Owners and Players Association to commence formal labour negotiations over salary cap implementation
The Los Angeles Dodgers' high payroll and use of deferred contracts, particularly regarding Shohei Ohtani, are cited as key factors driving the push for a cap.
Major League Baseball owners and the MLB Players Association are set to commence formal labour negotiations in the coming weeks, with the implementation of a salary cap identified as the central issue. Discussions are expected to begin in May or June 2026, providing a window ahead of the current collective-bargaining agreement which expires at 11:59 p.m. ET on 1 December 2026.
The owners are pushing for a salary cap to address concerns regarding competitive imbalance, specifically citing the Los Angeles Dodgers' ability to outspend other franchises. A key sub-issue involves ending the use of deferred contracts, such as the one utilised by the Dodgers for Shohei Ohtani. The Dodgers' projected competitive-balance payroll sits at $416.8 million, significantly higher than the New York Mets' $379.1 million.
The Dodgers have recently signed outfielder Kyle Tucker to a four-year, $240 million deal and closer Edwin Díaz to a three-year, $69 million deal. These high-profile signings, combined with the team's reliance on deferred contracts, are viewed by owners as exacerbating the gap between top and bottom-market teams. Players have long considered a salary cap a non-starter, viewing it as an infringement on their ability to negotiate individually.
If a new deal is not reached by the 1 December deadline, owners are expected to lock out the players. This scenario could delay the start of the 2027 season until March, mirroring the timeline of the 2021–2022 dispute. During the last labour dispute, spring training games were affected, yet the league was able to play a normal 162-game slate during the 2022 season.
The fact that both sides are willing to sit down so early in the season suggests an acknowledgement that these negotiations will take time. However, the potential for a protracted standoff remains high if the salary cap proves to be the true sticking point in talks. The current CBA has historically prevented a salary cap, leading to ongoing concerns about competitive balance as wealthy franchises dominate free-agent signings.
