RESOLVING THE LEDGER
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SportsMoney Why The Dodgers Acquiring Tarik Skubal Won’t Change MLB Labor Talks By Barry M. Bloom ,
Forbes contributors publish independent expert analyses and insights. Boomskie on Baseball Follow Author Aug 04, 2026, 03:03pm EDT Aug 04, 2026, 04:44pm EDT --:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Summary Major League Baseball and its players' union are on a collision course for a lockout beginning Dec. 1, regardless of the Dodgers making a trade with the Tigers for top pitcher Tarik Skubal. Owners argue high payrolls, exemplified by the Dodgers' record spending and success, create an unfair fight. However, the union points to lower-payroll competitive teams and the Mets' high spending with poor results, asserting that competitive balance already exists. The current luxury tax fails to curb spending by deep-pocketed owners, making a lockout seem inevitable as negotiations remain stalled.
Major League Baseball and its players’ union are headed for a lockout. And the Tigers trading two-time American League Cy Young Award winner Tarik Skubal to the Dodgers just a few day before the trade deadline does nothing to change that stark fact.
The question is how long the lockout will last into the 2027 season before one side or the other blinks.
The main issue is a salary cap and floor proposed by the owners. It’s a non-starter for the players. It’s the North Star for the owners. As I wrote for the Chicago Sun-Times during the All-Star break, the sides are locked into those positions. Nothing has changed in the weeks since then.
But it’s still early in the negotiations. The current Basic Agreement doesn’t expire until Dec. 1. That’s when the lockout will begin, halting all trades, free-agent signings and offseason business.
The players could strike before then, but they insist that’s not going to happen. If one judges from the pattern the last time this happened during collective bargaining in 2021, the real negotiations didn’t begin until spring training was shut down in 2022.
The two sides reached a deal on March 10, 2022, and the season began a little late that April 7. But none of the 162 games for all 30 clubs were missed. Of course, back then, the salary cap and floor were not on the table.
Bruce Meyer, the new executive director of the Major League Baseball Players’ Association, and Rob Manfred, the MLB Commissioner, both elaborated on their positions in separate question and answer sessions with members of the Baseball Writers’ Association of America. The chats occurred on July 14 in the hours just before the All-Star Game in Philadelphia’s Citizens Bank Park.
“I have an ownership group that’s more united than any time I’ve been in baseball,” said Manfred, who succeeded Bud Selig in 2015 and expects to retire at the end of his current term in 2029.
“Salary caps are a bad offense,” said Meyers, who replaced Tony Clark this past spring after eight years as the union’s general counsel and lead negotiator. “Salary caps prevent teams from doing the things they believe are in the interest of making the team better.”
Both leaders argue for and against that a cap and floor affects competitive balance in the sport.
The system of a luxury tax threshold and tax was first devised in the labor negotiation of 2002 and were meant to stymie the freewheeling spending of that era’s Yankees, who went to the World Series in 1996, 1998, 1999, 2000, 2001 and 2003, winning it all four times during that span. The Yankees always had one of the highest player payrolls during that period and in 2002 it had risen to $134.8 million.
The luxury tax had its desired impact because the Yankees have been to the World Series twice since then winning in 2009 and losing to the Dodgers in 2024.
But baseball owners then began approving the sale of teams like the Dodgers and Mets to hedge fund owners with deep pockets and that changed the equation. The Dodgers were sold to Guggenheim Baseball and Mark Walter after a 2011 bankruptcy auction. The Dodgers weren’t actually bankrupt at the time, but then owner Frank McCourt used the process to keep MLB from seizing the team.
The luxury tax was collectively bargained with a tax utilized to constrain owners from overspending the annual threshold. When owners don’t care about paying the tax, it ceases to be a constraint.
Post deadline, the Dodgers have a player payroll for luxury tax purposes of $431.5 million and are projected to pay a tax penalty of $187.5 million, tops in the MLB in both categories, according to figures provided by Spotrac . The threshold is $244 million. Their tax penalty is actually higher than the total player payrolls of the bottom 13 teams.
The Dodgers winning and the fact they’re trying to three-peat for the first time since the 1998 to 2000 Yankees, is certainly an argument for a salary cap. But their baseball operations is obviously good at what it does.
The Mets under multi-billionaire Steve Cohen are the other side of the coin. The Mets have a player payroll for luxury tax purposes of $363.4 million and a tax bill of $119.5 million, both No. 2 in baseball. They have nothing to show for it and have the second worst record in the National League.
Ten teams in the lower half of baseball’s payroll list are playoff competitive right now with about 50 games to go in the season, including the White Sox at $125.2 million, the Rays at $112.4 million and Cleveland at $89 million.
That feeds the union’s argument that competitive balance is just fine without a cap.
But Manfred has this talking point: “It’s not a fair fight.”
“If you have a high payroll, you’re much more likely to make the playoffs,” he said in Philadelphia. “And if you have a high payroll, your chances of going to each of the successive rounds are massively higher than a low payroll club.”
An example of that is last year’s Brewers, who had the best regular season record in MLB with a 22nd in the ...
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