MLB Faces a Defining Labor Showdown - and the Royals Are Watching Closely
As the 2026 MLB season gears up, there’s more than just pennant races and breakout stars on the horizon. Behind the scenes, a high-stakes labor showdown is brewing - one that could reshape the financial structure of the sport for years to come.
The league’s current collective bargaining agreement (CBA) is set to expire on December 1, and the clock is ticking. At the heart of the looming negotiations between Major League Baseball and the MLB Players Association (MLBPA) is a familiar - and contentious - idea: a salary cap.
A Financial Fault Line
The concept of a salary cap has long been a nonstarter for players, but it’s gaining traction among MLB owners. Multiple reports suggest that a growing number of team owners are pushing for a capped system, citing concerns about competitive balance and escalating payrolls. On the other side, the players’ union remains firmly opposed, arguing that a cap would stifle player earnings and limit the free-market dynamics that have defined baseball for generations.
Kansas City Royals owner John Sherman, who serves on MLB’s labor policy committee, offered a glimpse into the league’s mindset during a recent appearance at Royals Rally. While he emphasized his focus on the 2026 season, Sherman acknowledged the mounting pressure from fans who feel the playing field isn’t level.
“We are hearing from a lot of fans as it relates to competitive balance,” Sherman said. “We are never going to use that as an excuse. We are going to compete under these rules, but we are certainly getting a lot of feedback.”
That feedback has only grown louder this offseason, especially after the Los Angeles Dodgers made another splashy move by signing Kyle Tucker to a big-money deal. It was the kind of headline-grabbing transaction that reignites the small-market vs. big-market debate - and underscores the widening financial gap across the league.
The Royals’ Reality
For a team like the Royals, the idea of a salary cap isn’t just a philosophical debate - it’s a potential game-changer. Kansas City doesn’t have the financial muscle of a team like the Dodgers or Yankees. A cap system, much like those in the NFL, NBA, and NHL, could in theory level the playing field by limiting how much teams can spend and encouraging more parity.
Sherman pointed to those other leagues, where revenue sharing between owners and players is baked into the system.
“They have a revenue share with their players, where they’re motivated to grow the game together,” Sherman said. “And that’s something we don’t have in our structure.”
Baseball has never operated under a salary cap. The idea has been floated before - going back decades - but has never made it across the finish line.
The current system allows high-revenue teams to spend freely, while others are left to navigate the margins. That disparity is becoming harder to ignore.
Some teams, like the Dodgers and Mets, are fueled by massive TV deals and local advertising revenue. Others, like the Royals, are grappling with a changing media landscape.
Kansas City recently exited its deal with FanDuel Sports Network and is now moving its broadcasts under MLB’s production umbrella via Royals.TV. While that shift could result in a financial hit, the league is expected to help offset the loss through streaming subscriptions and distribution fees.
Still, the broader challenge remains: how to compete in a system where the financial deck often feels stacked.
Players Push Back
While owners may see a salary cap as a path to balance, the MLBPA sees it as a threat. Union executive director Tony Clark didn’t mince words when addressing the issue at the 2025 All-Star Game in Atlanta.
“Institutionalized collusion, that’s what a salary cap is,” Clark said. “A cap is not about a partnership.
A cap isn’t about growing the game. A cap is about franchise values and profits.”
Clark went on to say that a cap system would pit players against one another, limiting guaranteed contracts and undermining the very notion of rewarding excellence.
“It doesn’t reward excellence. It undermines it, from an organizational standpoint,” he said.
“That’s why this is not about competitive balance. It’s not about fair versus not fair.”
The tension isn’t just theoretical. Last season, Phillies star Bryce Harper reportedly confronted MLB commissioner Rob Manfred over the issue, signaling just how personal and heated this debate has become for players.
And it’s not just a cap that’s on the table. Some owners have floated the idea of a salary floor - a minimum spending threshold - which could also impact how teams build rosters and distribute payroll. But whether it’s a cap or a floor, many players are wary of any system that curtails their earning potential.
What Comes Next
With the CBA deadline looming, the possibility of a lockout is very real. Both sides are expected to begin negotiations during the 2026 season, but the gap between them is wide - and growing.
Sherman, for his part, remains hopeful that productive discussions are on the horizon.
“What is all around that, in terms of the spending restraints ... I don’t know,” he said.
“I think that will come through the negotiations. But I look forward to those discussions starting here at some point during the 2026 season.”
For now, the battle lines are drawn. The 2026 season may be just getting underway, but the real drama could be unfolding off the field - in boardrooms and bargaining sessions that will shape the future of Major League Baseball.