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It Costs $200m Now For A MLS Expansion Fee

Timbers Army - The heartbeatThe interest in having an MLS franchise is so great that Major League Soccer is plans to nearly double expansion fees to $200 million.

MLS has announced that they want to expand from its current 20 teams to 28. The first two of those clubs will be Atlanta United and the Minnesota franchise who will both join next season.

Then LAFC is set to join in 2018, and the league is hopeful David Beckham’s Miami club will be prepared to start then as well.

That leaves only four potential new franchises and with St. Louis, Sacramento, Detroit, San Diego, San Antonio, Austin, and Cincinnati all interested in franchises, demand is greater than supply. Which is why MLS feels that they can get away with increasing its expansion fee from the $110m that LAFC paid to join the league to $200m.

Interestingly, Forbes in October estimated that only THREE MLS clubs are worth at least $200m. They are the Houston Dynamo ($200m), LA Galaxy 9$240m) and Seattle Sounders ($245m).

What MLS soccer has to be concerned with here is that with the cost of entry so high, why would Austin or Cincinnati not just buy an existing MLS club and relocate it to their city? FC Dallas for example is valued at $148m by Forbes while the Columbus Crew are valued at $122m.

It would make more financial sense for USL side FC Cincinnati to buy the Crew and their existing players for $120-130m instead of having to pay $200m and stock their roster through an expansion draft.