Major League Soccer commissioner Don Garber announced Thursday the league will expand from 26 to 28 teams, with franchise fees now exceeding $500 million—nearly double the $325 million Charlotte FC paid in 2019. The application window opens immediately, with prospective ownership groups required to submit formal bids by an undisclosed deadline expected to fall in late 2025.

The move arrives as MLS secondary-market valuations climb past $700 million for established franchises. LAFC, valued at approximately $1 billion in private conversations, sets the high-water mark. Atlanta United, Nashville SC, and Austin FC—all post-2017 expansions—trade internally at multiples Garber's office considers sustainable for new entrants in Phoenix, Las Vegas, and San Diego, the three cities openly positioning for slots.

The fee structure matters because it resets the floor for existing owners. Each expansion payment flows to the league's 26 current teams as a distribution, effectively a tax-free capital event that doesn't appear on the salary-cap ledger. A $500 million entry splits $19.2 million per existing franchise. Charlotte and St. Louis, the two most recent additions, paid a combined $650 million; those checks already cleared. The new entrants writing $500 million tickets won't receive distributions from future expansions under the league's current operating agreement, which sunsets in 2027.

Phoenix remains the cleanest bid. The market ranks 11th nationally by metro population, carries no MLS footprint, and benefits from a downtown stadium site already zoned and shovel-ready. Alex Meruelo, former Arizona Coyotes owner, reportedly leads a local consortium that includes Walton family office capital. Las Vegas entered the conversation after the Oakland Athletics stadium deal clarified public appetite for sports infrastructure spending. The Vegas bid involves a privately financed venue near Allegiant Stadium, though the ownership structure remains undisclosed. San Diego's application hinges on Snapdragon Stadium, the 35,000-seat facility opened in 2022 that already hosts NWSL's San Diego Wave. The stadium operator, SDSU Mission Valley, has signaled openness to dual tenancy if the ownership group—reportedly anchored by Southern California real estate principals—satisfies MLS's net-worth thresholds.

Apple's 10-year, $2.5 billion broadcast deal, signed in 2022, includes expansion triggers. Each new team adds inventory to MLS Season Pass, the league's direct-to-consumer streaming product. Apple receives incremental subscription revenue; MLS receives incremental rights fees indexed to team count. The precise per-team adjustment remains confidential, but league executives have indicated the marginal value per franchise sits near $15 million annually once local broadcast windows close in 2025. That figure underwrites the expansion math: a $500 million fee, amortized over a 10-year hold at a 6 percent cost of capital, requires roughly $70 million in annual enterprise value creation. Gate revenue, sponsorship, and Apple's per-team bump supply the return.

Garber's timeline suggests announcements in 2026, with teams joining for the 2028 or 2029 season. That cadence aligns with the league's labor agreement, which expires after the 2027 campaign. The players' association will negotiate expansion-draft mechanics and roster rules during the next CBA cycle. Existing teams prefer a shallow draft pool—five unprotected players per club—to minimize roster disruption. Expansion franchises prefer deeper pools and additional international roster slots, which the league has quietly increased from eight to nine per team since 2023.

Watch Phoenix and Las Vegas to formalize stadium announcements within 90 days. San Diego's bid depends on whether the Wave's owners, led by Ron Burkle, participate in or block a men's team at Snapdragon. Garber meets with Apple executives in Cupertino next month to model subscriber growth under a 28-team structure.

The league hasn't confirmed whether it will stop at 28 or continue to 30 or 32 teams. Sacramento and Detroit, both eliminated in prior rounds, remain interested if a third expansion window opens. The arithmetic works if franchise fees hold above $500 million.