I've seen this in action for several teams since Cincinnati joined the AFL in the mid-60s. There is no set-in-stone formula, as it was done a bit differently each time. For example, JAX + CAR seemed to have a more handsome setup than prior teams.
Division assignments are done by a NFL committee. There have been some strange ones in the past. for example, Tampa was scheduled to play one season in the AFC and the remaining seasons in the NFC. (opposite SEA)
Player allocation are done by the expansion teams selection of "unprotected" players for the prior seasons roster. I believe that teams commonly protected 28 or 30 players. Then after any of their players were taken in the expansion draft, they would then protect another several (2 or 3?) additional players. Also, there was a limit of players (3 in 1976 and afterwards) that teams could lose. What normally happened was that older and more overpaid players were unprotected. I can recall that senior LB Mike Curtis Colts was the Seahawks fitrst pick.
Expansion teams also were commonly given the first selection of each rookie draft. They also had required selections - Houston and Cleveland were required to draft miore than 30 players in the expansion draft or its picks must equal about 40 percent of its salary cap total for the prior season.
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I just found this. Here are some of the rules that applied to the Texans 2002 expansion draft.
1. The Texans must selected between 30 to 42 players or use 38 percent of their $71.7 million cap -- $27.2 million -- of their 2002 salary cap.
2. The Texans will have three minutes to select a player starting at 3 p.m. ET. An existing team has two minutes to pull back a player from their remaining list. If a second player is taken, the existing team can pull back its remaining two players.
3. The Texans are not permitted to selected a player from a team and trade the player back to that club.
4. The Texans assume the contract of the players they select. They inherit all the future prorations of their signing bonuses, any guarantees and any other terms of the deal.
5. The Texans must have 38 percent of their cap tied up on the roster on July 15. After June 1, the minimum salaries of all of those players are guaranteed.
6. If the Texans cut an expansion list selection and he re-signs with his old team, the existing team assumes all the signing bonus proration.
7. Any veteran selected by the Texans receives a $10,000 bonus from the team that will not count against the cap.
8. Any veteran player selected by the Texans will receiver a $20,000 bonus for reporting to training camp, but that won't count against the team's cap.
9. Any veteran player who makes the Texans active roster during the regular season receives a $30,000 bonus that doesn't count against the team's cap.
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