MLS commissioner Don Garber confirmed the league is advancing with two new expansion franchises, marking the first club sales since St. Louis City SC entered at a $200M fee in 2019 and played its inaugural season in 2023. Multiple ownership groups are competing in a structured bidding process, with franchise valuations now expected to clear $500M per club—a 54% premium over Charlotte FC's $325M entry price paid in 2020.
The league currently operates 30 teams after adding St. Louis and will reach its previously stated cap of 32 clubs with the two new entrants. Garber did not announce target cities but recent market analysis points to Las Vegas and Phoenix as front-runners, both sunbelt metros with existing lower-division clubs and billionaire-backed stadium proposals. Las Vegas has been public about its interest since 2021, when Renaissance Companies chairman Bill Foley—who owns the NHL's Golden Knights—began site surveys near the Strip. Phoenix has USL Championship's Rising FC, owned by Berke Bakay, who commissioned a $300M stadium feasibility study last year that remains unpublished.
The $500M threshold reflects three structural shifts. First, Apple's $2.5B ten-year broadcast deal, announced in 2022, provides stable per-club revenue of roughly $7M annually before performance bonuses. Second, expansion clubs now enter with full revenue-sharing rights from day one, a change from pre-2020 when new teams faced phased shares over five years. Third, MLS team valuations climbed 48% between 2019 and 2023 according to Sportico's annual rankings, driven by Charlotte's attendance—averaging 35,547 per match in its first season, the highest figure for any expansion club in league history. Charlotte's success demonstrated that southern markets with no direct MLS competition can generate eight-figure sponsorship deals; the club signed a $120M naming rights package with Bank of America before playing a game.
For ownership groups, the pitch is capital efficiency. The $500M entry fee buys a franchise in a league where the median club now generates $60M in annual revenue, according to 2023 figures disclosed in investor calls. Charlotte's operating income hit $12M in year one, unusual for an expansion club typically carrying heavy stadium debt. Las Vegas benefits from conventions infrastructure and a 42M annual visitor base; Phoenix sits in the 11th-largest U.S. metro with 5M residents and no winter sports competition from November through February.
The bidding process creates quiet pressure on legacy owners. Several clubs—Columbus, Colorado, Houston—have deferred stadium renovations or training facility upgrades, banking on expansion fees flowing into league coffers. MLS distributes a portion of each fee to existing teams, structured as a one-time payment. When Charlotte entered, each of the then-27 clubs received roughly $12M. At $500M per franchise, the 30 existing teams would split approximately $1B, or $33M each, enough to fund a partial stadium refresh or buy out an underperforming coach's contract without touching operating budgets.
Sponsor implications are geographic. If Las Vegas enters, Caesars and MGM—both current MLS partners at club level—will face questions about exclusivity. Phoenix brings Gila River Resorts, already a partner with Rising FC, into the major-league conversation. Apparel is settled; Adidas holds MLS kit rights through 2030, and new clubs enter under the master agreement with standard $3M annual minimums.
Garber's timeline is deliberate. The league wants clubs operational by 2027 or 2028, which requires stadium groundbreaking by mid-2025. Las Vegas has site control near Cashman Field; Phoenix Rising's Bakay has proposed a location in Tempe adjacent to Arizona State's campus, though that plan requires city council zoning approval expected this summer. The bid window likely closes in Q4 2024, with announcements in early 2025.
Watch for two events. First, whether any bidding group includes a sovereign wealth fund or Middle Eastern family office, which would mark the first non-North American institutional capital at the ownership level in MLS. Second, how the league structures expansion draft rules; Charlotte was allowed to select one player from each existing team's unprotected roster, a format that cost Atlanta United midfielder Jurgen Damm and gave Charlotte immediate depth. If the next two clubs receive similar drafts, expect winter movement as teams protect their academies.
The takeaway
**$500M** expansion fees would net existing clubs **$33M** each, funding deferred capex while locking sunbelt metros before NWSL or USL scalps them.
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