Philly Front Office

Major League Baseball wants a salary cap and is about to impose a lockout to try and get one. Many fans see this as a step toward competitive fairness and are using caps in the NBA and NFL as their north star on the issue. The reason being that anyone can be competitive in those leagues because the spending is all the same. That reasoning is false. I am not talking about the “anyone can be competitive” part, I mean the “spending is all the same” part. Really, the NHL is the only one even close in comparison, but even that is miles from what MLB is proposing. Here’s how these different systems work.

Note: These are complicated systems for the most part, so I am painting in broad strokes

The NBA Soft Cap

Cap: $165m Floor: $148.5m

The NBA allows teams to exceed its salary cap with the use of “exceptions.” These exceptions include signing your own players, adding minimum salaries, and one time use adds called taxpayer exemptions so a team can sign a player for up to around $15m. If you use the tax payer exemptions or make certain trades, the team gets capped at certain aprons. Theoretically though, a team can spend as much as it wants on its own players, but it comes with serious penalties over around $200m with even more penalties if you are considered a habitual spender over the tax line.

The penalties can get so severe that teams rarely go too far over the tax line too often. For this season, the Phoenix Suns are around $33m over the luxury tax line and are projected to pay around $109m in penalties. The Boston Celtics were staring down a $255m bill in just penalties after winning the title and broke the team up. The highest ever penalty in a single season was $176.88m by the Warriors in 2023.

In terms of total cash being paid this season, here are the highs and lows:

1. Phoenix: $234m

2. New York: $226.4m

3. Denver: $223.5m

9. SIXERS: $210m

28. Chicago: $167.6m

29. Brooklyn: $162.1

30: Memphis: $161.9

The difference is $72m

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The NFL “Hard” Cap

Cap: $301.2m Floor: $268.1¹

On paper, no team is allowed to exceed the NFL salary cap no matter what. This is why the NFL gets all the credit for parody and for their hard cap creating competitive balance. People see this and think they understand it. Well, the hard cap is just a myth. Here’s why:

• Every team’s hard cap is different because unused cap rolls over from the season before.
• As all Eagles fans know, the cap has nothing to do with cash spent, it is purely about accounting. It is complicated, but there are all kinds of ways around the actual cap including option bonuses, signing bonuses, and void years.
• NFL contracts are notoriously reported incorrectly because they are mostly nonguaranteed. Unlike in the other leagues, NFL teams can often just cut players to become cap compliant.

The actual cash spent during the season varies wildly from team to team. Here are the highs and lows as of publication:

1. Dallas: $391.2m

2. Green Bay: $386.3m

3. Seattle: $382.9m

6. EAGLES: $363.2m

30. Minnesota: $300m

31. Los Angeles Chargers: $265.2m²

32: Miami: $247.7m

That’s a $145m difference!

The NHL Actually Hard Cap

Cap: $104m Floor: $76.9m

For the most part, teams cannot exceed the hard salary cap. I say for the most part because there is a credit system in dealing with both short and long term injuries. A Team’s ACTIVE cap must stay below the ceiling, but they can go over due to injuries as long as they return to cap compliant when they are activated. There used to be loopholes in this that would allows teams to bring back injured players for the playoffs to exceed the cap, but that was recently closed.

While NBA and MLB deals are guaranteed for the most part, NHL deals can be bought out for 66 cents on the dollar and paid out over a long period of time.

Even a league with a hard cap like the NHL has a disparity with actual cash spent:

1. Vegas: $148.8m

2. Washington: $134.2m

3. Florida: $134m

25. FLYERS: $112.4m

30. Vancouver: $105.2m

31. Calgary: $104.9m²

32: Detroit: $101.2m

As for cap spending, there is a difference of about $1b, meaning $1b does not count toward the actual cap. However, this includes about $20m per team in minor league spending with the rest being injury and buyout related. Vegas has the highest active cap spend at $114m and Vancouver is the lowest at $68.2m

The MLB Proposal

Proposed Cap 2028: $258.2m Proposed Floor 2028: $180.2m

MLB is proposing a hard cap that guarantees spending with a range of around $78m. This would be a hard cap, but there would probably be extra wrinkles for injuries like the NHL. Would there be an end to deferred money? That has not yet come up in CBA talks, but it seems like that would be the easiest way to get around the high end figure. Most fans probably want that loophole to close though rather than to get exploited.

The numbers MLB has used to get to the cap and floor are based on actual previous year spending and does not consider deferrals. The $78.2m different in cap and floor is enormous though especially when you consider the Dodgers had about $118m in deferred cash just from this season. Part of that was accounted for but not nearly all of it.

Actual cash spends for 2026:

1. New York Yankees: $355.6m

2. New York Mets: $352.5m

3. PHILLIES: $339.9m

28. Athletics: $120m

29. Miami: $110.1

30: Cleveland: $91.1

The Difference

The NFL system has allowed teams to outspend their cap by almost $100m. By the end of the season, 30 of 32 NFL teams will have spent more cash than the max cap. For the NBA, it will be 28 of 30 teams. In the NHL, every single team was within $3m of the cap in actual spending.

For MLB? Only 9 teams would be over the spend in 2026. Assuming a 10% hike for 2 years from now, it only comes to 11 teams. This is NOT the same system. It isn’t even close. MLB teams are looking at that salary floor as the maximum they need to spend in order to be compliant. Teams in other leagues simply do not see it this way.

Maybe this system will eventually level out, but the way the rules are written still create a system of haves and have nots. However, by creating a truly hard cap, the players will NEVER be able to earn more, unlike all the other sports.

1. You could also think of it as $286.1. The rule is that in any given year, a team has to spend 89% of the cap, but they have to spend at least 95% over a rolling 4 year time frame ↩︎
2. If a team does not hit the floor, they must pay the difference to its current players ↩︎
3. If a team does not hit the floor, they must pay the difference to its current players ↩︎

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Sources: Spotrac