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MLS considers jumping expansion fees to $50 million

Just three years after adding an expansion team in Toronto for $10 million, MLS may raise expansion fees to $50 million.

The possibility was one of several discussed at MLS’s board of governors meeting July 24 in Toronto. League owners discussed expansion for two to three hours but left the meeting ambivalent about how many teams to add, what expansion fees should be, and how additional teams might affect the league.

MLS announced last week that it will accept applications for expansion teams until Oct. 15 and announce two expansion cities in the first quarter of 2009, but MLS owners say several issues around expansion remain unresolved.

“There’s a lot of people who want to get in this league, which is good,” an owner said, speaking anonymously because the meeting was confidential. “We’ve just got to figure out the right way to do it.”

At the meeting, MLS Commissioner Don Garber listed eight markets interested in potential expansion: Atlanta, Las Vegas, Montreal, a second team in the New York area, Ottawa, Portland, St. Louis and Vancouver.

The level of interest led owners to discuss adding not just two but four teams in the coming years, according to people familiar with the meeting.

Advocates of adding four teams pointed to the immediate benefit of their expansion fees and the overwhelming demand to join the league. Opponents questioned whether adding so many teams so quickly would dilute the current owners’ share of Soccer United Marketing revenue from sponsorship and TV, and weaken the player talent pool.

Owners also discussed the current price of expansion fees. Garber has said the next expansion fees will be $40 million, but some owners are advocating raising them to $50 million. That would mark a 400 percent increase from the $10 million that Maple Leaf Sports & Entertainment spent to join the league in 2006 and a 66 percent increase from the $30 million that Philadelphia and Seattle spent last year.

None of those issues were resolved during the board of governors meeting, and owners expect them to be hashed out by the expansion committee in the coming months. That committee comprises Phil Anschutz, Dave Checketts, Antonio Cue, Dan Hunt, Cliff Illig, Victor MacFarlane and Richard Peddie.

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