MLS Doesn't Want Relegation System, No Matter How Much Money They Get Offered
By Jason Lisk
The promotion/relegation system is the dominant form of league structure throughout world football. It’s also a system that is more capitalistic in nature; the strongest survive and advance while bad teams are sent down and do not continue to reap the rewards of profitability at the highest levels.
It’s not, however, the preferred form in the United States within any sports league, including the MLS. Leagues in America have a closed system where you buy-in as an owner, and ownership is fairly safe. It’s a more socialistic system where clubs share revenues from television deals, have common drafts to distribute talent and control costs, and limit outsiders and risk.
In the European model, franchises like the Detroit Lions (one playoff win since 1957), Cleveland Browns (15 years of suckitude), and the recent iterations of the Philadelphia 76ers would not exist at the highest level for long.
According to John Ourand of Sports Business Daily, Major League Soccer was offered a substantial increase in television rights fees, an offer that would have nearly quadrupled the rights fees more than six years before the next contract. That offer was contingent on the league going to a promotion/relegation system. It was rejected by MLS Commissioner Don Garber.
Why would MLS do that? Well, it’s because you cannot sell owners on paying an exclusive franchise fee to join a closed league, and then let others in at the same time. As Ourand notes, MLS is seeking $150 million as an expansion fee for future candidates. That’s going to be hard to collect if owners know they could be relegated to a second tier. The promotion/relegation system promotes competition; if you pay $150 million, you want to be part of the club.
The offer by MP & Silva is not altruistic. Founding partner Riccardo Silva has a financial interest, as a co-owner of Miami FC, the top team in the NASL. The proposed plan would create a tier system using teams currently in MLS, plus NASL and USL. His franchise would presumably move up quickly into a top league.
Silva wrote in a memo to MLS:
"“I believe that MLS would be the major beneficiaries of an open, meritocratic system because it would stimulate greater fan interest, excitement, quality and engagement in the domestic game. As a result, greater commercial revenues would flow not just to MLS and MLS club owners but also to all tiers of the U.S. soccer pyramid.”"
On that point, Silva is likely not wrong. There are passionate local fan bases around the country, including in some markets that just recently got MLS teams, and others that do not have one (Cincinnati in the USL and Miami in the NASL, for example). The MLS season can seem anti-climactic, with around half the teams making the postseason, while others drift away. Relegation battles and tournaments — at the bottom of the top tier league and top of the next one — would create some drama.
But, relegation and promotion would be a sea change in the structure of MLS, which has controlled player costs and allocated many players. In a relegation system, you have further incentivized teams to compete to stay up, but as a league, would also want the top markets to be represented.
In Europe, the big clubs come from established teams and big markets: several London clubs and Manchester in England, Barcelona and Madrid in Spain, Paris in France, and Munich in Germany. Those clubs outspend others heavily to maintain superiority.
This year in MLS, teams from Washington, D.C., Los Angeles, and New England are in the bottom five in points. Last year, Chicago had the fewest points in the league and would have been relegated. Over the last five seasons (since start of 2013), the four lowest point totals in MLS among teams in existence the whole time belong to Chicago, D.C., Philadelphia, and San Jose (Bay Area). Over that time, there is no correlation between market size and record.
Now, that’s great if you are in a mid-sized market outside the top 10, like Kansas City or Portland or Seattle. It resembles what we see in the NFL, where teams in Green Bay and Pittsburgh can be among the top teams annually.
For international appeal and larger buzz outside regional pockets, though, having big names in big markets drives interest. The financials can probably be worked out — there can be methods to have new members pay in once relegated, or refund moneys to franchises. The larger question is if owners want to risk a relegation system, and whether an American audience is comfortable with what that brings.