As part of the next collective bargaining agreement with players, Major League Baseball wants a maximum contract length of five years for free agents who are switching teams while organizations will have the ability to keep their own players for up to six years, calling it a Cornerstone Player Provision.
The potential change to free agency comes as the league addressed reserve clause issues in a Thursday meeting with the MLBPA and would take effect after the 2027 season.
The league's proposal includes raising the minimum salary from $780,000 to $1 million in 2027 for players with at least two years of service time. Any player with zero or one-plus years of service time will receive $1 million if they receive a full year of service, which includes $900,000 minimum salary plus an automatic $100,000 bonus from the Pre-Arbitration Bonus Pool. The increase in the minimum is the largest year-over-year increase in MLB history, according to league data. Minimums would increase in future years along with the payroll floor and ceiling.
Additionally, players who reach five years of service time by age 30 would become eligible for free agency, a provision the union first put forth recently as part of its own CBA proposal. Currently, players of any age need six years of service time before becoming a free agent. That system has been in place since the advent of free agency in MLB in 1976.
The league also proposed eliminating deferred contracts as well as the qualifying offer but didn't ask for any changes to its arbitration system.
The proposals all come under the umbrella of a salary cap system that the league previously put forth to the MLBPA. In the new system, free agents who are switching teams can sign only for up to five years and a maximum of 15% of the team's payroll, with 5% increases every year of the contract. Using the Cornerstone Player Provision, a team can sign its own player for up to six years.
A free agent moving teams this upcoming offseason could sign a maximum contract of five years, $202 million. A team retaining its own free agent could sign him for six years at $265 million. Maximum contract length applies to free agent years only. For example, a player with less than a year of service can sign with his own team for up to 12 years -- the six before free agency and the six after. If the contract began in 2027, he could sign for 12 years, $500 million.
The new contract lengths are in line with those in the other professional sports leagues that operate under a salary cap. The league has initially proposed a salary floor of $171.2 million and a ceiling of $245.3 million per team, beginning in 2027.
The league is also proposing a 30% increase in the pre-arbitration pool, from $50 million to $65 million in 2027, with growth to $75 million by the end of the CBA term. Part of that program would provide a new $100,000 bonus to any player starting the year with fewer than two years of major league service time who receives a full year of service (with less than 50% of the year on the injured list). In 2025, 178 players with less than two years of service would have received a distribution of at least $100,000 from the Pre-Arbitration Pool, according to the league.
The league also wants to expand the Prospect Promotion Incentives program so that eligible players could yield up to two draft selections for their club (one in the domestic draft and one in the proposed international draft). Clubs will receive a PPI selection following the first round of the international draft if an eligible prospect finishes second or third in Rookie of the Year voting or fourth or fifth in Cy Young or MVP voting.
"The biggest issue baseball fans want solved to strengthen the game is fixing the payroll disparity that leaves too many fans without hope of their team competing for a World Series title," MLB spokesperson Glen Caplin said. "Every other major U.S. sport has tackled this problem, and every year more small-market teams in those leagues have a chance to win. The salary cap and floor proposal levels the playing field, allowing us greater flexibility to address longstanding player priorities while sharing baseball revenue with the players 50/50.
"Today, in addition to proposing the largest-ever increase in the minimum salary, earned by over half of MLB players, we accepted two landmark changes to free agency that have been in place for 50 years. We agreed to both the MLBPA's proposal to provide earlier access to free agency, and their proposal to eliminate the qualifying offer system, a provision players view as a drag on free agency. We also proposed to eliminate deferred compensation and to create a new 'Cornerstone Player' provision similar to the NBA's 'Bird rights' to give every team a fair shot at retaining their fans' favorite star players. We will continue working with the MLBPA during the bargaining process to improve the game for teams, players and fans."
The MLBPA has pushed back on operating with a hard salary cap and floor, putting forth its own proposal that continues the current system of taxing teams that go over a payroll threshold. Additionally, it has never been in favor of a maximum number of years on the length of a contract. Its own proposal expands player compensation while allowing players to sign without a max on years or compensation.
"After making a series of proposals to reduce player compensation by billions of dollars, eliminate fundamental rights with a salary cap, and destroy the amateur entry process, Major League Baseball and team owners are now attempting to distract from the true impact their plan would have on baseball," a statement from the MLBPA said. "These misleading offers are designed to look like 'improvements' but are of little or no value, given they are expressly conditioned on agreement to the league's cap system which eliminates the free market, and ensures gains for one player only come at the expense of another. The league also introduced a litany of additional restrictions on player rights -- limiting salaries, contract length, performance, award, and signing bonuses. While MLB claims to be acting in the interest of fans, their proposals thus far are entirely consistent with owners' long-held goals: suppressing player salaries and maximizing club profits.
"Owners' attempts to pit players against players are nothing new, but they've failed in the past and will fail again now, because PA members remain unified. We are committed to achieving a fair deal that protects the rights of all players, promotes competition, and leaves our game better for future generations."
The union has yet to formally reject a system that features a salary cap, but MLBPA interim executive director Bruce Meyer all but indicated in an afternoon call with reporters that that would soon be the case. It means the proposals set forth by the league Thursday -- all under a capped system -- had little impact on players.
"To the extent that they made some proposals which they're portraying as really beneficial for players [they're] expressly conditioned on agreement to the cap system," Meyer said. "In a cap system, it's zero-sum game. So it's literally just moving money around."
Meyer went as far as to say the league did the union a "favor" with its proposals for the next CBA, which came in three parts. First, the league introduced a capped system, then it offered major changes to the amateur drafting process -- including instituting an international draft -- then came the reserve clause proposals Thursday.
"I have never seen this degree of unity at this point among agents and players," Meyer said. "I think the league has done us a favor because their proposals are in fact so obviously and extremely bad for players at all levels that it's actually been a benefit for our unity."
Meyer believes the sides will meet again before the All-Star break after experiencing "rigorous" debate Thursday, but with the league's and union's desires to negotiate under two different economic systems, progress seems remote.
"They can propose a lot of things that are just going to have the net result of moving money around," Meyer reiterated. "That's not our objective. Our objective is to benefit players at all levels. So that's why these things, like some of the things they're proposing today in that kind of system, they don't have the same meaning as in a system without a cap.
"Anybody who's banking on major league baseball players cracking, it's never happened. It's not going to happen."