Disparity Problem; Here’s How to Fix It, Forbes (Jan. 9, 2025, 2:55 PM), https://www.forbes.com/sites/maurybrown/2025/01/09/mlb-has-an-economic-disparity-problem-heres-how-to-fix-it/.
[7] About, Major League Baseball Players, https://www.mlbplayers.com/about (last visited Apr. 4, 2025).
[8] Michael Hanich, MLBPA Director Reveals Salary Cap Stance Amid Growing Concerns over Dodgers’ Spending, Athlon Sports (Feb. 25, 2025, 10:40 AM), https://athlonsports.com/mlb/los-angeles-dodgers/mlbpa-director-reveals-salary-cap-stance-amid-growing-concerns-over-spending.
[9] Id.
[10] Mike Mazzeo, MLBPA’s Andrew Miller Not Convinced That Salary Cap Would Be a ‘Cure,’ Sports Bus. J. (Mar. 25, 2025), https://www.sportsbusinessjournal.com/Articles/2025/03/25/mlbpas-miller-not-convinced-that-salary-cap-would-be-a-cure/#:~:text=The%20MLBPA%20has%20long%20been,and%20have%20nots%20remains%20significant.
[11] Adrienne Goehler, Reliving the 1994 MLB Strike 28 Years Later, Sports Illustrated (Feb. 21, 2022), https://www.si.com/mlb/guardians/opinion/reliving-the-1994-mlb-strike-as-2022-labor-negotiations-continue.
[12] Silverman v. Major League Baseball Player Rels. Comm., Inc., 67 F.3d 1054, 1062 (2nd Cir. 1995).
[13] Ari Shapiro, Looking Back at Sotomayor’s 1995 Baseball Ruling, NPR (May 27, 2009, 6:00 AM), https://www.npr.org/2009/05/27/104597470/looking-back-at-sotomayors-1995-baseball-ruling.
[14] Scott Allen, Sonia Sotomayor May Not Have ‘Saved Baseball’ in 1995, but She Set it on a Path to Labor Peace, Wash. Post (Dec. 2, 2021), https://www.washingtonpost.com/sports/2021/12/02/sonia-sotomayor-baseball-work-stoppage/.
[15] Marc Normandin, Do MLB Owners Want a Salary Cap, or for Everyone to Believe That’s True?, Patreon (Feb. 10, 2025), https://www.marcnormandin.com/2025/02/10/mlb-owners-salary-cap-2026-cba/.
[16] Id.
[17] Id.
[18] Id.
[19] Normandin, supra note 15.
[20] Id.
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