Major League Baseball Must Proceed With Caution Regarding Expansion

Major League Baseball has been at the forefront of sports business news in recent weeks regarding media rights, expansion and realignment. While clarity will soon be achieved when it comes to potential media partnerships with ESPN, NBC Sports and Netflix, expansion and realignment remain nebulous given the political, economic and geographic complexities that accompany matters of this nature. Even though it is a fun exercise projecting potential realignment plans, reality tells us we are years away from expansion and seeing 32 franchises split geographically across eight divisions. However, planning for these ideas must begin right now as several markets have identified themselves as viable candidates for expansion. In what would be a prudent move, Major League Baseball needs to take a step back and envision what successful franchise ownership would look like a decade from now in certain markets and how to avoid missteps of the past when it comes to expansion and relocation.

Conversations regarding expansion and realignment usually come to a grinding halt as issues with the overall health of current franchises and collective bargaining are top priorities for Major League Baseball. The future of the Tampa Bay Rays and the Athletics’ departure from Oakland have served as deterrents to expansion. Presently, the Rays are in exclusive discussions to sell the franchise to Patrick Zalupski, Bill Cosgrove, Ken Babby and prominent Tampa Bay investors for a reported $1.7 billion according to Scott Soshnick and Kurt Badenhausen of Sportico. Forbes values the Rays at $1.25 billion while current owner Stuart Sternberg purchased the franchise in 2004 for $200 million.

Major League Baseball And Tampa Bay Rays

An estimated $60 million in repairs to Tropicana Field because of Hurricane Milton has the Rays playing their home ball games this season at the New York Yankees’ spring training complex in Tampa. The Rays have pursued a new ballpark for nearly two decades amid political and economic disagreements whether to build in Tampa, St. Petersburg or relocate the franchise to another market. At one point in time, an absurd idea was presented for the Rays to play half of their regular season ball games in the Tampa Bay region and the other half in Montreal. Even though Central West Florida has demonstrated an inability to economically support the Rays, Major League Baseball is committed to maintaining a franchise in the Tampa Bay region.

Major League Baseball And Its Future In Las Vegas

Controversy and concern have surrounded every aspect of the Athletics’ departure from Oakland and eventual move to Las Vegas in 2028 after a minor league pit stop in Sacramento for three years. Ground was broken on the new ballpark in June, but inquiring minds want to know if it was in Major League Baseball’s best interests to approve of the Athletics’ relocation to Las Vegas. Its status as a transient market doesn’t bode well when franchises have 81 home ball games during the regular season and the 2025 major league average attendance is 29,303 fans per ball game according to Baseball-Reference. The data is slightly misleading this season given how the Athletics and Rays are playing regular season home ball games in minor league ballparks with seating capacities of less than 15,000 for fans.

Final construction costs on a 33,000-person capacity ballpark in Las Vegas are approaching $2 billion according to current estimates. Initial costs were projected to be $1.5 billion as shovels have only been in the ground for two months. Besides the financial burden of the ballpark, is owner John Fisher up for the enormous challenge of building an entirely new fan base in the Mojave Desert while competing against a myriad of entertainment options in a television market smaller than Milwaukee but larger than Jacksonville?

According to Forbes, the average franchise value in Major League Baseball is $2.6 billion. Besides concerns regarding media rights, the sale of the Rays and the Athletics’ future in Las Vegas, expect Major League Baseball commissioner Rob Manfred and the owners to stress the importance of a salary cap in next year’s collective bargaining agreement negotiations. On December 1, 2026, the current collective bargaining agreement will expire, and labor strife is inevitable given how the owners believe franchise values and profits are adversely affected by escalating payrolls and the diminished value of local media rights. Regardless of the severe penalties imposed by the Competitive Balance Tax, large market franchises such as the Los Angeles Dodgers and New York Mets have treated it as a speed bump and are willing to pay nine-figure penalties for exceeding various thresholds. As Major League Baseball is nowhere near the National Football League and National Basketball Association in terms of average value-to-revenue multiples, franchises such as the Minnesota Twins and Washington Nationals have been pulled off the market for sale given concerns with debt, market value, local media rights, attracting new investors and the lack of cost containment strategies on payroll.

Major League Baseball Must Think Differently

Before expansion and realignment can be seriously considered, Major League Baseball needs to take a sobering look at its present and future. The death of the traditional television model and regional sports networks are forcing Major League Baseball to think differently regarding how content is distributed to fans. Innovations in new platforms and streaming services must provide greater accessibility and affordability while eliminating archaic rules that impede growth such as blackout restrictions. As Charlotte and Raleigh have been identified as potential markets for expansion, fans who live in North Carolina are presently subjected to blackout restrictions as it is the home territory of the Baltimore Orioles, Washington Nationals, Cincinnati Reds and Atlanta Braves. They spend hundreds of dollars a year on MLB.TV and other streaming services to consume Major League Baseball and still cannot watch every ball game.

The direct-to-consumer approach must consistently evolve while providing fans with unprecedented access at an affordable price. Ballpark experiences are being transformed by mixed-use development and have become multi-faceted entertainment complexes that blend hospitality, residential, and retail with baseball serving as its centerpiece. It is a far more sophisticated business model for owners of a franchise today than it was in 1995 when Major League Baseball last announced expansion with the Arizona Diamondbacks and Tampa Bay Devil Rays both paying a $130 million fee.

Experienced professional sports franchise owners with intimate knowledge of potential expansion markets are needed if Major League Baseball plans to expand to 32 franchises in the coming years. They cannot afford a single misstep given what is at stake when it comes to innovation, realignment and revenues. In what could be an expansion fee of at least $1 billion, Major League Baseball needs concrete answers to complicated questions with a forward-thinking approach to franchise ownership.