MLB salary cap proposal would centralize local TV revenue, end blackouts
· Yahoo Sports
MLB sent the players’ union a salary cap proposal this week that would, for the first time, classify all local media revenues as central revenue shared equally across all 30 teams.
It is a monumental ask, one that commissioner Rob Manfred has laid the groundwork for over years, and one that big-market owners with lucrative local media deals would almost certainly never agree to without a cap system that makes their payrolls more affordable.
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“Our salary cap and floor proposal levels the playing field while sharing baseball revenue with the players 50-50 as we grow the game together,” MLB chief legal officer Marc Caplin told The Athletic. “Further, by sharing media revenue equally as part of our proposal, we can address another top fan concern of local TV blackouts.”
Manfred has been pushing toward a nationalized local-rights strategy since at least 2024, with 2028 as his target for getting most of the league onto a single platform, and the CBA proposal is the vehicle to get him there.
Getting big-market owners to put their local TV money into a shared pool has been one of the harder sells in baseball for years, and for good reason. The Yankees and Dodgers have among the richest local deals in the sport and have had little incentive to share. But Manfred has been making a specific argument to owners about why centralization is actually in their interest, and it comes down to how franchises get valued when they’re sold.
Speaking at Braves Investor Day last year, Manfred pointed to the gap between how NBA and MLB franchises are valued — NBA teams sell at 10-15 times implied revenue, while MLB teams sell at 4-11 times — and argued that the difference comes down to how much of each league’s revenue is centralized. Predictable central revenue commands a higher multiple from buyers than local revenue, which fluctuates year to year. Put another way, sharing your local TV money might cost you some of it, but it makes the franchise you’re eventually selling worth a lot more.
That argument is easier to make now than it was five years ago because the regional sports network business largely collapsed in the interim. Diamond Sports Group’s bankruptcy wiped out or slashed local TV fees for nearly half the league, and MLB ended up taking over local rights for more than a dozen teams just to keep games on the air. By the time CBA talks got serious, Manfred already controlled enough of the league’s local rights that asking the remaining holdouts to join a central pool was at least a realistic conversation, even if he was still working to convince large-market owners as recently as February.
Manfred needs 23 owners to ratify a new CBA, and just eight can kill it. The owners most willing to share local TV revenue aren’t necessarily the same ones driving the push for a salary cap, and the ones giving up the most in this deal have every reason to hold out for more. David Samson said last year the owners couldn’t get on the same page among themselves, before anyone had even gotten to the players, and the players have spent decades blocking a salary cap because it limits what the best of them can earn.
Ken Rosenthal put the odds of a lockout at 90 percent on the Awful Announcing Podcast, and nothing that happened this week makes that number feel wrong.
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