Orlando is coming. New York, New York is coming. Atlanta is (probably) coming. Miami is coming, one day. Four new teams means 120 more roster slots, increasing the league's player pool by a little over 20%. Does this mean that the league is going to get 20% worse? Hardly.
Prompted with the dilution question by chrisperry1983, whose comment on today's Major Link Soccer has inspired some great discussion, I decided my response merited an actual post.
To look at this question in depth, we first have to ask: What are the mechanisms by which expansion causes dilution? And we should also consider the opposite question: What are the mechanisms by which expansion causes inflation?
I can identify four main ways in which expansion can or does cause dilution. First is the most obvious, the Expansion Draft, which directly moves players from their current team. Second is that the new teams create competition in acquiring players who are joining or moving within MLS through various mechanisms. Third is the dilution of available domestic players, especially Americans. Fourth is the dilution of shared revenues.
The Expansion Draft as currently formatted allows the expansion team to acquire 10 players from across the league who are not on any other team's protected list. Teams get to protect 11 players, some players are automatically protected and don't count against the 11, and the expansion team is allowed one player per team. This means that as the league currently stands, approximately half the league will be untouched.
Teams can find very good players in the Expansion Draft. The Impact got Jeb Brovsky, Justin Mapp, and Colleen Warner; the Timbers got David Horst and, uh, a bunch of players they later traded; the Whitecaps got Joe Cannon and, uh, a bunch of players they immediately traded; the Union got Sebastian Le Toux, Stefani Migliorzani, Alejandro Moreno, and Jordan Harvey; the Sounders got Brad Evans, Jeff Parke, James Riley, Nate Jaqua, Tyson Wahl, and Nathan Sturgis... Recalling all these guys should show that though teams have found good players, I only could find three or so per team that were worth naming. I don't think these teams missed these players all that much. I think the Sounders would have liked Le Toux back (why did we protect three CBs?) and Columbus might wish they'd have held on to Evans, but I can't find others where a team was definitely worsened by losing someone to the Expansion Draft.
The second mechanism of dilution is increased competition when acquiring players. Some of you might have experienced this playing Fantasy Football--you jump from an 8-team league to a 12-team league and all of a sudden you're stuck with starting Bilal Powell as your RB2. More teams selecting players becomes especially problematic with the SuperDraft, in which fewer and fewer impact players are found each year, but also affects the Re-Entry Draft, the Allocation Order, and other mechanisms with softer competition like Discovery and Designated Player signings. The fact of the matter is that certain players want to play in MLS and are not particularly choosy about where they play. Some of them aren't allowed to be choosy. Adding more destinations means it is less likely for talent to concentrate in any one area. This is probably what people mainly refer to when talking about talent dilution.
The third thing, not really a mechanism, is the thinning of available domestic players. This is an issue stemming from the league's roster rules. There are currently a limited amount of international slots on every team's roster, ensuring that the majority of roster spots go to Americans (or at least legal permanent residents) with some Canadians on the Canadian teams. This is a result of the league's original mission: to elevate the status of American soccer. The limits ensure that American players get playing time and make up a majority of the league. But, of course, there is a finite pool of MLS-quality Americans. As MLS's quality continues to improve, those Americans will need to continue to get better. And as expansion continues, the league will have to find more of these Americans to keep up the pace. There are ways to solve this issue--more international slots, more aggressive on getting players Green Cards, more flexibility on who counts as a domestic player--but it is an issue.
The fourth mechanism is a simple matter of dollars and cents. Adding more teams means that more teams get a slice of that sweet sweet pie of TV money, amongst other sources of shared revenue. Right now if the 19 teams got $100 million to share from a TV deal, each team would get about $5.2 million. When the number of teams goes up to 23, each team's cut is about $4.3 million. They'll be getting about 20% less money, which is significant when many teams are still running in the red. This could mean less spending on academies, on Designated Players, on team facilities and amenities, and so on. It's not hard to imagine that having less money means you can't put out as good of a product on the field.
So the concerns about dilution are fair enough. There are many ways in which a bigger league can potentially lead to dilution. But that's just looking at one side of the coin. Why don't we look at all the ways in which expansion can lead to an inflation of quality?
I can think of four main ways in which the league's quality is inflated through expansion. First and foremost, expansion should lead to increased revenues by the league. Second, the league's reputation is enhanced, enticing more players to join the league. Third, additional teams means more staff training and bringing good players to the league. Fourth, these specific cities will be attractive for players that would not have otherwise joined the league.
The first one is the most obvious. Expansion teams pay a hefty expansion fee that should defray any concerns that shared revenue will drop initially. And the league only lets in teams that should be able to pull their weight financially in almost any scenario. Orlando, Miami, and Atlanta will expand the league's national blueprint, essential for success on national television. New York City FC also vastly improves the league's presence in the continent's largest city. NYCFC might even turn a profit in the first year, if things go well (ignoring what costs it will take to build their own stadium). This is the reason the league is expanding: more teams should mean more money, and more money should mean a higher quality of play.
The second reason is a bit more nebulous but is still important. A growing, expanding, financially strong league will attract players and fans alike. As more and more people watch MLS, which will happen with an expanded league, joining the league looks like a better and better option for players. There are many horror stories in South America, Central America, Eastern Europe, and even some of the big European leagues where players are not getting paid what they were promised or are otherwise treated poorly. Some of those teams are in dire financial trouble and cannot afford to pay their players.
MLS is demonstrating financial stability by expanding into new markets at a measured rate, which is sure to be an attraction. MLS is also increasing its cultural impact by adding fans, which can only serve to increase its reputation amongst players at home and abroad, making it a better option for players figuring out where to play. So although the expansion teams might directly steal players from other teams, they partially make up for it by helping to draw additional players to the league by increasing the league's reputation.
The third reason is quite a bit more practical. More teams means that there are more coaches, more technical staff, more scouts, and more contacts all working to build an MLS roster. It is quite possible Fredy Montero and Jhon Kennedy Hurtado would have never joined MLS if not for Sigi and Hanauer traveling to Colombia together. We might have been robbed of Camilo, Diego Valeri, and Marco Di Vaio. The LA Galaxy might have been able to bring back one of Clint Dempsey or Michael Bradley, but certainly not both. More coaches and scouts, with their contacts, means the league has another team out there looking for valuable players for the league.
Each expansion team has employed their own strategy: the Sounders have found Colombian unknowns, some decent Scandinavians, former CCL opponents, and unwanted players from Liga MX.; Portland values Argentinians and Africans; Montreal has their aging Italians (these are clearly generalizations). These teams will also have their own academies and their own local contacts, bringing in local players who have the potential to make it in MLS. As has been shown in the past, this is actually how the expansion teams build a majority of their talent. They bring in guys that might not have been here otherwise. It's not like there aren't very many MLS-quality players out there (rotational, starters, and all-stars alike). More staffers means we have more people to go find them.
The fourth is not as big a reason and sort of a subset of the third, but the fact remains that some players would only and will only play for certain teams. The league almost certainly would never have had Kasey Keller if not for Seattle. If Orlando actually brings in Kaka, I'd be willing to bet he wouldn't have played anywhere else. Man City will send players to NYCFC that would not have joined the league otherwise. I'm also sure that every other team in the league has had a unique connection to certain players who would not have joined the league if they hadn't existed (yes, even Chivas).
This normally is not a huge deal, but I think it will be for the four expansion teams we know of (counting Atlanta). If Atlanta works, it immediately becomes a big-city team. Miami and Orlando provide warm-weather destinations for players unwilling to move to Texas or California. And NYCFC provides an outlet in New York, New York instead of New Jersey. These are not big deals to most players but they can be deciding factors to some. Does anyone really think Kasey Keller would have played three years in MLS if it had been Portland joining in 2009?
All in all, I believe the evidence strongly stacks up in favor of expansion leading to talent inflation for the league. As past evidence suggests, the forthcoming expansion will actually, in all likelihood, lead to inflation.