In North America, expansion often takes place in response to population growth and geographic shifts of population. Such demographic change results in financial opportunities to engage with the new market as consumers of sports demand local teams to support. Major League Baseball (MLB) was limited to 16 teams located north and east of St. Louis, Missouri for the first half of the 20th century. During that time, the United States population doubled and expanded to the south and west. Rival interests explored the possibility of forming a rival league in the untapped markets. To forestall that possibility, one of the measures that 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.
Leagues that are new and/or financially struggling may also admit large numbers of expansion teams so that the existing franchises can pocket more revenue from expansion fees. Indoor American football leagues are notorious for doing so: the leagues can double the number of teams and have many new teams fail within a year or two. Major League Soccer, after spending most of its first decade of existence with relatively stable membership and struggling finances, adopted a policy of continuous expansion beginning in 2005, a policy that the league as of 2017 has no intention of stopping.
When an expansion team begins play, it is generally stocked with less talented free agents, inexperienced players, and veterans nearing retirement. Additionally, prospective owners may face expensive fees to the league as well as high startup costs such as stadiums and facilities, and the team is also at a disadvantage in that it has not been together as a team as long as its opponents and thus lacks the cohesiveness other teams have built over years. As a result, most expansion teams are known for their poor play during their first few seasons, which can be exacerbated by the fact that leagues sometimes expand by two or four teams in one season for scheduling reasons, such as eliminating the possibility of a team being without an opponent on a preferred date by 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 give some expansion teams the opportunity to win championships only a few years after their first season. The Arizona Diamondbacks won the 2001 World Series in only their fourth season. The Milwaukee Bucks won the 1971 NBA Finals in only their third year of existence, greatly helped by drafting Kareem Abdul-Jabbar in the 1969 draft and acquiring Oscar Robertson from the Cincinnati Royals before the 1970-71 season began. The Chicago Fire won MLS Cup in 1998 in just their first year of existence in Major League Soccer. In 2011, the Portland Timbers started their MLS franchise, and they won the MLS Cup in 2015. The Florida Panthers made the Stanley Cup Finals in only their 3rd season in the National Hockey League (NHL) even though, like MLB, the league then had no salary cap. The NHL's Vegas Golden Knights quickly emerged as one of the NHL's best teams in its first season, thanks to a generous expansion draft, eventually advancing to the Stanley Cup Finals. The National Football League, despite being considered the most generous in its revenue sharing and the strictest with its salary cap, has had far more difficulty bringing expansion teams up to par with their more established brethren: since the AFL–NFL merger, the soonest that any of the six expansion teams that have been added after the merger would win a Super Bowl was 27 seasons (the time it took for the Tampa Bay Buccaneers after the team's 1976 establishment to win Super Bowl XXXVII in early 2003); none of the four that have been added since 1995 have ever won that contest, with only one, the Carolina Panthers (who reached the game eight years after their founding, and again 12 years later) even playing in the NFL's championship game. The transplantation of the Cleveland Browns' roster to Baltimore and its restocking via expansion has so far crippled the franchise, with it ranking among the worst in league history since the expansion and only appearing in the NFL playoffs once, having yet to win a playoff game since then.
Most teams are considered as an expansion team usually in their first season and sometimes in their second season, but especially for purists, Major League Baseball teams can be considered "expansion teams" indefinitely. A team that moves to another location and/or changes its name is not an expansion team. If it moves, it is known as a relocated team, and if the name changes, the team is known as a renamed team. In response to a negative attitude that some fans have towards relocated teams,[according to whom?] there have recently been instances where relocating clubs change their identity completely; name, colors and mascot; but because the roster is the same and the league does not expand as a result, they are not regarded as expansion teams. One exception is the Baltimore Ravens of the National Football League (NFL): when the Cleveland Browns moved to Baltimore, an agreement was reached for which the history of the pre-1996 Cleveland Browns remained in that city and was claimed by the post-1999 Browns when the league placed a new franchise there even though the actual team and roster had moved to Baltimore to become the Ravens.Another exception is the New Orleans Pelicans, who were previously known as the New Orleans Hornets after relocating to New Orleans from Charlotte, N.C., in 2002. After the 2012 sale of the Hornets, new owner Tom Benson changed the name, colors and mascot from Hornets to Pelicans. The Charlotte Hornets segment of the franchise's history was sold to the then-Charlotte Bobcats (themselves formerly considered a 2004 expansion team) and the 2002 New Orleans Hornets are now officially regarded as an expansion team.
Cities and regions with large populations that lack a team are generally regarded to be the best candidates for new teams. The European Super League in rugby league has added teams from France and Wales to cover a great demographic spread. The operator of Super League, England's Rugby Football League, has also added teams to the lower levels of its league pyramid, specifically the Championship and League 1, from both France and Wales, and most recently Canada. In rugby union, the competition originally known as the Celtic League and now as Pro14, which began with sides only from the Celtic nations of Ireland, Scotland and Wales, has added teams from Italy and more recently South Africa. The U.S.-based NFL has been laying groundwork for a potential franchise in the UK, tentatively slated to launch in 2022.
Two teams from the AFL of the 1960s were themselves expansion teams in that league. Both joined the AFL after the merger with the NFL was agreed to, but before it was finalized.