As the Los Angeles Dodgers clinched their second straight World Series Championship on Saturday night, the baseball world was once again in a frenzy over whether or not it is fair how much money the Dodgers can spend on players. With just under a year until the new collective bargaining agreement (CBA) negotiations are set to take place, many are starting to stress the need for a salary cap so that big market teams can not continue to “ruin” the sport. But how much has their financial advantage really mattered, and could every team use their own cash to catch up?
The short answer is no. Not every team could feasibly spend this kind of money, but yes, competitive balance needs to be restored.
According to spotrac.com, the Dodgers had the highest 2025 total payroll in MLB at $350,024,106. The Dodgers’ Fall Classic opponents, the Blue Jays, were also in the top five, sliding in at that last slot with $255,230,405. All of the teams above them made the Postseason except for the New York Mets, who despite having the second-highest payroll, suffered a stunning collapse after being a World Series favorite at the end of May. While this proves that money is not going to ever be the only factor leading teams to success, it does seem as if these Mets were the exception and not the rule.
MLB’s current system is set up in a way that teams can spend as much money as they want, but if they reach a certain threshold in payroll, they have to pay a “Luxury Tax.” In 2025, that number was set at $241 million, per spotrac.com.
Eight teams (Dodgers, Blue Jays, Mets, Red Sox, Phillies, Yankees, Astros, Padres) crossed that number. All but the Mets and Astros made it to October.
Proponents of the current system are not wrong in saying that money alone does not dictate success. That money still has to be spent in the right places, and that requires the right people to be in charge. Where the money is an issue, however, is what I mentioned earlier. Not every team can do what Los Angeles has done.
In 2024, based on data from Forbes, the average MLB team revenue was somewhere in the ballpark of $407 million. After their luxury tax payment, this year’s Dodgers had a payroll almost $10 million more than that. It is very hard, nearly impossible even, for a league to have parity when a team can dish out more money to players alone than an average franchise brings in. 20 teams had less revenue last year than the Dodgers did payroll in 2025.
While there is revenue sharing between teams so that smaller markets do get some help, the fact of the matter is a team like the Rays, who brought in just under $300 million in 2024 and had a payroll of less than $100 million this year, could never match up with LA in terms of star power or player quality with less than a quarter of their player budget.
So, how can these issues be solved through the 2026-27 CBA negotiations? Here is my plan, borrowing a bit of what works from other leagues and applying it to today’s baseball world:
For starters, owners should push hard for both a soft salary cap with a tax, and a hard ceiling as well starting around $350-75 million (including tax), and slightly increasing annually similar to the NFL’s model. There will also be a floor set somewhere above $100 million and adjusting at the same rate as the maximum. This way, the Dodgers can’t drop $400 million and buy championships, but you also won’t have 1/6 of the league spending under nine figures.
In exchange for agreeing to a cap, the players will get 50% of the baseball revenue, following the NBA’s system. This would get them 50 cents on the dollar for TV deals, merchandise sales, and even ticket sales. While it wouldn’t be perfect, this would save money for teams trying to win, force teams who aren’t putting in effort to step up their game, while also getting the players a good bit of that contract money back that they lose through the cap.
One more sweetener for players just to finish the deal would be having them hit free agency after four or five years in the league instead of six, allowing them to take a chance on the open market at a younger age to maximize their value since there would be little to no $700 million contracts when teams are limited in their spending.
With a lockout starting to loom over MLB, these financial issues are going to be the make-or-break topics that either save or destroy the 2027 season. One thing is for sure, however, and that is when baseball comes back with a new CBA, the sport will look very, very different.