Beyond the Cap: Diverging Interests within the MLBPA
The difficulties posed by differing economic interests within the MLBPA.
The MLBPA has been uniquely successful amongst professional sports unions in terms of resisting a salary cap. The cap has once again become the most prominent issue as we stare down what looks to be a lengthy work stoppage at the end of the current CBA, with the MLBPA predictably taking the position that they will never accept a cap.
However, this overwhelming focus on the binary outcome of cap vs. no cap has shifted focus away from what should be another central question in the next round of the CBA negotiations: Is the MLBPA actually meeting the needs of its player base?
As I describe below, the data shows that the median MLB salary has experienced stagnant wage growth over the last 20 years. Moreover, wage inequality amongst MLB players, which has always been the greatest of any of the main US professional sports leagues, has continued to grow and shift further towards the top earners. This wage stagnation and persistent inequality should create a divergent set of interests in the player base, with top earners having very different goals from the rest of players in terms of what would be a good outcome in changing or preserving the MLB's economic structure.
We can expect to see, and we have already seen, the MLB playing to this set of divergent interests. We also saw some cracks in terms of internal MLBPA cohesion during the last round of CBA negotiations. Moving forward, it is a legitimate question to wonder whether the MLBPA will be able to, and whether the general player base should, maintain cohesion around a collective goal that may not actually be advancing collective interests.
The Economic Classes within the MLBPA
It is no secret that the MLB has historically been the league with the greatest wage inequality between its players. Here I am referring to inequality between how much MLB players make relative to each other, not payroll inequality between teams, which is another frequently studied topic. This 2014 Harvard Sports Analysis Collective piece by Judson Woods and Henry Johnson calculated the Gini coefficient (a measure of income inequality where 1 represents total inequality and 0 represents total equality) for the MLB, NBA, NHL, MLS and NFL. They found that the MLB was the most unequal league with a Gini coefficient above 0.6. For reference, the Gini coefficient of the U.S. is estimated to be around 0.49.
I've run my own analysis on pay disparity within the MLB, but I expanded the analysis to also look at inflation-adjusted amounts for league minimums and median salaries at the starting points for the last four CBAs, including this year. I used Cot's contract dataset to compile the results, and for ease of analysis, only considered salaries as of opening day. As such, the data might not be perfect, but it can paint a general picture of the scenario, and certain aspects, such as the league minimum, are set outside the Cot's data. The Cot's data also includes discounts for deferrals.
What emerges is a stark picture where average players have not experienced significant wage improvements over the last 20 years.
Starting at the bottom of the league with the major league minimum, we see the expected steady growth as bargained for in the CBAs. This is a core part of the MLBPA's function that it is performing for the benefit of those at the bottom of the league in terms of earnings.
MLB Minimum Salary (2007–2026)
| Year | Nominal | Real (2026 $) |
|---|---|---|
| 2007 | $380,000 | $608,000 |
| 2012 | $480,000 | $694,000 |
| 2017 | $535,000 | $725,000 |
| 2022 | $700,000 | $794,000 |
| 2026 | $780,000 | $780,000 |
| % Change (2007–2026) | 105.26% | 28.29% |
The middle class of the MLB is where the trouble lives. In terms of nominal dollar value, the median MLB salary has increased by around $600k since 2007 and has actually decreased in the last 10 years. Adjusting for inflation, the median salary has only increased 9% in twenty years and has decreased since 2012.
MLB Median Salary (2007–2026)
| Year | Nominal | Real (2026 $) |
|---|---|---|
| 2007 | $825,000 | $1,320,000 |
| 2012 | $1,100,000 | $1,590,000 |
| 2017 | $1,710,000 | $2,323,000 |
| 2022 | $1,250,000 | $1,420,000 |
| 2026 | $1,440,000 | $1,440,000 |
| % Change (2007–2026) | 74.55% | 9.09% |
The top of the league shows aggregate growth similar in percentage terms to the minimum salary, albeit with some notable timing differences. Adjusting for inflation, the 95th percentile, which is about 45 players, has increased ~30% since 2007, and the 98th percentile, about 18 players, has increased ~36%. Note that the real dollar value of these contracts peaked 10 years ago, at the start of the 2017 season, and has slightly decreased since then.
95th Percentile MLB Salary (2007–2026)
| Year | Nominal | Real (2026 $) |
|---|---|---|
| 2007 | $11,000,000 | $17,600,000 |
| 2012 | $14,000,000 | $20,200,000 |
| 2017 | $18,775,000 | $25,400,000 |
| 2022 | $19,726,582 | $22,400,000 |
| 2026 | $23,000,000 | $23,000,000 |
| % Change (2007–2026) | 109.09% | 30.68% |
98th Percentile MLB Salary (2007–2026)
| Year | Nominal | Real (2026 $) |
|---|---|---|
| 2007 | $13,300,000 | $21,300,000 |
| 2012 | $19,000,000 | $27,500,000 |
| 2017 | $22,200,000 | $30,100,000 |
| 2022 | $25,700,000 | $29,200,000 |
| 2026 | $29,000,000 | $29,000,000 |
| % Change (2007–2026) | 118.05% | 36.15% |
The max salary shows greater growth than any other category and has steadily increased, showing ~43% growth in real dollar value since 2007.
Max MLB Salary (2007–2026)
| Year | Nominal | Real (2026 $) |
|---|---|---|
| 2007 | $27,000,000 | $43,200,000 |
| 2012 | $30,000,000 | $43,400,000 |
| 2017 | $35,600,000 | $48,200,000 |
| 2022 | $43,300,000 | $49,200,000 |
| 2026 | $61,900,000 | $61,900,000 |
| % Change (2007–2026) | 129.26% | 43.29% |
We can see that the top of the league is clearly experiencing the largest growth. While the minimum has increased, this seemingly positive percentage growth is undercut by the fact that the values of these minimum contracts are so much lower than those at the top end of the league, which have grown even more.
This increasing concentration of income towards the top end is reflected in measures of inequality. The Gini coefficient has risen slightly from 0.62 in 2007 to 0.64 in 2026. Perhaps more telling, the percentage of total payrolls going to players in the top 10% of salaries has increased from 43.8% in 2007 to 47% in 2026.
These figures show a stagnating middle class accompanied by a very healthy elite group of players and a steadily rising minimum. The median salary is 6% of the 95th percentile salary, creating a clear divide in terms of these players. We can figure out what has happened to the middle class by looking at service times from the Cot's data and share of payroll associated with service times.
% of MLB Players on Opening Day Rosters by Service Time (2012–2026)
| Year | Pre-Arb (<3 yrs) | Arb-Eligible (3–6 yrs) | Free-Agent Eligible (6+ yrs) |
|---|---|---|---|
| 2012 | 45.3% | 25.8% | 28.9% |
| 2017 | 45.3% | 27.0% | 27.6% |
| 2022 | 46.9% | 28.0% | 25.1% |
| 2026 | 48.4% | 24.9% | 26.7% |
Median Salary of MLB Players on Opening Day Rosters by Service Time (2012–2026)
| Year | Pre-Arb (<3 yrs) | Arb-Eligible (3–6 yrs) | Free-Agent Eligible (6+ yrs) |
|---|---|---|---|
| 2012 | $488,000 | $2,750,000 | $5,500,000 |
| 2017 | $545,000 | $3,575,000 | $9,000,000 |
| 2022 | $710,300 | $2,760,000 | $8,000,000 |
| 2026 | $796,225 | $3,212,500 | $12,000,000 |
% of Total MLB Payroll on Opening Day Rosters by Service Time (2012–2026)
| Year | Pre-Arb (<3 yrs) | Arb-Eligible (3–6 yrs) | Free-Agent Eligible (6+ yrs) |
|---|---|---|---|
| 2012 | 9.5% | 28.6% | 61.9% |
| 2017 | 8.1% | 27.0% | 64.8% |
| 2022 | 9.6% | 26.3% | 64.1% |
| 2026 | 11.1% | 21.5% | 67.5% |
Over the last ten years, the percent of players on opening day rosters has gradually shifted towards pre-arbitration players. These players, who are mainly on renewable contracts and on average make close to the league minimum, made up almost 50% of the player base as of opening day 2026. However, this group of players makes up only 11% of payroll. The share of arbitration-eligible players has remained relatively consistent, but their share of payroll has decreased from 28.6% in 2012 to 21.5% in 2026. This is driven by the fact that the median salaries for these players have increased only moderately since 2012, and has decreased since 2017. The free-agent eligible players are the real winners here, as their share of total players has decreased over time but their share of total payroll has increased.
These figures demonstrate the economics associated with the service time provisions in the CBA and teams' recognition that they can get cheap controllable talent and spend more on the valuable free-agents. They may also reflect a team-friendly arbitration system which is not keeping pace in terms of growth.
As such, we are left with an economically stratified player group with essentially two categories. First, there is a top end made up of the high earners, who have experienced strong income growth. Most in this top end group fit in the free agent category, who make up one quarter of the league but are taking home ~67% of the payroll. Second, there is essentially everybody else. These players make up over 70% of the player group but take roughly 33% of the payroll. This second group has increasingly shifted towards pre-arbitration players, thus eroding the median salary and hollowing out the middle class. This is amplified by limited growth in compensation for arbitration-eligible players. These are the drivers of the stagnating median salary.
The separation between the groups becomes even more severe when you consider that many of the players in the pre-arb and arbitration eligible categories will have short careers and never make it into the free-agent pool. The top earners are those skilled enough to both last in the league for many years and command high earnings. This creates a gulf in terms of potential career earnings between the two tiers of players.
Different Economic Interests
Without going into too much academic literature, there is interesting writing both on divergent interests within one bargaining unit and on the unique nature of professional sports unions in particular. As described in a 2008 article by James Richard Hill and Jason E Taylor, professional sports unions diverge from typical unions in that sports unions are not as focused on reducing wage inequality amongst their members as typical unions. They write: "reaching a consensus on economic issues is more difficult when there is a wider disparity in pay between members," and note that intra-union disputes undermined the NBA union's bargaining in the 1998–1999 NBA lockout. In that lockout, there was public discord between the elite NBA players, who were most impacted by the NBA owners' proposals, and the rank-and-file players. This internal dispute was largely credited with bringing about a settlement on the union side.
The vastly different economic groups within the MLBPA present a starting point for similar tensions in this next round of collective bargaining. The top end of players, which is the minority but also is made up of the stars of the game, have largely benefited under the current system and would be most directly affected by a cap or any mechanism aimed at curtailing the largest contracts. This group is also less affected by reforms aimed at changes to the service time and arbitration system, as, for the most part, these players are past the period in their careers where this will affect them.
The remainder of players is the group behind the stagnating median pay levels. They are not benefitting from the current system. Their interests should be predominantly aligned with changes to the service time requirements and potentially a salary floor. It is possible that a cap in isolation could also have a negative impact on these players. However, this overlooks three material facts. First, based on initial proposals exchanged by the MLB and MLBPA, it appears very likely that any potential salary cap would be accompanied by a salary floor or material changes to service time requirements that could benefit this group. Second, and perhaps most notably, the current system is not working for them. They are not benefitting from the cap-free system to the same extent as the top end of players, and any trade-offs aimed at service time or their specific economic interests may have a net benefit on their position in the league relative to the current situation. Third, most of these players will never reach salary levels at the top end, where the impact of a cap would be strongest.
The MLBPA maintains strong external messaging in terms of cohesion, particularly around the cap. However, there were signs of internal division in the 2022 CBA negotiations. The subcommittee negotiating the CBA, which was largely made up of stars in the top end of earners, voted 8-0 to not ratify the CBA. However, the individual teams voted 26-4, making a total vote of 26-12, to ratify the deal. The recent prior CBAs had been ratified unanimously by the MLBPA. MLB Network's Harold Reynolds described the situation as follows: "[The] young vote that came through and said, 'It's time to play.'" Another MLB Network commentator, Brian Kenny, described it as "stunning" that the players would overrule the negotiating subcommittee. Of course the 2022 CBA didn't involve a cap, but it shows these diverging interests in action.
The Current CBA Negotiations
Both the MLB and the MLBPA seem very aware of the dynamics created by this divergence of economic interests amongst the players. Notably, both sides have proposed some sort of floor on spending, an increase to minimum salaries, shortening time to free agency for players over 30, and accelerated Rule 5 eligibility. Interestingly, the MLBPA has not proposed significant changes to the service time or arbitration eligibility requirements, but it does propose a significant increase to minimum salaries ($1.5 million) and notable changes to the arbitration system that would put a minimum arbitration tender of $3 million and a positive adjustment on past arbitration awards that are used as comparisons for future arbitrations. These seem like a good reform directly targeted at the limited increase in compensation for arbitration-eligible players.
From an MLB perspective, this tactic of offering incentives to the lower tier of players seems like a smart move. Creating a direct wedge between the diverging economic interests within the players could create internal pressure towards approving a deal or could directly affect the result of a ratification vote. As noted above, each team gets a vote on ratifying a CBA on behalf of the MLBPA, and there may be a large group of players who prioritize having improved economic conditions for their relatively short MLB career over union solidarity. One would expect this pressure to only increase as a stoppage persists and these players lose pay.
If the MLB leans into this strategy, for example by accepting the MLBPA's demands on minimum salary and arbitration, the MLBPA may find itself in a difficult position where the majority of the players that it represents favour the proposed deal, even if it contains a cap. The owners may of course face their own internal divisions that complicate these concessions, but I will leave that for another day.