Should the MLB have a Salary Cap?

Joseph McLaughlin
2 minutes ago
5 min read

Photo Credit: Robert Gauthier/Los Angeles Times.

Buying Championships

It was a 0-2 count with one out and runners on the corners in the bottom of the 11th in Game 7 of the 2025 World Series. Christian Kirk stepped into the batter’s box for the Toronto Blue Jays to face off against Los Angeles Dodgers pitcher Yoshinobu Yamamoto.

The pitch came, and Kirk swung. His bat shattered as the ball bounced into the glove of Mookie Betts, who stepped on second base and then fired over to Freddie Freeman at first base to seal the double play.

That’s when the celebration began.

For the second year in a row, the Dodgers are World Champions, and are the first team since the New York Yankees in 2000 to win back-to-back championships. The series was thrilling, as the Dodgers came back from a 3-2 deficit in the series and a 4-2 deficit in Game 7 to secure a second consecutive title.

However, the Dodgers’ victory has sparked debates throughout the world of baseball, all of which have centered around one question: Should Major League Baseball adopt a salary cap?

Now, this is not an idea made only so the Dodgers do not win another World Series for another 40 years or so. This is a topic of discussion that is not new and has been a debate that has been going on for years and has now resurfaced in a new way, larger than before.

After all, the Dodgers had the most expensive roster in 2025, spending approximately $350 million on player salaries. Along with the competitive balance tax (or luxury tax), Los Angeles’ payroll rises to roughly $400 million. That is more than triple the average MLB team’s payroll.

This has caused many to bring the salary cap discussion back, but it seems even more likely now that this could be a potential direction baseball heads in. But what would an MLB salary cap look like?

How Would a Salary Cap Work?

To best answer that, it is best to know what a salary cap is and how it is used in other professional sports leagues in the United States. A salary cap is a limit on the total money a professional sports team can spend on player salaries in a given season.

This system is used in leagues such as the National Football League, the National Hockey League, and the National Basketball Association in different ways. Both the NFL and NHL use hard caps in their salary cap rules, meaning there is a set limit a team cannot exceed, while the NBA uses a soft cap with exceptions to going over the limit; however, that also means heavier penalties for going over that limit.

The MLB, however, uses neither version of the salary cap. Instead, what the league uses is a luxury tax system that penalizes a team for going over a certain payment threshold. For instance, a team can be charged 20% in taxes for a first-time offense. This increases to 30% for two consecutive years and 50% for three or more offenses in a row. This sounds detrimental, and it is. However, it does not affect larger market teams the same way it would smaller market teams, since larger teams, like the Dodgers, have more money at their disposal to spend.

The Dodgers, for example, have a net worth of about $7 billion, making them one of the most valuable franchises in the world. Even then, the team has deferred a lot of players' salaries for the future to avoid this taxation penalty in the present.

This has been the spark of the controversy with the current Los Angeles Dodgers, as this system allows wealthier teams from large markets such as Los Angeles, New York, Chicago, and Philadelphia to spend more money on star players in the short term, automatically placing them further ahead than smaller market teams.

The Dodgers took advantage of this when signing Freddie Freeman in 2022, then Shohei Ohtani and Yamamoto in 2023, while holding onto stars such as Betts and Clayton Kershaw. Many teams and fans have called this an unfair use of wealth and power within the baseball market to win championships, and have sparked the idea of a salary cap.

Baseball Commissioner Robert Manfred and MLBPA Executive Director Tony Clark speaking before the 2021 World Series. Photo Credit: Ron Blum/Associated Press.

Will This Actually Happen?

Yet, the salary cap would cause a huge debate between MLB owners and the MLB Players Association. Many owners, especially of smaller teams, favor taking the side of the salary cap as it would promote fairer competition and would result in smaller salary payouts. However, not all owners agree. Owners of teams such as the Dodgers and Yankees, whom the current system favors, obviously do not want to give that away. Another perspective to think about is the players, who would not like a cap since it would reduce their salaries and diminish player value in the baseball market.

These two ideas clashing together would likely cause a shutdown similar to what was seen in 1994, when MLB owners and the MLB Players' Association could not come to terms on an agreement, with increasing salaries becoming a priority among players at the time. This shutdown would go so far as to cancel the 1994 Playoffs and World Series and even some of the 1995 season. A scenario that the MLB would like to avoid and would likely give in to the MLBPA's demands.

Creating a salary cap may not have its intended effect, however, as it could not change competitive balance that much. That is a factor that would have to be tested, but players certainly are opposed to the reduction in their salaries. This would create a larger problem in the sport with diminished market value of talented players and discouragement among the best of the best to play in large market areas.

I would be curious to see how a salary cap would work in the MLB. Perhaps something similar to the NBA’s soft cap could be the perfect middle ground. Yet, I would hate to see this debate cause the cancellation of an entire baseball season as it did in 1994. No baseball at all is not good for the game, and for that reason, I would stick with the traditional competitive balance tax.

It may leave smaller market teams in the dark during the short term, but it will come back to bite the bigger teams in the future. The Dodgers are enjoying the fruits of the labor of generational stars that deserve all the accolades and spotlights they are getting. However, their salaries will not be maintainable forever, and I see the Dodgers dealing with tax problems in the near future that may take them out of the running for some time. For example, the Dodgers have their own sword of Damocles in Shohei Ohtani's $680 million price tag dangling over their heads.

Graphic Credit: Spotrac on @ Brooksgate.

Also, all of that money spent by the Dodgers was taken to a Game 7 by a smaller market Toronto Blue Jays team with many young and talented players, making the case that small market teams can compete with the largest ones.

Both teams delivered one of the best World Series I can remember, and wherever this debate goes, I will be rooting for the continuation of baseball and the opportunity that more series like this one can be enjoyed by fans across the country.

Whether or not the MLB will implement a salary cap remains to be seen and is certainly a discussion point this offseason. It is important to keep an eye out for how this story develops as this is a decision that can change the sport of baseball forever moving forward. Right now, however, the Dodgers earned their right to sip champagne as champions once again and the talented players wearing blue will be looking to run it back again in 2026.