Welcome aboard the only operating time machine in American sports media. As you read this, you are being throttled forward in time by roughly a year. (“Roughly” because the machine still has trouble with exact dates.) Soon, you will be on the lapsed side of the current collective bargaining agreement between Major League Baseball and the Players Association, set to expire at 11:59 p.m. ET on Dec. 1, 2026 (or exactly one year from today). Soon, you might find yourself in the midst of another owner-imposed lockout.
Although this offseason is only starting to heat up, curious minds have questions about how next winter, and its potentially nasty labor talks, will play out. The top concern, according to proprietary internal surveying, pertains to the possibility of a salary cap. That’s predictable enough. The World Series just featured a matchup of two of the sport’s five highest payrolls. The Los Angeles Dodgers, behind a roster loaded with well-compensated stars, just became the first repeat champion in more than two decades, securing their third title in five years.
Ah, that beeping noise means the machine has arrived as its destination. For the sake of avoiding any butterfly effect shenanigans, everyone will remain in this room, where future events can be accessed through a computer terminal that enables read-only access to the stories of tomorrow. Let’s flip through some baseball articles to see what’s going on. Here’s a piece that quotes the Cleveland team president as saying: “We cannot stay in the League and compete against [the richer] teams.”
And here’s one where a high-ranking official with another team bemoans the game’s uneven financial state: “While New York, Boston, and Chicago can afford to pay fancy salaries, the other cities cannot.”
Here’s a third official, cutting in a different direction by pointing out that the players should accept a salary cap mechanism, lest they want to anger the public with their perceived greed.
“The players know better,” Boston’s team president said. “The public would not sympathize with them, and in a way they are dependent on the public, because we can afford to pay big salaries through the support of the games by the public.”
Those labor talks must not be going well. That doesn’t seem like a good sign for Opening Day 2027. But wait just a minute. Oh dear, this is embarrassing. The knob was turned in the wrong direction. This machine didn’t hurtle forward to next winter; it went backward — not by a year, but by nearly 150 years. In fact, all of those quotes stem from the same article, published by the Cleveland Leader in May 1889.
One should always aspire to learn from their mistakes. The obvious lesson is to be more careful with that dial, but the above quotes suggest there’s something else worth being mindful about: for as long as professional baseball has existed, there has been a fight between the owners and the players over a salary cap. The surest way to gain an appreciation for what may come is to understand what has transpired in the past.
With that in mind, CBS Sports has highlighted four particular spats from baseball’s history concerning the salary cap that prove the topic is nothing new under the stadium lights.
Competitor leagues, collective action (1889-1903)
Before the National League became a living monument to professional baseball history, a collection of team owners steered the league to the brink. By unilaterally imposing a salary cap on the players, the owners spawned multiple competitor leagues that proved to be a bigger hit with players and fans alike.
The National Association of Professional Base Ball Players came online in 1871. The NL followed suit a few years later, beginning play in 1876. Within 15 years, the owners were conspiring to control costs however they could. There was no Players Association, no collective bargaining, and the reserve clause was being sharpened into a weapon against player agency. It was the perfect time, then, for Indianapolis Hoosiers steward John T. Brush to sell the other magnates on his “Classification Plan.”
Brush’s grand division saw every player “classified” into one of several tiers. Those tiers would each have a maximum individual salary attached, with no player slated to earn even $3,000 (though teams eagerly circumvented that rule for star players). This was the genesis of the salary cap, if only in execution and not conception. An article in the Cleveland Plain Dealer noted how Brush’s plan was predated by an attempt earlier in the decade from fellow owner Charles H. Bulkley.
Whereas Bulkley’s efforts were undercut in part by Albert Spalding, who found it impractical for various reasons (Bulkley wanted each player paid according to their position), Brush’s plan was approved while Spalding was on a world tour with a slew of players, attempting to spread the game.
One of the players on Spalding’s promotional tour was John Montgomery Ward, a star infielder for the New York Giants who had earned a law degree. He would eventually make the Hall of Fame, but his contributions extend far beyond what he did on the field or in the dugout during his days as a player and manager. The year before Brush’s plan was imposed, Ward had formed the Brotherhood of Professional Base Ball Players, the first attempt at a union in professional sports.
Such was the level of distrust between the players and the owners on financial matters. Author Robert Smith, in his book “Baseball in America,” wrote that baseball’s owners at the time were viewed as “men whose fingers tightened automatically over a dollar, and who checked their receipts secretly and put on a poor mouth to the players.” Ward put his own feelings about the game into print, too, writing for a magazine. He was particularly irked by how teams could and would sell players to other clubs without the player benefitting financially. To him, that practice was “a conspiracy, pure and simple, on the part of the clubs, by which they are making money rightfully belonging to the players.”
Rather than strike, Ward and the Brotherhood of Professional Base Ball Players chose a different tack to combat the National League and its salary cap: they founded a competitor league, since christened the Players’ League (PL). The PL promised players more agency and higher wages. But the ballplayers still needed its share of financial backers. Those would come to include Albert L. Johnson, a Cleveland-based trolley-car developer who no doubt saw dollar signs when he thought about the possibility of a new league and new stadiums. Nevertheless, Albert’s brother offered the following, positively Wardian observation to The Sporting News:
Besides furnishing the best ball in the country, the players will have the sympathy of the people with them. No man living that I know of feels friendly to the way the League bosses have been running things. This selling and trading of players as though they were so much cattle is all wrong and the time has come when the players must take the bull by the horns and do something for themselves.
The PL would soon become the destination for players. King Kelly, Old Hoss Radbourn, and Dan Brouthers, among other future Hall of Famers, gladly defected from the NL. Fans came in swarms, too. The PL outdrew both the NL and the waning American Association in a slew of shared cities, including Boston, Chicago, New York, and Philadelphia.
The NL may have been on the ropes, but they had some advantages that could not be matched by the less entrenched PL. As SABR contributor Gordon J. Gattie observed: “The PL was led by men with baseball knowledge but little financial knowledge; the NL was led by men with some baseball knowledge and greater financial acumen.”
The NL began to fight back, offering players grand sums if they abandoned the upstart PL. The players, though, did not up and fold, one and all. In Marty Appel’s book about King Kelly, he detailed the NL’s recruitment efforts: Spalding offered Kelly $10,000 and a three-year contract for whatever amount he wanted, provided he would return to the NL. Kelly deliberated but ultimately declined.
Spalding asked: “What? You don’t want the $10,000?” To which Kelly said: “Aw, I want the $10,000 bad enough; but I’ve thought the matter all over, and I can’t go back on the boys.”
For as much resolve as Ward, Kelly, and other players showed, the Players’ League would cease operations after one season. Without consulting the players, the PL’s financial backers reached an agreement with the NL and several of the PL franchises merged with existing NL entities. Ward and other defectors would return to the same league that had driven them out with their unfair cost-control mechanism.
Yet the end of the PL was not the end of existential threats toward the NL.
In March 1900, Western League commissioner Byron “Ban” Johnson and a slew of other recognizable names (such as Connie Mack and Charles Comiskey) gathered in a Milwaukee hotel and made two declarations: They were now going to operate as a major league and they were now to be known as the American League.
Just as the Players’ League successfully raided and outdrew the National League, the American League did the same. Once again, though, the NL persisted by striking an agreement. This time, the NL and the AL would join forces, with their respective champions competing against one another in what was named the World Series.
The NBA opens the door (1985)
The salary cap in its sustained form is a modern achievement. Various professional sports leagues, baseball and basketball included, failed in past attempts to cap salaries during their existence. It wasn’t until 1984 when the National Basketball Association became the first of the major men’s professional leagues to stick the landing. Executives could hardly contain their excitement.
“It felt like my first day in law school, looking at the Internal Revenue code,” Minnesota Timberwolves president Bob Stein told the Star Tribune about his initial exposure to the cap after the franchise was minted in 1989.
The concept had snaked its way through contemporary MLB circles well before the NBA’s installation. Even Henry Aaron, underpaid throughout his legendary career, had voiced support for a cap during his candidacy to replace Bowie Kuhn as the league’s commissioner. (“We have to be fair to the Calvin Griffiths too,” he said of the Minnesota Twins’ frugal magnate.) Yet the owners, unable to control themselves following the dawning of salary arbitration and free agency, rallied around the NBA’s example as a guiding light to help them pass through financial instability.
The league’s top labor negotiator, Lee MacPhail, said the owners’ proposed plan was “patterned after the NBA’s.” It was more radical than it sounds. The concept would have established an average payroll level around $10 million. Teams above that threshold would have been restricted from partaking in free agency or adding salary through trades. (They could’ve still retained their own players.) Conversely, teams below the figure could add money through trades, albeit only up to the amount of the average payroll level. The proposal would have had an undeniable chilling effect on free agency and salary growth alike, something that MacPhail readily admitted.
“All we were trying to do was slow the dramatic increase in salaries,” MacPhail told reporters during negotiations.
The economics of the league were undeniably different then than they are today. Some of the talking points and some of the same sleight of hand tricks were already in place, however.
The owners had claimed combined operating losses exceeding $40 million. Commissioner Peter Ueberroth ordered the teams to turn their books over for union examination. The union then sponsored a report from Stanford economist Roger Noll, who found that the teams had actually earned a $25 million profit that was hidden with clever accounting tricks. As John Helyar described in “The Lords of the Realm”:
Turner’s Braves were paid only $1 million for TV rights by Turner’s SuperStation WTBS. They should have been getting at least the league average of $2.7 million. The Cardinals reported no revenue from parking and concessions, but another Anheuser-Busch subsidiary was raking in $2.5 million from that. The Yankees’ $9 million loss included Steinbrenner’s real estate investments in Tampa and $500,000 worth of charity contributions.
The salary cap proposal drew ire from both expected and unexpected sources. MLBPA head Donald Fehr said “[the owners] seem to think that, in the 20th century, fundamental capitalistic economics don’t work. We do.” Ueberroth got in on the action too, rejecting the salary cap proposal by defining himself as a “free-enterprise man.”
The owners eventually shifted their focus from a salary cap to an overhaul of the arbitration system. Not only did they want to reduce the eligibility pool by necessitating another year of service time to qualify (something they did achieve), they wanted a maximum cap on raises. Under their proposal, players would be limited to gains of 100% of their previous year’s salary.
An agreement would not be reached until after the sixth labor stoppage in MLB history and the third of the ’80s. The Players Association would authorize and execute a two-day strike. Compromised games would later be rescheduled. Before the ink dried on the new CBA, the owners were already thinking about the next one.
“It doesn’t accomplish our objective of having the clubs at break-even by 1988,” MacPhail later told the New York Times. “I’m sorry we couldn’t get more for the clubs. Anything we said about the financial stability of baseball wasn’t bargaining rhetoric. It’s still something that has to be addressed.”
Lost World Series and federal intervention (1994-95)
Almost a decade after MacPhail’s closing argument, the owners still considered the financial state of affairs as something that had to be addressed. Again the owners would try to achieve a salary cap and again the players would resist — this culminating in the fifth players’ strike in league history. But this wasn’t the standard issue stoppage that MLB had grown familiar with during the ’70s and ’80s, when every collective bargaining agreement doubled as a pausing point.
What happened next continues to stand as the longest work stoppage in league history — one that engulfed the 1994 World Series and left MLB without a clear champion for the first time in nearly a century. (John T. Brush, he of the “Classification Plan,” refused to have his team play the American League winner in 1905.)
Books have been written about everything that led to the players’ strike, but the shortest possible version begins with the owners’ radical proposal that June. Not only did they want to install a salary cap, they designed to do away with salary arbitration and overhaul free agency. Players would be eligible to hit the market after four years rather than six, but that generosity came with a caveat that they wouldn’t be arriving to a free, open market.
Instead, the owners wanted the player’s previous team to possess the right of first refusal — essentially mimicking the National Football League’s restricted free agency model that slowed salary growth. “How could the owners believe this is the kind of proposal we could be happy with?” Gene Orza, the union’s associate general counsel, said to the New York Times. The players shared Orza’s disbelief. They voted to authorize a strike in July and then went through with the threat on Aug. 22.
Subsequent proposals and counters would introduce wrinkles (the luxury tax) and tweaks to the revenue sharing agreement. However, the parties were unable to reach an agreement to save the remainder of the season or the entirety of the playoffs. Then-acting commissioner Bud Selig announced in September that the owners had voted 26-2 to cancel the slate of play for the rest of the year.
“You have to look at it as an investment into the future, because we have nothing now,” Twins owner Carl Pohlad said.
That investment wouldn’t pay off — not for some time.
Months passed without a new agreement, leading to increasingly unhinged commentary from baseball personnel. Longtime executive Buzzie Bavasi said in December, “[If] all businesses ran their business like baseball, we’d all be buying Russian war bonds.” Agent Tom Reich one-upped Bavasi a few months later when he said: “All war is going to get is an apocalypse that will swallow everybody.”
Even with those stakes, the salary cap remained a sticking point.
The situation grew so dire ahead of the spring that White Sox owner (and notorious labor hardliner) Jerry Reinsdorf complained about semantics. “If we could only stop calling it a salary cap,” he said. “If we would only stop saying that evil word ‘cap.’ If we could call it sharing — all it does is say we get this and you get that.”
Without a CBA in place, the owners did their best Brush impersonations, imposing a bevy of unilateral changes to the game. They instituted a salary cap. They did away with salary arbitration. They even voted to use replacement players for the 1995 season. (Only two owners objected, including late Orioles steward Peter Angelos.) The strike wouldn’t be resolved until late in the spring. First, the National Labor Relations Board filed a complaint, taking issue with the owners claiming they had made the aforementioned changes as a result of a legal impasse. Then, days later, future Supreme Court Justice Sonia Sotomayor issued an injunction and reinstated the terms of the previous CBA.
MLB’s regular season would begin, with the actual players in place, weeks later, on April 27.
Something caplike this way comes (1997-present)
The romantic notion about the 1994-95 players’ strike is that it caused both sides to put aside their squabbling and prioritize the league’s health. In the aftermath, MLB did enjoy an unprecedented stretch of labor peace. More than a quarter-century passed between the end of the strike and the beginning of the 2021-22 owner-imposed lockout. MLB had previously not enjoyed even 10 consecutive years without some form of work stoppage. (This stretch also included what remain as the only instances of a new CBA being reached before the expiration of the last one.) But the romantic notion, as is so often in this sport, belies the reality of the situation. Just ask some of the involved parties.
“Selig talks about the game has had labor peace, but the guys taking credit for it are the wrong guys,” Orza told ESPN in 2019. “It’s no different than the Germans and the Japanese saying, “We gave you the United Nations. We haven’t had a World War III, it’s great.” Yeah, but we have a United Nations because you lost World War II.”
In the years following the strike, the owners still claimed to be suffering from massive financial losses. MLB put together a four-person panel — former senate majority leader George Mitchell, former Federal Reserve board chairman Paul Volcker, Yale president Richard Levin, and commentator George Will — to study the game’s financial data and offer potential solutions. After a year and a half, the group resurfaced with recommendations that notably did not include a salary cap or alterations to free agency or salary arbitration, each a longtime target for the owners.
Instead, the panel recommended a different approach to revenue sharing — one that prioritized giving more money to the low-revenue clubs — and an aggressive luxury tax to curb runaway spending. The least wealthy would gain more money without having to up their internal revenue while the most wealthy would face friction if they tried to fill their roster with high-paid stars.
Selig, elevated to the commissioner’s seat on a permanent basis in 1998, took notice. It was Selig who convinced the owners in early 2000s to give some of their rights (including, presciently, their internet broadcasting) to the commissioner’s office and it was Selig who prevailed in getting the MLBPA to agree to a luxury tax in the 1997 CBA, despite resistance. (The initial scope penalized only the five highest spending clubs, a group that included present-day fatcats like the Orioles, Guardians, and Marlins.)
It would be reasonable to attribute the tweaks he implemented to revenue sharing and the installation (and subsequent expansion) of a luxury tax as two of, if not the main reasons MLBs owners haven’t waged a prolonged war over a salary cap.
Not that those aforementioned changes came easily. Selig became fixated on messaging the changes as a way of improving competitive balance. (In time, the luxury tax would even be renamed the Competitive Balance Tax, though there is no evidence that cost-control measures actually result in improved parity.) The players, predictably, viewed the competitive balance argument as a new outfit on an old idea.
“The last time we needed a cap because everybody was going broke,” Hall of Fame lefty and union rep Tom Glavine told reporters. “Now we need a huge luxury tax to help competitive balance. Same present, different package.”
Fehr too saw the luxury tax as a de facto salary cap, a mechanism that could achieve the same chilling effect on spending without the weight of those “two dirty words.” The union’s aversion to the salary cap remains in place — MLBPA executive director Tony Clark takes every opportunity to shut down salary cap talk — and that ire for the concept comes honestly. “No legitimate union could ever agree to a salary cap,” union legend Marvin Miller told Sports Illustrated in 2011. “In my mind, if a union did that, it would be grounds for decertification, for membership to go to court.”
In the nearly 30 decades since the luxury tax’s introduction, the concept and the parameters have undergone changes. Whereas the luxury tax initially penalized a defined number of teams, it now falls upon any and all clubs who pass a certain spending threshold. To be sure, the luxury tax isn’t a hard salary cap. Teams are allowed to spend as much as they would like, albeit only if they’re willing to tolerate the increasingly harsh penalties. (The Dodgers paid a tax bill of more than $100 million last year.) But teams have, over the years, treated the luxury tax as something between a soft cap and a guidepost — to the extent that player acquisition strategy is undeniably dictated by a number other than the club’s budget.
It’s become fashionable to wonder if the union should alter its stance, perhaps accept an actual hard cap in return for a salary floor. This, too, is a debate that has taken place before.
Though perhaps lost to the sands of time, the MLBPA rejected a salary floor as part of the 2002 CBA talks. The owners were willing to institute a $40 million floor, but the players thought it unwise to accept such terms. For one, they didn’t want to open themselves up to the obvious trade-off — a cap — and, for another, most clubs were already spending around that level, suggesting the immediate gains would be marginal. (The Baseball Cube’s data shows that only two teams at the time were below $40 million in payroll.)
Sports economist Andrew Zimbalist provided commentary on that decision in a 2010 article for the Journal of Sports Economics, noting that the union may not have accounted for what’s happened since: teams happily not competing in light of guaranteed profitability.
What was perhaps not anticipated by the MLBPA is that the introduction of the revenue-sharing welfare system in baseball would create a new model for success of low-revenue franchises. Basically, if a team received $30 million in sharing transfers and another $30 million from the central fund (from national and international media, sponsorship, and licensing revenues), then by lowballing payroll, such a team could almost guarantee itself an operating profit at season’s end. Indeed, several teams apparently adopted this strategy and lowered payroll into the $14–$30 million range over the ensuing years. The good news was that this option preserved the profitability and financial strength of low-revenue clubs, the bad news is that it did little to provide ownership incentive to produce a winning team or to promote the desideratum of competitive balance.
The CBA dictates that revenue-sharing recipients are supposed to spend a certain amount on their big-league payroll, yet the union has regularly filed grievances accusing some clubs of circumventing that provision. Some of the highest-spending owners have also expressed annoyance with having to subsidize lesser clubs.
“I have been on the record already saying that I would consider supporting a cap, depending on what the cap is and contingent on the fact that there’s also a floor so that clubs that I feel aren’t spending enough money on payroll to improve their team would have to spend more,” Yankees owner Hal Steinbrenner said in February, not quite channeling his father George’s ire on the matter. (George once said of revenue sharing: “I’m a charitable guy, but I don’t like the idea of a socialist state.”)
The fights that will be fought next winter between the players and the owners and within each camp are effectively the same fights that have been fought since the sport’s professionalization. What does the future look like? When it comes to a baseball salary cap, you don’t need a time machine to fancy a guess. All you need is an understanding of the sport’s past.
“We had a strike that cost the World Series,” Selig, a self-professed man of history, said on Mo Vaughn’s podcast last summer, “and it was over things that they’re still fighting about.”
Complete sources: “The Brotherhood,” Cleveland Leader, May 26, 1889; “They Sign So Much Paper,” The Indianapolis Journal, November 20, 1889; “The Sporting World,” Cleveland Plain Dealer, July 21, 1889; The Imperfect Diamond by Lee Lowenfish; Baseball in America by Robert Smith; Diamond Mines: Baseball and Labor by Paul D. Staudohar; Lords of the Realm by John Helyar; “‘A Structure To Last Forever’:The Players’ League And The Brotherhood War of 1890,” Ethan Lewis, ethanlewis.org; “The Legacy of the Players’ League: 1890 Chicago Pirates” by Gordon J. Gattie, Society for American Baseball Research; Slide, Kelly, Slide: The Wild Life and Times of Mike King Kelly by Marty Appel; “Is the Base-Ball Player a Chattel?” by John M. Ward, Lippincott’s Magazine (accessed through archive.org); “Salary cap promotes parity — for teams that can understand it” by Dennis Brackin, Star Tribune, June 15, 1989; New York Times archives; Sports Illustrated archives; ESPN.com archives; USA Today archives; The Sporting News archives; Los Angeles Times archives; The Athletic archives; Cot’s Contracts; countless Associated Press reports from Ronald Blum and other authors; The Game: Inside the Secret World of Major League Baseball’s Power Brokers by Jon Pessah; “Reflections on Salary Shares and Salary Caps” by Andrew Zimbalist, Journal of Sports Economics (Feb. 1, 2010); “A Sport Divided: Owners vs. Players” by Mike Phillips, The Miami Herald, April 7, 2002.
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