KBO Announces Salary Cap Adjustments, Introduces League-Wide Payroll floor
SEOUL – South Korea’s KBO professional baseball league announced significant revisions to its competitive balance system today, including increases to the upper salary cap and the introduction of a minimum team payroll. the changes, approved by the KBO Board of Directors, aim to address concerns about escalating player salaries and ensure greater financial parity across the league.
The upper limit of the competitive balance tax, often referred to as the “salary cap,” will rise by 5% annually over the next three years, beginning in 2026. Currently set at 13.71 billion won, it will increase to 14.397.23 billion won in 2027, 15.17 billion won in 2027, and 158.294 billion won in 2028.
Alongside the cap increase, the KBO will implement a league-wide payroll floor starting in 2027. This floor is based on the lowest total payroll of any team over the previous two seasons (2023 and 2024), which was determined to be 6,665.38 million won. Each club will be required to maintain at least this minimum payroll amount.
Teams failing to meet the payroll floor will face escalating penalties: 30% of the shortfall for a single instance, 50% for two consecutive years, and 100% for three or more consecutive years below the minimum.
the KBO also revised how multi-year contracts are calculated to prevent circumvention of the competitive balance system, factoring in salary, down payments, and option details. A new “exception athlete” system allows clubs to designate one player with at least seven years of service time, excluding 50% of their salary from the competitive balance calculation.
These changes come as the KBO seeks to maintain competitive balance amidst rising player costs and increased spending by some clubs.
