The promotion-relegation debate isn't dying down, so here's how it could work in the United States

The San Jose Quakes have been the worst team in MLS this season, and the Colorado Rapids haven’t been much better. How would both clubs operate if a promotion-relegation system was in play? (Getty)
The San Jose Quakes have been the worst team in MLS this season, and the Colorado Rapids haven’t been much better. How would both clubs operate if a promotion-relegation system was in play? (Getty)

For just about as long as American professional men’s soccer has been out of perpetual existential danger, the issue has been vexing. It has infatuated and infuriated in equal measure.

Promotion and relegation. Or pro-rel, in the parlance.

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A brief explanation for the uninitiated. Most everywhere in the world, but not exactly everywhere, the ceiling on your soccer team is dictated by its talent. If you gathered 11 friends, formed a team, joined a league and won enough games – while figuring out how to get a stadium and the like – you could rise to the English Premier League or Spain’s La Liga and face off with Manchester United or Lionel Messi.

That’s called an open pyramid. You begin on the lowest rung, and by earning promotion enough times you climb the levels until you’re at the top. You’re promoted to the next level, taking the place of some bottom-feeding team that is relegated down to your old spot in the lower division.

Major League Soccer is a closed league. The Kingston Stockade, say, of the fourth-tier semi-pro-ish National Premier Soccer League, can’t just win their way into MLS. You have to buy your way into the league, and entry is both highly competitive and prohibitively expensive – typically fetching a nine-figure expansion fee, not counting the cost of a mandatory, soccer-purposed stadium.

MLS, in fact, is a rare single-entity league. Which is to say that it’s actually one company, with its teams essentially functioning as satellite offices and its owners as shareholders in the entire operation with a license to operate one subsidiary club. And because of the towering cost of entry, it’s become harder and harder to simply open the league up to promotion and relegation. Because owners have paid increasingly dearly for a first division berth, and as the stakeholders in the league, it’s hardly in their interest to just give up that guarantee for the risk of relegation to a lesser circuit.

But there’s a vocal subset of the American soccer crowd that takes pro-rel as gospel, arguing that the competitive accountability of being punished for a bad season forces everyone to be better. And that the incentives of upward mobility promote best practices that redound to the benefit of the entire sport stateside. The counterargument is the impracticality of an ever-changing set of participants in the various leagues and the instability often suffered when relegated teams struggle to adjust to their new and diminished economic reality. In Europe, relegation has sometimes been less of a competitive punishment for underperforming teams than a financial death sentence.

For years, the two factions have argued about this. Or, rather, the pro-pro-rel crowd, as it were, has loudly proselytized in forums and on social media while everybody else has largely tuned it out.

You could make the argument that an open pyramid is capitalism and a closed one a sort of socialism.

And here, like in an economy, a compromise reconciling the virtues of both systems is surely possible.

For several decades, the two professional tiers in Dutch soccer had a sort of closed pro-rel system. You could be promoted and relegated between them, but there was no way of dropping down further, into the amateur circuits – or indeed of rising up from the latter. It retained a lot of the incentives, while mitigating some of the risk. It worked well, until too many of the second-tier teams ran into financial issues during the recession a decade ago and the pool of clubs became thin.

(For what it’s worth, the Dutch system was briefly opened up entirely in order to make the second tier more competitive. But very few semi-pro teams made the leap up to the professional ranks and the scheme has since been abandoned. The Dutch pyramid is effectively closed again and much of the second tier is occupied by first division reserve teams.)

Such a system could also work in the United States, where owners have deeper pockets and the sport has far more economic growth left to pursue.

If relegation were at stake, there might be a lot of consoling between Orlando City SC players like Dom Dwyer (14) and Shane O’Neill this season. (Getty)
If relegation were at stake, there might be a lot of consoling between Orlando City SC players like Dom Dwyer (14) and Shane O’Neill this season. (Getty)

What if the American professional – and nominally semi-professional – leagues consisted of two quasi-closed pyramids, consisting of MLS and the current second-tier United Soccer League? (We’ll set the once-second-tier North American Soccer League aside for now, because for all its bluster, the league is on hiatus and might not ever return.) The USL is already deeply embedded into MLS as a kind of minor league, with almost all MLS teams operating a reserve team in the 33-team USL.

What if two tiers of MLS sat above two tiers – or more – of the USL? Teams could promote and relegate within MLS and the USL, but not jump from one pyramid to the next – unless an MLS spot opened up, but we’ll get to that. Call them MLS1 and MLS2 and USL1 and USL2. Or USL3 and USL4, to avoid confusion, although that might be a harder marketing sell.

Teams would move up and down within their pyramid, MLS or USL, according to performance, creating incentives and punishments, but typically not between systems. The promoted would reap the rewards of increased visibility and revenue. The relegated might be compensated with a series of parachute-payments, like in the English system, to help ease the blow of dropping down a tier.

If, however, an MLS team wanted to be relegated voluntarily – it sounds strange, but it’s happened all over the world for all manner of odd reasons – or the league wanted to shut down an ownership group or expand, the best-performing USL teams would be first in line. If they’d consistently conformed to pre-determined competitive and business benchmarks, they could pay an expansion fee to claim the available slot in MLS2. USL2, meanwhile, could leave its doors wide open to new teams, for a modest expansion fee that would only need to cover costs to the league. That would give new teams an entry point into the system, and the prospect of a real payoff for success.

Perhaps a kind of extreme-case relegation clause could be written, whereby really terrible MLS2 teams – who have finished in the bottom-third for four out of five seasons, for instance – could be held to account by a relegation into USL1. It would probably be a hypothetical threat, but act as just enough of a deterrent to keep unambitious ownership groups honest.

The benefits, largely laid out above, would be to create added pressure to raise revenue and develop better players, both within the professional ranks and in the teams’ youth systems. Teams seeking to rise from a lower league to the USL, or jump up a level, would be best-served by nurturing their youth systems as much as possible, as it’s the most cost-efficient, if painstaking, way of improving sustainably.

A tiered system would, essentially, increase competition by forcing teams to worry not just about their peers in their own league but also the contenders in the one below it. And it would create as much drama at the bottom of the pile as at the top, with relegation battles erupting in previously low-stakes games toward the end of the season.

The downside is the increased difficulty in selling the product. It’s simply harder to get people excited about something that is explicitly second-rate. That could hit teams in the wallet – also creating more reasons to try to be good. But some of the biggest sources of revenue, like attendance and regional broadcast contracts, would likely stay about the same. Unlike countries where you might find a half-dozen professional teams within an easy drive, most pro soccer markets in the U.S. don’t offer fans an alternative if they want to see live soccer. And the regional sports networks need live content as much as ever.

How revenue-sharing would break down between the tiers is crucial. Offer second-tier teams too little and existing owners will never go along with it, or teams would, counter-productively, worry more about relegation than silverware. Give them too much and the threat of being relegated wouldn’t be as powerful as it ought to be.

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But much of the pain of an MLS owner suddenly finding himself with a second-tier team on his hands would likely be mitigated by the windfall of further expansion. Expansion fees have been a key driver of league revenue. It’s unclear how many teams currently even make money, but surely few are making significant profits. But the steady trickle of $100 million expansion fees brings in more money than even the league’s TV contracts, which are up five-fold over the last round of agreements but still stand at a comparatively puny $90 million per season.

Presently, the league has 23 active teams, with three more in the works and plans to add another two. A second tier could easily accommodate a further 12 teams, breaking the league up into two 20-team levels. From the ongoing fights for expansion slots, it is plain that there are enough interested and viable markets and ownership groups to pad the league with another dozen teams.

At a $100 million apiece, that would give existing owners at least $40 million each, making up for the possibly reduced revenue of a team suddenly cast into a new second tier. And if the point of expansion fees is to compensate for dilution in revenue-sharing, growth of the entire business would make up for the smaller cut.

Most all of the upside of an open system would be retained in this tiered, somewhat-closed scheme.

And the initial investment of the current owners, which helped start, grow and solidify the league, would be protected.

It’s a compromise.

Compromises never make anybody entirely happy. So we look forward to your hate mail.

Leander Schaerlaeckens is a Yahoo Sports soccer columnist and a sports communication lecturer at Marist College. Follow him on Twitter @LeanderAlphabet.

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