An expansion draft, in professional sports, occurs when a sports league decides to create one or more new expansion teams or franchises. This occurs mainly in North American sports. One of the ways of stocking the new team or teams is an expansion draft. Although how each league conducts them varies, and they vary from occasion to occasion, the system is usually something similar to the following:
Each existing team is told it can "protect" a certain number of its existing contracted players by furnishing their names to the league office on or before a certain date. The expansion team(s) then are allowed to select players not on the protected lists in a manner somewhat similar to an entry draft. There are generally a maximum number of players that can be selected from any one team, at least without the team losing the player receiving something in compensation such as a future entry draft pick.
Teams subject to losing players usually tend to put most if not all of the players they truly need to stay competitive on the protected list. This means that the expansion franchise is usually left to choose among players who are old, injury prone, failing to develop as the teams had intended, or perhaps so highly compensated that a team wishes to remove them from the payroll. For this reason, expansion teams are often noncompetitive in their early years in a league, although the advent of the free agent system has modified this somewhat.
Most teams seem to try largely to make a team which will serve until it can begin to develop its own talent, although occasionally players discarded by their old teams benefit from the change in environment and become stars, either again or for the first time.
A similar process occurs when an existing franchise is disbanded and the players contracted to it become available to the remaining teams; this process is referred to as a dispersal draft.