Re-posting something I wrote in the rumour thread about this --
For what it's worth (probably not much) I cover MLS professionally. I'm deeply sorry for my career choice (note: I'll be on the press call today. I'll Tweet it live (SPAM ALERT -- 24thminute is my account).
Regardless, I can answer a lot of the questions about how MLS actually works and, I think, offer some informed speculation about what ownership/close association with a MLS team might mean for City.
First off, put aside any ideas that you might have about "fringe" youth players going over and making up the roster of NYCFC. As others have pointed out, Chivas USA attempted to do something like that in 2005 and almost broke a league record for least points in a season. Based on the type of English player that has been successful when coming to MLS, the quality of the league is likely mid-to-low Championship. League One players that have signed to MLS sides have failed to have an impact more often than not. So, if a City player isn't good enough for a Championship loan he isn't going to be good enough for a MLS loan either.
Someone asked whether loan deals were allowed in MLS. They are. They are quite common, actually. So, there would be the opportunity for City players to be loaned to NYCFC.
That said, the biggest issue facing that would be the domestic quota requirements of the roster. Only eight non-American players can be on the 24 player roster of the American-based teams (there are three Canadian teams for those that aren't aware) at any time, although the club could trade other assets to obtain more. The Red Bulls currently have the most international slots with 12.
Players are actually signed to MLS, not the individual teams and must fit within a salary cap of $2.95 million USD -- that's the whole roster, not one player...However, each team can sign up to three "designated players", which are signed to the individual teams, not the league and only cout $350k USD against the salary cap (less if younger than 23).
The biggest competitive advantage City could gain by this would be through the academy system. Increasingly, MLS is trying to move away from the college drafting system and instead move towards a system that is more in line with the rest of the world. Each team is required to have an academy and they can sign an unlimited amount of players from the academy (and have up to five players not count as a roster spot, nor against the salary cap). Clearly, if MYCFC were to have a foothold in the NYC market the very best academy prospects could be poached to the big club.
This seems likely to happen. However, a lot of MLS fans in NY are reluctant to support a new team based on the bad experience with Chivas USA (which have been a full on cluster****. City would need to be very respectful of not shoving the brand down the throat of fans and, most importantly, not appearing to disrespect MLS or American soccer. If either happens the experience could end up backfiring.
It could also be a very good thing if managed properly.
