A second Sydney AFL team may have links with Canberra and play at least three home games a season in the national capital, AFL boss Andrew Demetriou says.

The AFL and ACT government are in discussions about the likely new franchise which is expected to join the league in 2012.

"These are ongoing discussions, I don't where they will end up but they're discussions certainly worth having," Demetriou told ABC Television.

The AFL is hoping the territory government will consider upgrading Manuka Oval so that it can accommodate crowds of at least 20,000 for at least three games each season.

The ground's present limit is a tad more than 14,000. Saturday's game between the Sydney Swans and Western Bulldogs drew 12,500.

The new franchise is likely to be based in western Sydney, but not necessarily carry the area's name as a football entity.

"It'll be a team that represents the greater part of western Sydney and it may have links all the way through to Canberra", Demetriou said, adding work on branding and identity will be worked out in coming months.

Presently the ACT government pays the Western Bulldogs and Melbourne $310,000 for every game the clubs play at Manuka Oval.

But it would prefer to spend the money on a long-term association with a second Sydney club.

The new club would take 10 to 20 years to be successful in rugby league heartland, Demetriou said.

"It's a long journey and we're certainly not delusional."

The AFL needed to have clubs based in the nation's two biggest markets - western Sydney and the Gold Coast.

"All we're trying to do is give people a choice, it would be great if they followed a NRL team, an AFL team at the same time - that's what happens in Melbourne."

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