HOW WILL EXPANSION WORK?
The expected timeline for the expansion process. MLB has not yet started the formal process, but the candidates are jostling for position.
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Unlike the NFL, which selects an expansion city and then finds the owner, MLB encourages prospective owners to bid for franchises and selects them on the strength of their overall package.
There is limited precedent for MLB expansion – there have only been six previous rounds, the most recent of which led to teams beginning play in 1998, when the league and world looked very different. Each previous expansion also took place in a specific context which shaped the way the process worked – in 1993 it was an open race while in 1998 the outcome was largely pre-determined.
Nonetheless, based on past examples and some clues about the way MLB currently sees expansion, these six stages are how any future expansion process is likely to play out.
STAGE 1: INFORMAL PREPARATION
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Before the league expands a series of informal conversations take place between the commissioner, owners, prospective owners and municipal politicians. These are designed to gauge the level of interest amongst all parties for expansion, and what it might take for prospective cities to land a new team if and when it eventually occurs.
This process is already underway. A potential Nashville ownership group has met with the commissioner, as did Montreal’s mayor when the Blue Jays played exhibition games in the city in 2015.[2] [3] In 2020, Commissioner Manfred was scheduled to meet with a group in Portland working to bring baseball to the city, although the trip was cancelled due to social unrest.[4] There will be more discussions happening behind the scenes, with prospective cities and ownership groups jockeying to put themselves in the best position possible when the starting gun is eventually fired.
Some of these discussions will be more structured than others. There are points at which MLB may want to formally meet with potential expansion locations to update them on baseball’s position on adding new teams – as then commissioner Peter Ueberroth did at the 1984 winter meetings, communicating baseball’s reluctance to expand in the near future. And there will be other occasions where potential owners leverage personal relationships to lobby for their cause and pick up information about expansion – as future Diamondbacks owner Jerry Colangelo did, utilising his “insider status” to talk to, in his words “people in baseball…like Jerry Reinsdorf, my old friend and the owner of both the Chicago Bulls and the Chicago White Sox; and Bud Selig, another friend, the owner of the Milwaukee Brewers and at that time the acting commissioner of MLB”.[5] [6] Colangelo’s involvement in bringing baseball to Arizona was in no small part because those conversations communicated that “MLB wanted Phoenix as much as Phoenix wanted MLB”.[7]
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Sometimes, these informal conversations discourage ownership groups from bidding at all. At the outset of the 1998 process, for example, a prospective ownership group from Nashville chose not to bid because they felt it was clear that “the next two franchises are going to Phoenix and Tampa-St. Pete”.[8] On other occasions they give encouragement to outfits that might not have – during the 1993 process the prospective Denver ownership group, which had “no close ties to anyone in the baseball establishment”, was reassured that the league was genuinely interested in their bid.[9]
These conversations are ultimately crucial to picking up on the internal dynamics of the expansion process, which can vary substantially – as a comparison of 1993 and 1998 shows.
Conversations between interested parties is not the only informal preparation for expansion that takes place. The league will also have internal discussions aimed at assessing the broad appetite for expansion amongst the owners, and to assess the impact that adding teams might have on scheduling, divisional alignment and the quality of play. As commissioner Rob Manfred put it in July 2023, "You need to think about what you’re trying to accomplish for the sport from a competitive perspective, and deal with those issues before you get into what market [you award a team to]... And what do I mean by that? If you’re going to go to 32, are you going to make format, divisional changes? What should it look like? So there’s some internal work that’s going to take some time to get done.”[10]
STAGE 2: BEGINNING OF THE FORMAL PROCESS
If the league decides it is serious about expanding it will begin a formal expansion process, providing a roadmap for the addition of new teams. As part of this process, it will nominate an expansion committee made up of a subset of owners or their delegates, probably alongside representation from MLB itself. For the 1993 expansion the committee was four-strong, led by Bill White, the National League President (reflecting that, at that time, expansion was still a league affair). For the 1998 process it had nine members, led by John Harrington, the Boston Red Sox CEO.
It is important to note that simply beginning a formal expansion process does not guarantee that new teams will be added. While in the 1993 process one of the first things the owners did was formally vote in favour of adding new teams, in 1998, this decision was only made at the end of the roadmap. Chairman of the Expansion Committee John Harrington said at the time that: “Rather than voting on expansion in the abstract…we felt it would be better to go through the whole process” before doing so, allowing the owners to make a decision knowing the specific ownership groups being designated for expansion.[11]
Rick Dodge said during the 1998 expansion that his “biggest concern” was that MLB would reach the end of its roadmap and then decide not to expand after all, while Phillies owner and expansion committee member Bill Giles admitted that “there’s definitely some [owners] who don’t want to do it.”[12] [13] While the league did decide to expand in the end, it was “not a sure thing”.[14] It is certainly possible that MLB will follow a similar formula in the future – from the owners’ perspective delaying their final decision until the last possible moment, when they have as much information possible available to them, is the least risky option.
STAGE 3: REQUIREMENTS IDENTIFIED AND BIDS SUBMITTED
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The first step of any expansion roadmap will be to set the basic requirements that expansion teams must meet, and then gather information on whether prospective ownership groups meet those requirements.
This information gathering exercise will probably take the form of a questionnaire sent to all interested parties. For the 1993 expansion, twenty-three interested groups from nine North American locations were forwarded a survey, which:
“The fundamental thing to remember in expansion… [is that] cities are never awarded franchises. Owners are awarded franchises.”
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- Rick Dodge, a St. Petersburg official instrumental to bringing baseball to the region [1]
Related content:
What is MLB expansion?
When will MLB expand again?
How do cities win a team?
Why is expansion so rare?
“Consisted of 39 questions, divided into five sections – location, ownership, stadium, government and market. Some of them were easy. For example, question 9: 'Do any members of the proposed ownership have any ownership or management interest in any casino gambling or other gambling operations? If so, describe'…elsewhere, in the stadium section…the National League wanted to know, among other things, about field dimensions, parking, lighting, whether or not the stadium was equipped with luxury suites (how many?) and a video board, whether it was owned outright or leased, and if it was leased, on what terms…the league [also] asked 'What is the landlord’s position regarding the retention by the club of parking, concession, signage, pay television and luxury box revenue?'."[15]
Prospective owners will complete the survey and return it to the league alongside an application fee (in the 1993 expansion this was a refundable fee of $100,000) to prove their bid is serious. At this point the league might also set the expansion fee – in the 1993 process the questionnaire came alongside an announcement that it would be $95 million – but this too might only be set later in the process, as in 1998.
Regardless of the point at which the expansion fee is set, it is expected to be in the ballpark of $2.2 billion. Rob Manfred suggested it as a plausible benchmark in 2021, following research by Sportico estimating it as the average valuation of an MLB franchise.[16]
STAGE 4: PRESENTATIONS
Upon the deadline for return of the surveys there will be an initial selection process, eliminating ownership groups that clearly do not meet MLB’s requirements. All other groups will progress to a round of presentations to MLB’s expansion committee. In the 1993 process these were held at the National League’s offices in New York; in 1998 in an airport hotel outside of Chicago.
This initial process is unlikely to eliminate too many groups. It is in MLB’s interests to hear even longshot contenders, partly because one might offer an unexpectedly strong pitch but mostly because it showcases the demand for the game across North America, which can help existing owners extract concessions from the cities in which they are based in exchange for staying put. In the 1993 process the committee heard seventeen presentations from ten cities; in 1998 they heard five from four cities, reflecting that the clear expectation that Phoenix and Tampa-St. Pete would be awarded teams had led to fewer prospective ownership groups applying.
The format of the presentations has traditionally been pretty simple: “You get all you can into the presentation, and then you answer questions.”[17] The broad nature of what MLB wants will have been made clear at this point and the minutiae of what is discussed will “depend on what [the ownership groups] choose to present.”[18] As George Steinbrenner put it during the 1998 process, the presentations are “very important… getting to know people who may or may not become your partners is important. This is no fire drill.”[19]
Once the presentations have been made, the league will winnow down the contenders into a shortlist who will progress onto the next stage.
STAGE 5: VISITATIONS (AND SECOND PRESENTATIONS)
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Once a prospective ownership group is shortlisted, a delegation will visit their city to give them a further opportunity to make their case. This might include giving prospective ownership groups the chance to make an additional presentation, as well as showing off the stadium (or proposed stadium site) where their franchise will play.
At the 1993 expansion six ownership groups reached this stage, representing Buffalo, Denver, Miami, Orlando, St. Petersburg and Washington. In 1998, all five groups who presented also received a visitation.
This stage also has the potential to be extremely consequential. In the 1993 process the visitations were an important factor in determining the ownership groups awarded a franchise. The prospective Denver ownership group used their visit to demonstrate the groundswell of support for Major League Baseball in the city, which was a key factor in their receipt of a team. Bill Giles, who was on the expansion committee, told the group afterwards that "before we came here, I would have told you that I thought you were third" and tipped his hand by telling them that the visit was "illuminating and instructive" and that he was "real impressed."[20] In contrast, the expansion committee’s visit to Orlando left them feeling that it was not a big enough market for Major League Baseball and was cited as a reason the city’s prospective ownership group was not successful.[21]
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STAGE 6: RECOMMENDATIONS AND FINAL DECISION
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Once the visitations have taken place, the expansion committee will decide which prospective ownership groups to recommend for expansion. There will then be a league-wide owners’ vote, with 75% of them having to vote in favour of expansion for it to take place. At the 1998 expansion two votes around a month apart were necessary – one to approve expansion in principle and another to accept the committee’s recommendation of Jerry Colangelo’s Phoenix-based group and Vince Naimoli’s Tampa-St. Pete-based consortium. At the 1993 expansion, the creation of two new franchises was approved in principle at the beginning of the process and so the only vote necessary was to approve the creation of the Colorado Rockies and Florida Marlins.
Assuming that the prospective ownership groups agree to MLB’s terms and conditions - including the expansion fee - they will be welcomed into the fold as the owners of an expansion franchise and MLB will have new ballclubs.
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References:
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[1] Playing Hardball: the high-stakes battle for baseball's new franchises, David Whitford, 1993.
[2] "Group led by Dave Stewart preparing bid for potential MLB expansion team in Nashville", ESPN, Howard Bryant, 19 April 2022, https://www.espn.co.uk/mlb/story/_/id/33768273/group-led-dave-stewart-preparing-bid-potential-mlb-expansion-team-nashville
[3] "Montreal mayor shares ideas with Manfred", MLB.com, Paul Hagen, 28 May 2015, https://www.mlb.com/news/montreal-mayor-denis-coderre-shares-ideas-with-commissioner-rob-manfred/c-127208474
[4] ​"Canzano: Portland’s NCAA Final Four bid miss is just the start of the sobering story", Oregon Live, John Canzano, 14 October 2020, https://www.oregonlive.com/sports/john_canzano/2020/10/canzano-portlands-ncaa-final-four-bid-miss-is-just-the-start-of-the-sobering-story.html
[5] "Making the Valley Major League: An Ownership History of the Arizona Diamondbacks", SABR, Clayton Trutor, (no date),
https://sabr.org/journal/article/making-the-valley-major-league-an-ownership-history-of-the-arizona-diamondbacks/
[6] How You Play the Game: Lessons for Life from the Billion-Dollar Business of Sports, Jerry Colangelo, 1 April 1999.
[7] How You Play the Game: Lessons for Life from the Billion-Dollar Business of Sports, Jerry Colangelo, 1 April 1999.
[8] "Nashville declines to bid", The Tennessean, Jimmy Davy, 17 August 1994,
[9] Playing Hardball: the high-stakes battle for baseball's new franchises, David Whitford, 1993.
[10] "Rob Manfred doesn’t rule out changes to postseason pitch clock, but they seem unlikely", The Athletic, Evan Drellich, 12 July 2023, https://theathletic.com/4684737/2023/07/11/rob-manfred-postseason-pitch-clock/
[11] "Expansion on Agenda if Baseball Resolves Strike", The Salt Lake Tribune, Associated Press, 30 October 1994.
[12] "Bay area steps up to plate yet again", Tampa Bay Times, Marc Topkin, 1 November 1994.
[13] "Bay area steps up to plate yet again", Tampa Bay Times, Marc Topkin, 1 November 1994.
[14] "Bay area steps up to plate yet again", Tampa Bay Times, Marc Topkin, 1 November 1994.
[15] Playing Hardball: the high-stakes battle for baseball's new franchises, David Whitford, 1993.
[16] "Manfred's $2.2 Billion for MLB expansion fee on the high side, at least for now", Sportico, JohnWallStreet, https://www.sportico.com/leagues/baseball/2021/mlb-expansion-fee-1234628756/
[17] "Herrick, city fine-tuning presentation", The Orlando Sentinel, J. Russell White, 16 November 1994.
[18] "Magic staff works on baseball presentation", The Orlando Sentinel, Barry Cooper, 8 September 1990.
[19] "Bay area steps up to plate yet again", Tampa Bay Times, Marc Topkin, 1 November 1994.
[20] Playing Hardball: the high-stakes battle for baseball's new franchises, David Whitford, 1993.
[21] Playing Hardball: the high-stakes battle for baseball's new franchises, David Whitford, 1993.