MLS Expansion Fees
How each new MLS team paying $200 million to join immediately makes every existing franchise worth more — a perpetual wealth transfer from future to current owners.
Major League Soccer expanded from 10 teams in 2000 to 14 teams by 2015. Each expansion team paid 200 million to join. Existing teams franchises immediately became worth more. A team worth 200 million yesterday is worth 300 million today. The expansion fee becomes a value transfer from new to old teams. The league didn't increase in quality. Television contracts and sponsorships divided among more teams diluted revenue, yet the value increased because scarcity increased. There are only so many US cities supporting MLS franchises. When there were 10 teams, every mid-sized city hoped to get one. When there were 30, the bar was set. Membership scarcity created value. Apple did the same with the Mac.
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