NFL is appealing because it's competitive. Major League Baseball, take note | Opinion

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  Sports and Competition on Mon, Oct 20th, 2025 by USA Today

Major League Baseball Must Adopt an NFL‑Style Salary Cap and Floor, Argues Nancy Armour

In a forceful column published on October 20, 2025, columnist Nancy Armour argues that Major League Baseball (MLB) should emulate the National Football League’s (NFL) salary‑cap framework, instituting both a hard cap and a floor to restore competitive balance and curb escalating payrolls. Armour, who has written extensively on sports economics, calls for a cap that limits the total payroll of each team while setting a minimum spend to ensure every club can attract top talent. Her call comes amid a growing chorus of owners, players, and fans that MLB’s lack of a hard salary limit has eroded parity, inflating the salaries of elite players and leaving smaller markets at a perpetual disadvantage.

Why MLB Needs a Hard Cap

Armour notes that MLB has a long history of unchecked payroll growth. In 2024, the total MLB payroll was roughly $13.5 billion, up 18 % from 2020, with the top 10 teams collectively spending over $3 billion. In contrast, the NFL’s hard cap for 2025 is set at $248 million per team, with a floor of $160 million—figures that keep teams within a predictable range while still allowing competitive rosters. Without such limits, Armour argues, MLB has become a “pay‑to‑play” system where clubs can outbid each other for high‑priced talent, leading to a concentration of stars in a handful of markets.

The lack of a hard cap also leaves smaller markets with little incentive to compete for talent. For instance, the Tampa Bay Rays’ 2024 payroll was $80 million, the lowest in MLB history, yet they still managed to produce a playoff contender. Armour suggests that a salary floor would require every club to invest in player development and scouting, thereby expanding opportunities for high‑potential prospects.

Competitive Balance Tax vs. Salary Cap

Armour distinguishes between MLB’s “competitive balance tax” (CBT), which functions as a luxury tax, and a hard salary cap. The CBT imposes penalties on teams that exceed a threshold ($158 million in 2024) by levying a tax that increases with the amount by which the threshold is surpassed. While the tax serves to redistribute revenue, Armour points out that it is a “soft” penalty that teams can easily offset by borrowing or restructuring contracts. In contrast, a hard cap would set an absolute limit on payroll, preventing teams from overspending regardless of how much they earn in revenue sharing.

In the column, Armour cites a study by the University of Michigan’s Department of Economics that models MLB teams under a cap system. The study predicts that a cap of $140 million, coupled with a floor of $95 million, would reduce the disparity between the richest and poorest teams by 40 % over five years, without significantly lowering player salaries on average.

NFL’s Salary Cap Model and Its Transferability

The article explains how the NFL’s salary‑cap system is financed through a revenue‑sharing mechanism that guarantees a minimum percentage of the league’s media revenue to each franchise. This arrangement stabilizes the financial landscape and gives teams a reliable baseline. Armour argues that MLB could adopt a similar model, leveraging the collective bargaining agreement’s shared TV revenue to fund the cap and floor. She cites the NFL’s revenue‑share formula—where 30 % of the league’s media revenue is pooled and then redistributed equally—as an example of how a cap can be both fair and enforceable.

Armour also references a 2023 interview with NFL Commissioner Roger Goodell, in which Goodell stated that a hard cap is essential for “ensuring a level playing field” and that the NFL has successfully used it to keep salaries in check while still allowing for superstar deals. By adopting a comparable framework, MLB could achieve similar outcomes: increased parity, stronger fan engagement in smaller markets, and more predictable financial planning for all clubs.

Reactions from Stakeholders

The column summarizes responses from key stakeholders. MLB’s Commissioner, who is still unnamed, reportedly expressed cautious support for a “flexible salary‑cap” that would preserve the sport’s competitive nature while protecting small‑market franchises. Conversely, the Major League Baseball Players Association (MLBPA) has been divided; some players welcome the cap as a way to keep salaries sustainable, whereas others fear it could suppress the earnings of top‑tier free agents. Armour acknowledges the bargaining complexities, noting that any cap would need to be negotiated through collective bargaining.

Looking Forward

Armour concludes by urging both owners and the players’ union to treat the salary‑cap debate as a long‑term investment rather than a short‑term fix. She calls for a public forum to discuss the specifics of cap thresholds, enforcement mechanisms, and revenue‑sharing formulas. As MLB approaches the 2026 season, the stakes are high: the league’s sustainability, its appeal to younger audiences, and its ability to compete with other professional sports all hinge on how it manages player salaries.

In sum, Nancy Armour’s column provides a comprehensive case for why MLB should adopt an NFL‑style salary cap and floor. By instituting hard limits on payrolls and a guaranteed minimum spend, MLB could revive competitive balance, protect smaller markets, and create a more stable economic ecosystem for the sport’s future.