Grant Wahl of Sports Illustrated reports that MLS is reducing the impact of the Expansion Draft; each new team will only take five, rather than 10, players in the next round of expansion. Because of this new rule, existing teams will also only lose a maximum of one player. The two clubs joining the league taking players in the 2017 Expansion Draft are Atlanta United and Minnesota United. The latter will be joining the Sounders in the MLS Western Conference.
During previous expansion rounds with two teams, an existing club could lose up to two players and could expand their protected list after losing their first.
Wahl does not mention any changes to the protected list mechanism. In the last Expansion Draft a team protected 11 players, plus all Generation adidas players and certain Homegrown Players.
... Homegrown Players on a club’s Supplemental Roster at the end of the 2014 MLS season are automatically protected (clubs do not have to use a protected slot on them).
In 2014, the Seattle Sounders lost Jalil Anibaba to Orlando. In 2011, Montreal selected James Riley via the Expansion Draft. The 2010 Expansion Draft cost Seattle Sanna Nyasi and Nathan Sturgis, both taken by Vancouver.
MLS rules also state that Free Agents can be protected, but are not required to be. Any player with a no trade clause must also be protected — these are most often under-contract Designated Players.
The 2016 Expansion Draft will take place on December 13th, per Wahl.
UPDATE: MLS released the full expansion draft rules, confirming Wahl’s report and offering more specifics.