NEW YORK \u2014 MLB team owners are still going full bore after a hard salary cap in labor talks with the MLB Players Association, as league commissioner Rob Manfred said the sport\u2019s existing luxury tax has \u201cfailed.\u201d<\/p>\n
Marking some of his most direct comments on the subject, Manfred said that more than two decades\u2019 worth of attempts to make the tax an engine for greater competitive and economic balance have been increasingly ineffective.<\/p>\n
\u201cWe have tried mightily over several rounds of bargaining to use a competitive balance tax to address competitive concerns, and sometimes you\u2019ve got to admit you failed,\u201d Manfred said as the league is holding an owners\u2019 meeting this week here.\u00a0<\/p>\n
To that end, a record nine teams paid luxury-tax penalties following the 2024 and 2025 seasons. The Dodgers by themselves paid $169.4 million in the tax last year.\u00a0<\/p>\n
\u201cWhen you see more and more tax getting paid, you realize that is not the kind of speed bump that would help on the issue of competitive balance,\u201d he said.<\/p>\n
Labor Dynamics<\/p>\n
Manfred\u2019s remarks also arrive as the league and union remain squarely at odds<\/a> after each side presented its initial proposal last week. The players are seeking a broad expansion<\/a> of the current market-based economic system, including enhanced provisions for free agency and arbitration and a significant increase in minimum salaries.<\/p>\n Management responded a day later with its hard salary cap proposal<\/a>, topping at $245.3 million per game in 2027. MLBPA interim executive director Bruce Meyer said on Monday that under the cap system, players would collectively lose at least $500 million annually<\/a> from reduced compensation. Manfred, however, took direct aim at that assertion.<\/p>\n \u201cOur initial proposal was specifically constructed to ensure that in the first year of the contract, major league players would make more than they made in 2026,\u201d Manfred said. \u201cTo the extent that somebody is suggesting something other than that, it\u2019s just not accurate.\u201d<\/p>\n