Here's how I would do it (if I had 1 Expansion Team).
Incumbent Teams (IT) all protect 1 player.
Expansion Team (ET) picks one keeper off of 1 IT, Team A.
Team A fills out his remaining keepers.
All other IT's protect a second player.
ET picks one keeper of 1 IT, Team B.
Team B fills out his remaining keepers.
And then so on and so forth. The upshot is that the Expansion Team can't pick more than 1 guy who the existing teams were going to protect, but he doesn't get completely hosed, either.
If you were adding multiple Expansion Teams, I would do it.....
All IT's protect 1 player.
ET #1 selects a player, off of Team A.
Team A protects a second player.
ET #2 selects a player, off of Team B.
Team B protects a second player.
All IT's protect an additional player (bringing the total up to 3 for Team A and Team B, and 2 for everybody else).
Keep doing this until everyone has all their keepers.
The ideal, though, is that you don't have any Expansion Teams and the new owners just take over existing teams.
0-3 to 4-3. Worst choke in the history of baseball. Enough said.