Expansion team An expansion team is a term used for a brand new team in a sports league . The term is most commonly used in reference to the North American major professional sports leagues , but is applied to sports leagues worldwide that use a closed franchise system of league membership . The term comes from the expansion of the sport into new areas . This sometimes results in the payment of an expansion fee to the league by the new team , and an expansion draft to populate the new roster . Reason for expansion . In North America , expansion takes place in response to population growth and geographic shifts of population , driven by the resulting financial opportunity made possible by such demographic change . For example , Major League Baseball was limited to 16 teams located north and east of St . Louis , Missouri for the first half of the 20th century . During this time , the United States population doubled and expanded to the south and west . Rival interests explored the possibility of forming a rival league in these untapped markets . To forestall this possibility , one of the measures MLB took was to expand by four teams in 1961 and 1962 . Over the past four decades , MLB expanded further to its current 30 - team membership . In the context of MLB , the term " expansion team " is also used to refer to any of the 14 teams enfranchised in the second half of the 20th century . When an expansion team begins play , they are generally stocked with less talented free agent s and inexperienced staffs . Additionally , prospective owners may face expensive fees to the league as well as high start - up costs such as stadiums and facilities . As a result , most expansion teams are known for their poor play during their first few seasons . This can be exacerbated by the fact that leagues often expand by two or four teams in one season , to eliminate the possibility of a bye - week in the draw from having an odd number of teams . In those cases , expansion teams must compete with their expansion rivals for available talent . Expansion teams are not usually doomed to mediocrity forever , as most leagues have policies which promote parity , such as drafts and salary caps , which gives some expansion teams the opportunity to win championships only a few years after their first season . The Arizona Diamondbacks won the 2001 World Series only three years after the team ' s 1998 founding , even though Major League Baseball is generally considered the least conducive to parity . Similarly , in the 1996 NFL season , only the second year of the Carolina Panthers ' and Jacksonville Jaguars ' existences , both teams made their respective conference championship games . Most teams are considered as an expansion team usually in their first season and sometimes in their second season . A team that moves to another location and / or changes its name is generally not considered an expansion team . They are known as " relocated teams " . If the name changes they are known as " renamed teams " . In response to a negative attitude some fans have towards relocated teams , there have recently been instances where relocating clubs change their identity completely ; name , colours and mascot , but because the roster is the same , and because the league does not expand as a result , they are not regarded as expansion teams . Teams which have been ' reborn ' in this manner include the Baltimore Ravens in the NFL , the Oklahoma City Thunder in the NBA and Houston Dynamo in the MLS . ( Legally , however , the Ravens are considered an expansion team , due to an agreement with the Cleveland Browns , the current incarnation of which was formed in the manner of an expansion team , but owns the rights to the Ravens ' history while the team was in Cleveland and known as the Browns . ) Cities and regions with large populations that lack a team are generally regarded to be the best candidates for new teams . For example , the National Football League ( NFL ) has recently considered Los Angeles , California to be the best possibility for a brand new NFL team and Toronto , Canada as a second choice . The European Super League in rugby league has added teams from France and Wales to cover a great demographic spread .