At the end of July, the owners and Major League Baseball introduced a proposal that included a salary cap and a salary floor. The MLBPA has long been against a salary cap, but it also wouldn't mind a salary floor to make sure owners who don't typically spend are forced to do so every season. 

The problem with the proposal is that the cap would be set at $245.3 million in the proposal, while the floor would be $171.2 million. At first glance, that would be a huge jump in payroll for a team like the Athletics to have to climb to in order to adhere to the proposed rules. 

But the key factor that the owners are hoping fans don't know enough about is how that would actually work, which would make it easier to make promises that this proposal wouldn't actually keep. People are much more familiar with a team's payroll figure than the luxury tax payroll and how that works, and that is what the owners are counting on. 

Here is how it all works, and how the luxury tax payroll would have impacted the A's spending in 2026.

The proposal above would be for a team's luxury tax payroll, not the actual payroll, but what does that mean? The simple version (if there is such a thing) is that the luxury tax payroll accounts for players on the 40-man roster who are in the minors, benefits for players (about $18 million), and some fun minor accounting that varies year to year. 

The biggest difference, especially for the A's here, would be that a team's payroll in a given year is impacted by what each player is making that season. For instance, Brent Rooker made $8 million in 2026 and is set to make $14 million in 2027. Those same increases are felt in the payroll for all of the team's extended players.

The way that the luxury tax looks at those extensions is by taking the average annual value of the contract (not including vesting or club options) and applying that number for each season. For Rooker's five-year, $60 million deal, that would be $12 million applied to each year of the extension for luxury tax purposes. 

The same goes for Tyler Soderstrom (seven years, $86 million), who made $1.428 million this past season with a $12.28 million AAV. Jacob Wilson (seven years, $70 million) made $1.428 million in 2026 as well, but had an AAV of $10 million. Lawrence Butler (seven years, $65.5 million) made $3.428 million in 2026 while having an AAV of $9.357 million.

Those average annual values plus the benefits for the players and everything else that goes into the luxury tax payroll boosted the A's payroll from an estimated $95.42 million per Roster Resource to an estimated $146.652 million in luxury tax payroll in 2026. 

In other words, given the proposal, the A's would have had to spend just under $25 million additional luxury tax dollars to reach that threshold — a much smaller gap to close than one from $95.42 to $171.2 million ($75.78 million). That's roughly a second Luis Severino for the roster.

Of course, going into the offseason, Severino has a $22 million player option that the A's are hoping he picks up, while Jeff McNeil ($15.75 million) and Jeffrey Springs ($15 million) have team options for the A's to consider. If none of them end up coming back, that would save the team some money to spend elsewhere.

While the A's were close to that salary floor with those three, the team finished with one of the worst records in baseball. If the trio were to depart, the club would be able to reallocate some of those funds with the hope of getting more production out of that spending next season.  

The larger point here is that even if the A's signed two players to one-year deals worth around $12.5 million in 2026 to help the pitching staff and meet the salary floor requirement in the proposal, the team still wouldn't have had enough pitching to put the team in contention when the season was over. 

Of course, the A's and other clubs could go well past the $171.2 million proposed salary floor, but they could have been spending the whole time leading up to this labor battle too, so it wouldn't be expected for the lower-payroll teams to start spending much more than is absolutely necessary. 

For many teams like the A's, that would be spending an additional $25 million some years in order to cap player salaries forever.