Fall 1997: Terms of Major League Expansion
1961 AL expansion (Los Angeles Angels and new Washington Senators): No franchise fee, but clubs obligated to spend at least $2.1 million on players; the Angels also had to pay $550,000 indemnification to the Dodgers for moving into their territory. Each existing AL club made available 15 of the 40 players, including at least seven who had been on the 25-man roster prior to 9/1/60. The newcomers had to pay $75,000 for each of 28 players, subject to position requirements: 10 pitchers, two catchers, six infielders, four outfielders, six from anywhere. The Angels and Senators could also draft one player from each existing club's farm systems for $25,000; the Angels drafted two this way, the Senators three. Thus the Angels paid $2,150,000 for 30 players, the Senators, $2,175,000 for 31.
1962 NL expansion (Houston and New York Mets): No franchise fee. NL adopts AL's rules for draft eligibility: 15 players from each existing club, including seven from the 8/31 25-man roster. Houston and NY required to pick two from each roster for $75,000, and allowed to pick a third for $50,000. After this done, each existing club puts up two more players from its 25-man roster for a "premium draft" -- Houston and NY to pick four each, one from each club, for $125,000 each. Mets wind up spending $1.8 million for 22 players; Astros spend $1,850,000 for 23.
1969 AL expansion (Kansas City and Seattle): $100,000 franchise fee. Each team acquires 30 players (3 from each team) for $175,000 each -- a total of $5.25 million. Draft eligibility: organization can protect 15 players (not limited to those on the 40-man roster), then 3 more protected after each player lost. New clubs don't share in national TV money for 1969-71, which costs them an additional $2,062,500.
1969 NL expansion (Montreal and San Diego): $4 million franchise fee, with each club required to have an additional $2.5 million working capital. Clubs draft 30 players for $200,000 each, for a total cost of $10 million. Draft eligibility: organization can protect 15 players (not limited to those on the 40-man roster), then can protect three more after each player lost. NL allows expansion clubs to share in TV money.
1977 AL expansion (Seattle and Toronto): Total cost of $7 million for Toronto; $6.5 million for Seattle, which got its team in partial settlement of an antitrust suit. This figure includes the $5.25 million cost of drafting 30 players for $175,000 each from other AL clubs, which were allowed to protect 15 in the first round, three more after each of the first three rounds, two more after the fourth.
1993 NL expansion (Colorado and Florida): $95 million expansion fee, including the right to select 36 players. Expansion clubs don't share in 1993 TV money, costing each roughly $14 million more. AL receives $42 million of the $190 million expansion money, but must also participate in the expansion draft. Each existing team allowed to protect 15 players from its 40-man roster; after each of the first two rounds, NL clubs can protect three more, AL clubs, four more. In third round, all 12 NL clubs, but just 8 of 14 AL clubs, lose players.
1998 major league expansion (Arizona and Tampa Bay): $130 million in expansion fees -- $32 million in July 1995, $25 million in July 1996, $40 million in July 1997, $33 million in November 1997 -- plus foregoing $5 million from baseball's central fund in each of the five years 1998-2002, for a total of $155 million. The draft pool includes all players on the 40-man roster, plus anyone in the organization drafted in 1994 or earlier and those 19 or older when drafted in 1995. The expansion clubs draft 35 players. Existing teams can protect 15 players from the draft pool in the first round, then three more after each of the first two rounds. In the third round, only seven teams in each league lose players.
Copyright © 1997 Doug Pappas. All rights
Originally published in the Fall 1997 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.