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MLS Expansion Fees League's Biggest Profit Center

At the time of the MLS All Star Game in Toronto back in July, Commissioner Don Garber announced the intention of the league to expand into two cities by 2009 and announced eight candidates for those two slots. Those eight markets are: Atlanta, Las Vegas, Montreal, a second team in the New York area, Ottawa, Portland, St. Louis and Vancouver.

The owners did not come to a final resolution of the issues surrounding expansion and so no conclusions were reached. There is sentiment for expanding the number of markets from two to four, allowing the league to take in two Canadian cities and still expand into two more American markets. In addition, no conclusion was reached on the expansion fee which the new teams would be expected to pay. The Seattle Sounders and the new franchise in Philadelphia, who begin play in 2009 paid an expansion fee of $30 million this past year, triple the $10 million paid by Toronto FC in 2006. Initially, the fee was set at $40 million but there was significant sentiment in the room to raise it to $50 million. Clearly, expansion fees are the one true profit center in MLS.

Full post as published by Sports Biz on August 12, 2008 (boomark / email).