The Washington Nationals payroll gets a major reset after this season. All of those non-performing and bad contracts are off the books per the MLB calculation. The Stephen Strasburg deal valued at $35 million is off those books even though the Nats might still be paying him under his retirement agreement.

Where do we believe the Nats payroll will be at? After giving sizeable ‘arb’ raises to CJ Abrams, Jake Irvin, and Jacob Young along with Cade Cavalli‘s $4 million deal, the Nats CBT payroll should be around $79 million. That would increase significantly if minimum payrolls are reset per a new collective bargaining agreement (CBA). This could be a moving number. But based on last year and going with and increase to $1,000,000 as the minimum player salary, we feel confident in that $79 million number.

The Nats are still paying Keibert Ruiz under his long-term contract, and finally that deal looks good for the team. We kept Josiah Gray in the numbers, and of course you can question whether or not Paul Toboni will keep Irvin who will be due a number around $5 million. If Toboni non-tenders Irvin and Gray, that $79 million number will be closer to $75 million.

Ownership knows these numbers. And as mentioned, on cash flow, they are still paying Strasburg, and the Nats will continue to pay Max Scherzer a deferred amount of $15 million, which he will continue to receive annually from the team through 2028. For the next two years, the Nats have some cash flow drain. But they could certainly look at signing free agents and backload some contracts to free up near-term cash flow.

The new CBA will certainly dictate a lot of the future spending — specifically if there is a salary cap ‘floor.’ MLB has proposed a floor of $171.2 million. Certainly there would be a step-up to the spending as teams would have a certain amount of years to get above the cap floor and get below the cap ceiling.

CBA Proposal Overview

• Salary Floor: $171.2 million minimum spending requirement per team (including player benefits).
• Salary Cap: $245.3 million maximum spending limit per team.
• Revenue Split: A 50/50 split of revenues between the owners and the players.

Impact on Teams

• Payroll Reductions: High-spending teams like the Dodgers, Mets, and Yankees would need to lower their payrolls to get under the cap.
• Payroll Increases: Lower-spending small-market teams would be required to increase their spending to meet the $171.2 million floor.

Fixing the Revenue Imbalance

The other part of the CBA would create a system where revenues are divided more equitably and MLB commissioner Rob Manfred wants local TV revenue to be split equally between all teams. That would be a major win for the Washington Nationals because they have never been paid enough in RSN (regional sports network) revenue.

Any increase of the TV money to the Nats would help fund a good chunk of spending. And that is a key here in fixing the revenue imbalance to align much closer to the NFL system that uses that model. Let’s just conservatively say that the Nats get a $30 million a year windfall in TV money. Hopefully that number will be much higher.

Other Revenue

The Nats need to help themselves by selling the lucrative stadium naming rights which should be worth $15 million a year. As spending increases, expect attendance to go up also. Currently, the Nats are 7th from the bottom in league attendance per ESPN at 22,500 per game.

If the Nats could just get back in the short-term to 24,900 in average attendance where they were at in 2011, that would be progress. How can they do that? By changing the narrative and stating that ownership is committed to winning and spending. It would have been smart for ownership to say those words now to encourage season ticket sales for next year and help with sponsorship sales.

Payroll for 2027

How hard would it have been for ownership to state that they are committed to a salary budget increase of at least $50 million for next year? That is what they gave their former-GM for the 2025 season to spend when the team got to a $140 million opening day payroll. This past year they shrunk to approx. $123 million per Cot’s Baseball. That number dropped a few million after the trade deadline.

If the $79 million number is right, just to get back to the $123 million would be an increase of $44 million. Add $6 million more to that to make it $125 million. There is your $50 million. That will get you a good starting pitcher, and a good closer — you would think. Increase it some more, and really go for it.

That number still is not close to the CBA proposed floor of $171.2 million. As good as this team was in mid-July, just think about how much better this team could be in 2027 with some key acquisitions.

Ownership Must do Their Part

While ownership made some very tough decisions in the past 15 months with changing over their front office, coaching staff, player development staff, and business operations, they created two separate President positions for Toboni on the baseball operations side, and for Jason Sinnarajah on the business side.

Everyone must row in the same direction and with the same purpose. While Toboni might think his only job is to improve the product on the field, but he could also help by casting a better image on the team. That becomes the gray area of “not my job.” True. But this has been a problem with the Nationals since they relocated from Montreal that the narratives about this team have been negative. That negativity directly affects attendance. And attendance is still the top revenue driver for this team.

Remember, attendance drives merch sales, F&B sales, parking, and in-stadium sponsorships. Sportico estimates that MLB on average gets 31 percent from attendance with another 10 percent for concessions and parking making it 41 percent of the total. That is the number one driver of revenue.

In recent financial assessments, the Washington Nationals generated roughly $300 million to $314 million in total annual revenue. Known specific figures come from CNBC and Forbes:

• Gate Receipts (Ticket Sales): Estimated at $83 million to $90 million, making up roughly 27 to 30 percent of their total revenue stream.
• Other Channels: The remaining 70%+ is split between the national broadcast distributions, local television media agreements (such as Nationals.TV), stadium sponsorships, jersey patches, and merchandise.

We also did a study on the Nats increasing debt-load. That also has to get chipped away and lowered as CNBC and Forbes both estimated the Nationals are losing money annually after paying interest expense.

The Circular Equation

Successful businesses have a high demand for their product. That is where the Nationals have to get to. Sometimes I wonder if they grasp this concept. While the effort by Sinnarajah is certainly working towards improving the team’s image, the attendance drives everything. The Brewers this year will hit attendance numbers the Nats have never achieved in their winning years. As the chart above showed, even in the winning year the Nationals never reached the Top-10 in MLB in attendance.

The past attendance numbers has always shown poorly for Washington as a baseball town. You cannot survive spending over your revenues. That is a catastrophic business model. A new CBA might save Washington. Right now Washington is bottom-5 in revenue per both CNBC and Forbes modeling.

You create a better image of your product (Part #2) with proof of a good product (Part #1), and attendance will increase through customer loyalty (Part #3). That seems to be obvious. This is always in a circular equation. Make more money to spend more money on the fan experience and the on-field product. That is the “build it and they will come” model.