The MLS is run the same way as all North American pro-leagues (American Football, Baseball, Basketball & Hockey).
A brief explanation on waivers:
When a team wants to release a player, they need to put him on waivers. When a player is put on waivers, all the other teams are notified and have an option of putting in a claim for him. If only 1 team puts in a claim, they will automatically receive the player. However, if more than one team puts in a claim, the team lowest in the standing will get him. If it is the offseason, the team with the worst record from the previous year would win the claim.
If no one claims the player, he will become a free agent.
I hope this helps someone. | 
