Fans attend a Korea Baseball Organization regular-season game between the home team Doosan Bears and the Samsung Lions at Jamsil Baseball Stadium in Seoul on July 2, 2025. (Image courtesy of Yonhap)
SEOUL, Sept. 26 (Korea Bizwire) — South Korea’s professional baseball league is set for sweeping financial changes after the Korea Baseball Organization (KBO) raised salary caps and relaxed penalties, a move expected to drive up player salaries and intensify free-agent bidding wars.
The KBO board, made up of presidents from the league’s 10 clubs, voted Wednesday to lift the ceiling on team payrolls for the top 40 players, with annual increases of 5 percent beginning next year. By 2028, the cap will rise to 15.9 billion won ($11.6 million), up nearly 50 percent from the 11.4 billion won in place when the competitive balance tax system was introduced in 2023.
The revised rules also introduce an “exempt player” provision: for veterans with more than seven seasons at a single club, only half of their compensation — including salary, signing bonuses and incentives — will count toward the cap. Combined, the adjustments are expected to give teams as much as 20 to 30 billion won in additional payroll flexibility.
At the same time, penalties for exceeding the cap have been eased. Instead of paying a surcharge equal to 50 percent of any overage, clubs will now pay just 30 percent. That change could embolden teams to pursue high-priced free agents and sign franchise stars to long-term contracts.
Industry observers expect the changes to sharply raise average salaries, currently about 160 million won, and fuel an aggressive offseason market. But critics warn the reforms may widen the gap between wealthy and smaller clubs and render the balance tax mechanism effectively meaningless. Calls to abolish the cap altogether had surfaced in earlier debates.
Some executives defended the move, citing record attendance and rising broadcast revenues that have strengthened team finances. Still, the new minimum payroll threshold of 6.1 billion won was dismissed by many as symbolic, as it is far below most clubs’ current spending levels.
“The league is an industry, and if problems arise, we can revisit and adjust the system,” one team president told Yonhap News. “For now, the priority is keeping the game competitive while supporting long-term growth.”
The overhaul sets the stage for what could be one of the most active free-agent markets in KBO history, with teams newly flush with room to spend and fewer constraints holding them back.
Lina Jang (linajang@koreabizwire.com)
