My Kendall Roy Theory of CBA Negotiations

By EJ Fagan

July 2026

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The following post comes from EJ Fagan's Substack, Baseball Is Life. It is shared with permission.

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I’d rather not think about the Yankees right now, so let’s discuss another fun topic: the ongoing Collective Bargaining Agreement negotiations.

The players and owners have now pretty much finished exchanging their opening offers. The owners have proposed, for the first time since 1995, a salary cap. The players have proposed what is effectively a slightly more player friendly version of the status quo. The two proposed economic systems are so far apart that there’s no real way to meet in the middle. So we’ll sit in a stasis until someone blinks in March.

When the owners initially proposed a salary cap with a 50/50 revenue split, I wrote that I thought that a cap system was looking pretty likely. I’ve changed my opinion. I think the owners are bungling this negotiation and are barreling toward something that looks like the status quo when all is said and done.

Ask yourself: what would the owners need to do to get the players to agree to a salary cap? My answer is pretty simple: they need to get the majority of players who will never make a ton of money in free agency to rebel against their dynastically wealthy colleagues.

These players are mostly making the minimum, or will hit arbitration well into their 30s. Think about someone like Fernando Cruz, a 36 year-old who is making $1.45 million in 2026 after making the league minimum from 2023-2025 and spent over a decade making almost nothing in independent league and minor league ball.

Most MLB players are like Cruz. Their career are short. They will make the minimum for a few years, maybe get one or two years of arbitration, and then start a new career in their 30s. MLB’s economic system directs a massive amount of money to free agents while leaving these guys behind.

Labor unions are democratic institutions. If a majority of members want a salary cap, they will get a salary cap. So the league needs to offer something to those players to attempt to splinter them off from the Aaron Judges and Juan Sotos of the world, who would lose hundreds of millions under a cap system.

So what did MLB offer those players?

• Raising the minimum salary from $780,000 to $1 million.

• $15 million increase in the pre-arbitration bonus pool.

• Free agency after one more year of service time once you hit 30

  
  

That’s it. The minimum salary increase is worth only about $100,000 after inflation. The arbitration pool is a tiny increase to a tiny bucket of money. The free agency thing is tiny. This ain’t going to split the union. It’s insulting, and thus likely strengthens their resolve.

These offers sure look to me like negotiation malpractice. If you start with the premise of a 50/50 revenue split, then teams should barely at all care about how the money is spent. Go hog wild! Propose a $3 million minimum salary or something, with way less service time to free agency and guaranteed free agency at 28 or something. The vast majority of players would benefit from the more egalitarian system. That’s basically how the NHL’s economic system works. The minimum NHL salary is $850,000—higher than MLB’s despite half the revenue. It’s top players get paid about $15 million per year, or 17x the minimum. MLB’s top players get paid about 50x the minimum salary.

Hell, offer the cap and 50/50 revenue split and offer to leave the details of how its spent up to the union. Instead, the owners are offering a few peanuts.

Sure, it’s their first offer. In a normal negotiation, like the contract that my union is negotiating right now, you start far apart and meet in the middle. We know that our first salary offer isn’t going to get accepted, as does our counterparties. We’re positioning to find a midpoint, hoping to nudge that point a little bit toward our side at end of the day.

But you can’t meet in the middle when the sticking point is the overall structure of the economic system. The owners need to get the players cap curious in the first place before getting into a normal negotiation. The union isn’t going to counter-offer a cap framework until it fractures in favor of the have-nots. And the owners aren’t going to significantly sweeten their offer without a counter-offer from the union. Their starting point was just too greedy. As long as the players stick together, owners will have no choice but to accept a CBA that is largely the status quo.

Without going into too much detail, I recently witnessed a very similar CBA negotiation with the sides flipped. The union wanted a significant change from the status quo, essentially doubling their salary. Management wanted a continuation of the status quo with a smaller-than-inflation wage increase. After a short strike, the union members gave in and opted to continue working under their current contract. They lost and will be lucky to walk away with much more than the tiny wage increase that management proposed.

But can’t the owners credibly threaten to cancel the 2027 season if they don’t get what they want? No way. Unlike the 2004-2005 NHL season, when the NHL was deep in the red, MLB is making a ton of money. It’s growing. It has big TV deal ambitions. It wants two new owners to pay them $2 billion each in expansion fees. Losing a season would be enormously costly.

Why are the owners being stupid? Rob Manfred is a labor lawyer who has been negotiating MLB CBAs since the 80s. He’s an able, experienced person. But he works for 30 owners, many of whom are not. While their franchises are worth billions today, most MLB owners purchased their teams (or inherited them from their parents) for much less.

These very much not-titans of business are a bunch of cash-poor billionaire lottery ticket winners. They are more Kendall than Logan. A lot of them struggle with the cash flow needed to sustain hundreds of millions in annual operating expenses. When they take a temporary haircut on their local TV deal or lower-than-expected attendance, they don’t have a lot of assets to borrow against other than their team’s equity. They probably don’t feel like a “real” billionaire. So they direct the competent guy they hired to ask for the moon, even if he objects. It will all probably fail just as hard as all of Kendall Roy’s schemes to take over WaystairRoyCo on Succession.

Or at least that’s my theory. I’m just a procrastinating political scientist. What do I know?