For more than 50 years, Major League Baseball has sought to join the rest of the North American big league professional sports leagues by instituting a salary cap. Here’s how to resolve the problem without putting one in place.

First off, let’s get something out of the way: ideas are easier than implementing them. My suggestions are fraught with political landmines that have vexed commissioners dating back to Bowie Kuhn, when the MLBPA gained a hold in the 1960s. Still, it’s worth looking at the issues at hand, given that, while not mentioned directly, there has been considerable noise about implementing a salary cap in Major League Baseball ahead of the current labor deal expiring in December of 2026.

Let’s start with some core facts: there is economic disparity amongst the 30 clubs. This is nothing new, nor something that will always exist. Large markets with storied franchises will always have larger revenues than smaller markets. From the players’ perspective, their view on this is that it is not a problem for them to solve.

Fixing MLB’s Economic Disparity Problem Without A Salary Cap

To start, a dramatic shift from the current Luxury Tax system is not needed. If there are concerns about free-spending owners, then the solution is to continue to tweak the Luxury Tax system. There have been many changes made over the years, and in almost all of the cases, increasing the penalties and creating new surcharges have been part of that equation.

With the Luxury Tax system, clubs over a particular threshold, as well as in multiple years, and by how much, have created penalties paid by these clubs that now see a larger percentage of them funneling back to the clubs as a form of revenue sharing.

And it’s increased revenue sharing that should become the focus, and enforcing clubs at the bottom that receive revenue sharing to use it by means of a Luxury Tax in reverse.

Let’s start with the latter. While a hard floor has been floated by the MLBPA but rejected by the owners unless it was tied to a salary cap, in the model I’d propose, a system that is similar to the Luxury Tax thresholds at the top would be created for clubs at the bottom. Calculating centralized revenues and how much is shared with a club, a threshold would be set at the bottom that clubs would need to spend above. Clubs could go below this threshold but be penalized in some fashion. And like the system currently at the top, those penalties would increase if done in multiple years, or by the amount below the floor threshold as a surcharge.

If there’s a loophole here, it’s that clubs have used the excuse that investing in drafting and/or player development is investing in the big league club’s ability to field a competitive team in future years, rather than increasing their MLB player payroll.

Beyond creating a Luxury Tax in reverse, the league needs to increase revenue sharing by increasing centralized revenues. This is always a difficult matter for the commissioner, given that it pits large revenue-making clubs against the small ones – the haves and have-nots.

As one example, there have been discussions about putting all the media rights currently under MLB.TV up for grabs. Clubs like the Yankees, Dodgers, Red Sox, and Cubs are certainly not going to advocate for this, given that they have sustainable and lucrative local media rights that they wish not to share. That is a political quandary for the commissioner that seems not to be of concern for the players. But if the package were to be sold, then the media rights revenues would become centralized across the 30 clubs and increase some level of economic parity.

As to why a cap doesn’t solve the overarching problem, there has yet to be a discussion about implementing a cap around the front office. Capping player salaries doesn’t mean that clubs with more resources can’t hire the best front office personnel, nor stop these clubs from investing in scouting and player development in places like the Dominican Republic and elsewhere around the globe. If this is truly about creating more competitive parity, then these areas create an imbalance. Creating a framework for the levels in these areas has to be considered if this is truly about creating league parity.

The players are not completely free from making adjustments. Contracts are rife with bonus clauses that should not be allowed. A good example of this is bonuses for ranking in the BBWAA awards or making the All-Star game, which has become a matter of manipulating fans through social media to vote for certain players on certain clubs. While players may look more favorably on larger markets, which allows their platform to be elevated in the media and have access to more personal endorsement deals, having these clauses increases the likelihood of players leaning more toward clubs where the odds of hitting these provisions within contracts increase. In the model I’d propose, award-based bonuses would be dropped. If a player is a true star, then working personal endorsement deals should be something that the MLBPA can help grow and foster, regardless of the market a player plays in.

Finally, there is this: there is no panacea for creating a socialist model in which all clubs have the same resources and the same player payrolls. And even if they did, there would still be clubs with an advantage simply based on size, which gives players a greater platform. For the health of the game, diverging too far from the system already in place seems unwise. A cap system in baseball would act entirely differently from other sports simply due to the game’s design. Rarely – if ever – does one player move the performance needle like basketball or football, where a top skill player can control game outcome. Baseball requires solid roster construction from top to bottom. For the sake of fans and the overall health of the game, let's hope that any potential lockout doesn’t drag into missing regular-season games. A push for a cap will assuredly place them in jeopardy.