The World Series between the Dodgers and Blue Jays is reigniting the biggest debate in baseball: the payroll gap. With the richest and fifth-richest teams squaring off in the Fall Classic, many MLB owners and some analysts will argue that the 2025 World Series is more evidence supporting the need for a salary cap. Before evaluating if this solution is viable, let’s step back and look at the economic landscape of baseball.

It’s impossible to ignore that baseball is the best microcosm for the modern American economy among all professional sports leagues. The gap between rich and poor teams has skyrocketed. Players are seeking higher minimum salaries in the next Collective Bargaining Agreement (CBA), which is up for negotiation in 2027. However, the most significant difference is that baseball has remained primarily in a free-market economy, while the United States has evolved to a mixed market. Player values (salaries) are based on supply and demand and competition (performance). Young players are under team control based on service time. And, most importantly, teams are profit-motivated. Rich teams spend loads of money to get fans in seats, and poor teams spend the minimum needed to field a team while pocketing the profits — if not through attendance than TV monies and revenue sharing.

Baseball hints at a mixed market economy through the luxury tax. Still, it could benefit from fully adopting this system by implementing rules to regulate fair competition and align the game more closely with modern spending and revenue structures. This foundational understanding of baseball economics explains why a salary cap and floor, which would more closely resemble a socialist economy, aren’t the best solutions.

So what other initiatives would progress baseball’s maturity?

Discourage franchise monopolies
One of the few things the NBA has done right is instituting aprons, or levels of salary cap thresholds that enforce financial and strategic consequences for overspending. The first apron is set with a lower cap and induces milder restrictions than the second apron. For MLB to adopt this system effectively, aprons would be stacked on top of the current luxury tax system, which is hardly an impediment for teams with owners who write endless checks.

Below is a rough proposal for how aprons may be incorporated in MLB:

First Apron — Enforced at the first luxury tax surcharge level:

Second Apron — Enforced at the second luxury tax surcharge level:

Implementing aprons strikes a balance between preserving and promoting the value of minor league prospect development and preventing rich teams from monopolizing talent.

Introduce market failure corrections
In the same vein of deterring financial domination, MLB needs to provide incentives for good owner behavior. The real problem with baseball is that owners have no motivation to run a successful team. Each owner is committed to delivering a winning product when they purchase the team, but many don’t take this responsibility seriously.

To hold owners accountable for their role leading the franchise, MLB may limit spending on non-player and staffing activities and cut off profit. Below are some examples.

Inequity has been a long-standing problem that has caused enough commotion to spur action. To avoid a major lockout in 2027, please, Rob Manfred, adapt baseball’s economics to the modern era.