Why Promotion and Relegation is Overrated and a Closed System is Far Superior

The sentimental idea behind promotion and relegation seems fair, good-natured, and based upon a system of meritocracy. In practice, this is a complete fallacy and the stark reality is that it encourages and rewards unscrupulous behavior at the detrimental health of top professional leagues around the world.

I want to start off by saying that I am a fan of promotion and relegation. What soccer fan doesn’t enjoy the Cinderella story of Leicester City’s rise from the third tier to Premier League Champions? Who doesn’t appreciate the added pressure of teams fighting off relegation and the thrill of teams being rewarded with promotion? I believe there is a place for it in both amateur and certain professional levels where it is at times a better fit.

However, as you begin to advance the levels, the worse it becomes for teams and the sport. The drawbacks begin to incrementally outweigh the benefits as you advance up the soccer pyramid and is inversely proportional to the money that is potentially at stake. At the highest level of professional sports a closed system such as those found in North American sports leagues is superior to a promotion-relegation system. Here are the three main reasons why a closed system is better overall at the top level.

More Competitive Balance

All of the top European football leagues play under promotion and relegation systems. While it does promote strong competitive play, the end result is that the leagues end up severely unbalanced. This is glaringly obvious when looking at the history of past league champions.

England’s Premier League has only had seven different champions in the 28 seasons since its inception in 1992. Outside of Leicester City and Blackburn Rovers, the “big six” (minus Tottenham) hold the rest of the titles. In any given year, these six clubs have the only realistic odds of winning the title.

The imbalance gets even worse when looking at other top leagues, most notably Spain’s La Liga and Germany’s Bundesliga. La Liga fans are riveted in their seats year after year wondering which team will be the surprise winner — Real Madrid or FC Barcelona. Either one or the other has won every single championship but once in the last 16 years. In Bundesliga, Bayern Munich has won the league title the last eight years in a row. How suspenseful is that?

Compare that with MLS which has had 14 different teams win since the league was formed in 1996. I’m not comparing talent or skill level between MLS and the aforementioned leagues — just the competitive balance. It cannot be ignored that these top leagues with promotion-relegation create a severe imbalance and separation between the few elite teams and the rest of the league.

chelsea fc

Closed system leagues like MLS and the NBA have restrictions in place such as a salary cap and a player draft that help promote league parity. Compared to the Premier League, the NBA has had 11 different champions in the last 28 years. This makes for added excitement with the increased possibility of more teams having a chance at a championship. A closed system also does not impact the ceiling of a league’s skill level it hopes to achieve.

Better Financial Health

Teams that play in closed system leagues are infinitely better off financially. When looking at the most valuable sports franchises in the world, the top five are in the United States playing in closed league systems.  They also make up 17 out of the top 20.

  1. Dallas Cowboys (NFL)
  2. New York Yankees (MLB)
  3. New York Knicks (NBA)
  4. Los Angeles Lakers (NBA)
  5. Golden State Warriors (NBA)

Now contrast that with the top European clubs who are notorious for having a host of financial problems and crushing debt. The competitive football landscape of promotion and relegation is littered with hosts of teams facing financial problems. Top teams like FC Barcelona, Real Madrid, and Manchester United all have nine-figure debts.

Chelsea is also notorious for having a tumultuous financial record despite having a Russian billionaire owner in Roman Abramovich. Over the course of his 15 years as team owner, Abramovich has steadfastly bankrolled the team. Although Chelsea claims a zero debt sheet, they still owe the team owner an outstanding loan of £1.125 billion.

It’s also not a secret that most teams that are promoted are often relegated back down soon after. These newly promoted teams are often spending exorbitant amounts in order to stay competitive. This is done with the hope of increased winning but at the sake of their financial health.

The same is also happening with other teams on the lower end who are trying to stave off relegation. Teams who are relegated from the top level often face financial ruin and are willing to overspend in order to avoid such a fate. Although relegated teams receive “parachute payments” as a mitigation of sorts, the larger picture is that these large payments to lower division teams cause additional financial burden to the leagues that pay them.

Can’t Simply Buy a Championship

It’s a pretty well known fact that money buys championships in promotion and relegation system leagues. Consider the case of Abramovich, who completed a £140 million takeover of Chelsea in 2003. After infusing the team with over £1 billion and accruing the best talent around, the club was Premier League champions the following year.

All of the winningest teams throughout Europe typically have the highest payroll and overall expenditures in their respective leagues. The simple formula is to pay the most for the best players and win the championship (with rare exceptions such as Leicester City in 2016 despite 5,000 to 1 odds). It’s as formulaic and repetitive as the list of the history of champions would suggest.

el clasico

In a closed system this does not take place as the system will not allow it. All of the teams operate under the same salary cap structure and cannot simply outspend everyone else in order to win. This equates to a much more level playing field where money is not the deciding factor.

As a result, the coaching, front office, and team culture play a much more prominent role in closed system leagues. This in turn provides more complexity and an interesting dynamic beyond seeing which team spent the most to predictably end up winning the title.

To still think that a promotion and relegation system rewards meritocracy and gives the smaller teams a fair chance is woefully naive. It’s painfully obvious that while it’s good in theory, what actually occurs is a few teams at the top outspend everyone else to the detriment of all. Egregious spending by some causes others to act in kind causing financial peril to the group at large. And still, only a predictable few ever end up winning the championship year after year.

Lastly, teams that end towards the bottom and yet have no fear of being relegated in a closed system is a fair criticism. However, the additional thrill of seeing teams fight against being relegated really affects only the bottom three to five teams. The rest in the middle of the pack have no chance of winning the championship or being relegated. I’d argue that having more than just a handful of teams potentially winning a championship outweighs the bonus of seeing a few teams fight against relegation.

14 COMMENTS

  1. I appreciate the take but what if you don’t care about parody and what if you don’t care about the financial burden of millionaires. Parody is “more fair” but it also creates boredom because every year there’s a different champion and it starts to feel random as hell. Having a top-spending club with a stacked team isn’t boring. It’s interesting to watch super teams play and win championships. Fans love dynasties as much as we complain about them. Dynasties also create the underdog dynamic and we love to see if smaller clubs can compete with larger clubs and knock off the champs. Plus, soccer is a sport designed to help the underdog because scoring is so difficult anyway. The MLS doesn’t allow super teams to be created and that’s what’s boring. Each team barely has one guy you can recognize. You don’t watch soccer for parody, you watch to see the top players compete and entertain. Do you tune in to the EPL just to see Burnley play Sheffield because it might be a close match or would you rather watch Man Utd play Man City? Watching filthy rich people spend a bunch of their blood money on talent isn’t my financial burden but I love these sociopaths going for it cuz a whole team of superstars is what I wanna watch.

    • There’s a lot to unpack here so let me try to address them point by point.

      – You can have high-spending and stacked teams without promotion/relegation. That’s the system the NBA and the other major sports all operate under. Dynasties and smaller teams competing against and potentially knocking off champs all regularly occur under closed system leagues. The difference is that pro-rel systems without a salary cap structure make it all about the money. Theoretically, any billionaire could technically buy any team and create a championship team based primarily on financial prowess alone – e.g. Chelsea. What ends up happening is then it becomes solely about which billionaire is willing to outspend another billionaire. That’s why UEFA instituted Financial Fair Play Regulations to limit overspending within a framework i.e. AFC Bournemouth.

      – All of the things you mentioned about what you enjoy seeing is not limited to pro-rel leagues. However, pro-rel leagues creates a further divide between the “haves” and the “have-nots”. Imagine an NBA where it’s only the Lakers or Celtics who win the title every single year (Real Madrid/Barcelona). The Chicago titles with Michael Jordan would have never happened b/c he would’ve been snatched up by the Lakers or Celtics shortly after. Rather than seeing Bayern Munich win 8 years in a row (or PSG 8 times in 9 years), it would be more entertaining to see some other teams have a chance at winning that isn’t dictated solely by finance.

      You don’t get to appreciate the dynamics that someone like Pat Riley brings to an organization. He’s a flat out winner because of the knowledge, discipline and team culture that he brings. He doesn’t win titles because he has the most money to spend. All NBA teams have the same lucrative budget. It then becomes more about wits, execution and player management. PSG doesn’t win Ligue 1 every year because they did anything spectacular. They just outspend everyone else by a large margin.

      – MLS not having super teams isn’t because they play in a closed system. It’s because their salary cap is too low and there isn’t enough money being spent. No one is advocating complete parity amongst every team in the league under a restrictive salary cap. The question you pose shouldn’t be, “Do you tune in to the EPL just to see Burnley play Sheffield because it might be a close match or would you rather watch Man Utd play Man City?” It should be, “Would you prefer to see the same five teams win every year b/c they outspend everyone else or would you like a somewhat larger pool of champions that isn’t dictated solely by finance?”

      – I don’t care how filthy rich people spend their money or if they face financial burdens either. But I do care if their rampant spending further damages the league they play in by causing a chasm between them and everyone else based on their ability and willingness to spend recklessly. I do care if their excessive spending at the sole pursuit of success harms the team and/or league in the long term. I wish superstars had more connection and history and would build around their home team. The financial implications of pro-rel leagues dictate that players will most likely only play on the same, repetitive teams based on financial decisions.

  2. I disagree that money automatically buys you championships. We have to separate domestic leagues and their titles between the Champions League as well. That’s the ultimate trophy in club soccer and that’s a trophy you have to spend ungodly amounts of money to win and even after spending millions and millions and millions of dollars nothing is guaranteed because the competition is so hard to win.

    Chelsea spent all that money and they’re 6th in the EPL behind West Ham. PSG spent all that money and they’re 3rd in the French league at the moment. Nothing is guaranteed in soccer because it’s a really difficult sport to dominate (unlike the American sports of basketball and football where spending a bunch of money on the top players could essentially guarantee you a championship).

    Imagine an NBA where it’s only the Lakers or Celtics who win the title every single year? I can imagine that. It literally is what happened. The Celtics dominated the ’60s. The Lakers dominated the ’70s. The Bulls dominated the ’90s. And so what? The league is still amazing. Lebron has dominated recent years and we love watching him compete.

    Pat Riley didn’t win all those championships for some small market like Milwaukee or Charlotte, he was in LA, New York, and then Miami. The dude basically avoids small markets like it’s his job. And when you look at soccer – you still need a good brain like Pat Riley to help your team compete, especially in the Champions League. It’s not enough to just spend a bunch of money.

    Would I prefer to see the same five teams win every year b/c they outspend everyone else or would I like a somewhat larger pool of champions that isn’t dictated solely by finance? Well, only 1 team can technically win at the end of the year and I think 5 teams competing for a championship domestically is still a lot. I love the EPL, it’s been the same 5 or 6 teams for years now and it’s still a great league. And as great as those clubs are – nothing is guaranteed when it comes to the Champions League, and I don’t think their excessive spending harms the team or the league.

    I wish superstars had more connection and would build around their home team too but the MLS has a stupid draft that guarantees that won’t happen. You can grow up in Atlanta and become a stud in Atlanta and then get drafted by Portland. How much sense does that make? You don’t get to go to the team who will pay you the most money. Your hometown doesn’t get to make you an offer and you don’t get to choose. Another stupid MLS policy that’s more about parity than it is common sense soccer thinking and their obsession with parity actively makes the league worse.

    “The financial implications of pro-rel leagues dictate that players will most likely only play on the same, repetitive teams based on financial decisions.” Yeah, this is the way the world works. But the same repetitive teams is still a lot more teams than I think you’re giving credit to. There’s so many good clubs in Europe spending so much money. But at a certain point, like the Champions League, it isn’t JUST about money – it’s about everything (talent, coaching, luck, management, intangibles, etc) and it’s really hard to win.

  3. Wait, I thought you were saying you don’t like parity and you want to watch dynasties and superteams. My counter-point to argument that was those things are not limited to pro-rel leagues and you can still have that. But an added benefit to the closed leagues with salary caps is that you get a better mix of dynasty runs instead of the same teams winning over and over again. Now you’re saying you love the NBA dynasties (closed league system). The original point I made was that the dynasty runs of teams is a wider mix and not primarily determined by finance.

    NBA Champions past 10 years: Lakers, Raptors, Warriors, Warriors, Cavaliers, Warriors, Spurs, Heat, Heat, Mavericks.
    La Liga: Real Madrid, Barcelona, Barcelona, Real Madrid, Barcelona, Barcelona, Atletico, Barcelona, Real Madrid, Barcelona.
    Bundesliga: FC Bayern, FC Bayern, FC Bayern, FC Bayern, FC Bayern, FC Bayern, FC Bayern, FC Bayern, Borussia, Borussia.
    Ligue 1: PSG, PSG, PSG, Monaco, PSG, PSG, PSG, PSG, Montpellier, Lille
    EPL: Liverpool, Man City, Man City, Chelsea, Leicester City, Chelsea, Man City, Man U, Man City, Man U

    Money doesn’t AUTOMATICALLY buy you championships b/c nothing is guaranteed. But there is an absolute direct correlation to money spent and championships in the European pro/rel leagues. Look at this chart here for money spent in EPL and it’s obvious: https://sg.finance.yahoo.com/news/much-did-leicester-city-spent-023048434.html

    Pat Riley avoiding small markets is by his lifestyle choice. It has zero to do with money spent on the teams he runs unlike in pro/rel leagues. All NBA teams pay approximately the same amount regardless if you’re Milwaukee, Portland or Los Angeles. Small market and big market teams pay within the same ballpark of salaries every year. http://www.basketballinsiders.com/nba-team-salaries-at-a-glance/

    “unlike the American sports of basketball and football where spending a bunch of money on the top players could essentially guarantee you a championship”. I don’t understand this logic and it’s false. All NFL and NBA teams have an equal and fixed salary cap. You can’t just spend a bunch of money on the top player b/c then you have nothing left for the rest of the team. In addition, NBA has max contracts. All teams can and do offeer the same maximum salary to the top players (outside of home team discount).

    “and I don’t think their excessive spending harms the team or the league.”

    Excessive spending definitely hurts teams and leagues. List of top teams with staggering debt: https://www.dailystar.co.uk/sport/football/uefa-european-clubs-most-debt-16840963

    Article indicating that Premier League and English Football will essentially need a government bailout:
    https://global.espn.com/football/english-premier-league/story/4203143/premier-leagueenglish-football-facing-financial-reckoning-despite-billion-pound-transfer-window

  4. I love the conversation. But isn’t it true that big money will buy success/ championships in either monopoly leagues or pro/rel? Look at MLB. I’m a diehard Rays fan, don’t get me wrong, but they’re an outlier. The big money teams tend to be in the big cities – NY, LA, London, Munich, Madrid. For fans in those cities and of those few teams, it doesn’t really matter whether it’s monopoly leagues or pro/rel. Isn’t this really about everybody else in smaller cities and teams below the top tier? Isn’t this also about the integrity of competition and rewarding merit at all levels, not just the top? I would much rather have that late season football game between my Panthers and another also-ran be about winning and striving to improve, than about the proverbial draft position. American monopoly leagues oddly reward un-American values of rewarding losing. Why shouldn’t every sports league have its Leicester City and why shouldn’t Erie, PA aspire to be Leicester rather than being eternally doomed to driving to Pittsburgh to watch a poor Pirate franchise that’s no better than someTriple A team playing a meaningless late season game they’d rather lose so they can improve their draft position?

    I really think this argument is about “everybody else,” and I think that world would be a lot more fun with pro/rel. This is no parody!

    • My apologies, my dad will find a way to work the Rays into any conversation but I appreciate the point he’s making regardless lol. Pro/rel would make the MLS way more exciting in the regular season and the league desperately needs to be more exciting. The TV ratings are awful because there’s not enough intensity in the games and pro/rel would add intensity instead of the current closed league model which does reward losing (in the form of draft picks).

      It seems like we both support raising the salary cap and paying more for the players. And I agree with you that if the league got rid of a salary cap and became pro/rel it would inevitably lead to a couple clubs dominating over time but I just don’t see that as a problem. I see that as the natural order of things.

      Yes, Bayern wins the German league year after year but they are never guaranteed the Champions League trophy – and that’s something they’re really after. A lot of other clubs are competing for different things and I think that’s great, especially in a pro/rel system, because different clubs will have different goals and “success” will mean something different for each one. For some clubs it will be simply staying in the top league, for other clubs it will be making the top league, but linking up all the divisions allows for everyone to have a chance at the top league and I think that’s great too.

      You say you think a wider mix of dynasties is a good thing but at the same time you support a closed league which limits the number of teams that could potentially become dynasties. If you want a wide mix, why not the whole country?

      Dynasty runs are also predictably in major market cities: Boston, LA, New York, etc. I think the MLS is lame because they’ve never even had ONE dynasty. The emphasis on parity is so much that the champion rarely repeats. To this day no MLS team has ever won 3 championships back to back to back. Is that the sign of a good league? The TV ratings and attendance numbers would say otherwise.

      Teams having staggering debt isn’t an issue either because the teams are worth so much as international brands that they could liquidate at any moment and still make money. There are also plenty of American sports teams in debt and that’s not an issue either because they will make money in the future so they can run debt for however long they need. American teams in closed leagues aren’t somehow debt-avoidant. The main difference is everyone isn’t allowed access to the league by being able to play their way into the top division. This makes the leagues more boring because some teams aren’t good and don’t care about not being good.

      If the NFL and NBA didn’t have a salary cap I do think it would end up looking similar to the European soccer leagues in that there would likely be one super team in LA and another in NYC and we’d watch them compete year after year. I do understand the hesitancy to embrace this as a good thing but I also would argue that that’s what happens in a closed league system as well. This year in the NBA, LA has 2 super teams and Brooklyn now has another. It’s not random – it’s our 2 biggest market cities and that’s where the megastars want to be.

      Pro/rel would make the regular season of the MLS more interesting and it would give everyone access to the top league and that would be dope. Salary cap or no salary cap, pro/rel is a fun idea for a league that needs help.

      • In reply to Jeremy.

        I agree with a lot of your points. Especially that pro/rel would make MLS more interesting and paying MLS players more with a higher salary cap. The rest we should tackle over a nice night of good conversation with cognac and cigars maybe with some of the other fellas. Let’s make it happen soon.

        Also, never apologize for your dad’s die hard sports affiliation. Even if it’s the Rays. Haha.

    • In reply to Carl Rist.

      ” But isn’t it true that big money will buy success/ championships in either monopoly leagues or pro/rel? Look at MLB.” Let’s not leave it to conjecture.
      World Series Champions past 10 years: Dodgers, Nationals, Red Sox, Astros, Cubs, Royals, Giants, Red Sox, Giants, Cardinals.

      That seems to be a good mix of teams from big and medium cities with budgets accordingly. Do I really need to list out the winners from La Liga, Ligue 1, Bundesliga, etc. again…?

      “Why shouldn’t every sports league have its Leicester City and why shouldn’t Erie, PA aspire to be Leicester rather than being eternally doomed to driving to Pittsburgh to watch a poor Pirate franchise that’s no better than someTriple A team playing a meaningless late season game they’d rather lose so they can improve their draft position?”

      I agree with your sentiment and it’s good in theory but not in practice – at least not at the highest levels with large money at stake. The notion of small teams being able organically rise through the ranks based on grit and gumption is a fairytale. Leicester City is a great story and a rare exception – however they still spent nearly $100 million that year. It’s just surprising that they didn’t spend the usual $150-400 million of typical champions.

      https://sg.finance.yahoo.com/news/much-did-leicester-city-spent-023048434.html

      I think it’s great you follow and support your son’s work! Thank you for reading and commenting.

  5. Good article John, however I do not support because I want a level playing field. At the professional level, I want to see my team win consistently. I unequivocally disagree that it makes the league “more competitively balanced” we have seen too many teams in the NBA (sizers), NFL (browns,jets) tank their seasons so that they can obtain higher draft picks. Where I do agree with you is for the financial miss management of mid to bottom tier and teams in the European league, a better system of checks and balances needs to be implemented.

    • Hey Stephen, hope you’re doing well. While I do support the idea of pro/rel, the quaint notion of it being a level playing field and providing an equal opportunity for all teams to rise to the top is from a bygone era. This no longer exists at the highest levels when teams are now owned by Russian, Chinese billionaires and princes from oil states with near unlimited budgets to spend at their whim. That is actually the opposite of a “level playing field”.

      I don’t disagree that certain teams in the past of closed leagues haven’t tried to tank their seasons for higher draft picks. However, tanking seasons by some teams does not mean the leagues are not more competitively balanced than pro/rel leagues. It’s not a matter of debate regarding champions of closed leagues vs pro/rel leagues. Simply look at the list of champions of North American closed leagues vs European pro/rel leagues. It’s obvious and I listed some of them above already. Go through the past 10-15 years of MLB, NBA, MLS and NFL champions and compare against La Liga, EPL, Ligue 1 and Bundesliga champions. It’s laughable really.

      Also, with closed leagues it’s much easier to implement reactionary measures against unwanted behavior such as what you mentioned. In response to the Sixers, the NBA already implemented changes in the draft starting from 2019 to disincentivize high-loss seasons. The NBA leveled the odds of getting the top pick and increasing the chances of the worst teams picking receiving later draft picks.

      Lastly, I’ll leave you with your quote of, “At the professional level, I want to see my team win consistently.” So if your team is a traditionally bottom-tier team that doesn’t pour billions into the team to compete against the billionaire owners, they will never win. Not because of anything other than the fact that wins are primarily determined by finances and it’s not a level playing field.

      Appreciate your feedback.

  6. This article isn’t about promotion and relegation. It’s about noblesse oblige.

    Nowhere on earth do lower division clubs collapse at the rate they do right here in the land of closed leagues.

    When Mexico suspended promotion and relegation, lower division salaries plunged by 70%.

    In the third division of English soccer, salaries average around $5000 a week. In AAA baseball, salaries average about $500 a week.

    In response to a question about rich owners buying championships, Johan Cruyff said he’d never seen a bag of money score a goal. Here in the USA, a tiny minority of closed sports leagues team steal bags of money from lower division clubs and players.

    Extolling the virtues of parity via financial micromanagement of a privileged few ignores the financial suffocation of the many.

    That’s an argument for noblesse oblige.

    • Noblesse oblige – the idea that people from a noble ancestry are obligated to act honorably and generously to others. What a quaint notion. However, I do support pro/rel and stated that there is still a room and place for it at the lower levels.

      As owner of one of LA’s most popular soccer leagues since 2014, I also implemented promotion and relegation after much effort. I do believe in the virtue and idea of it and see its many benefits. However, pro/rel has positives and negatives and the drawbacks begin to incrementally outweigh the benefits as you advance up the soccer pyramid and is inversely proportional to the money that is potentially at stake. So at the very top of the pyramid when there’s huge amounts at stake, the benefits of pro/rel have largely been displaced by the negatives.

      With all due respect to Johan Cruyff, money buys championships in pro/rel leagues. That’s why the top leagues in Europe are all won by the same teams repeatedly who also spend the most. That’s not an opinion, that’s a fact.

      “Here in the USA, a tiny minority of closed sports leagues team steal bags of money from lower division clubs and players.” Can you expand on that? I don’t see what you mean by this.

      Appreciate your feedback.

  7. Replying to John Jay Lee:

    Thanks, John. Jeremy just mentioned that you replied. I’m still unconvinced that a closed system would create more competitive balance as you suggest. Continuing the MLB example, yes, the ultimate WS champion does include some variety in large and small market teams. But again, my point is about overall competitiveness among all teams. Looking at just who wins the championship is too narrow a slice. Check out this article from a Georgetown author who goes back 20 years and shows how closely a team’s performance tracks payroll:
    https://georgetownvoice.com/2020/02/18/the-mlb-has-a-competitive-balance-issue-and-its-related-to-money-and-payroll-inequalities/

    I’m not saying that pro/rel wouldn’t also produce stratification at the top, but just that there is a lot of dead wood in the middle/bottom of closed system leagues. Some teams like the Rays (there I go again) will find a way around small money, but why should the rest be rewarded continually with high draft picks and monopoly rights to a franchise? The new entrants and exits in a pro/rel system would bring energy and excitement to the stagnation common to the lower half of most US pro leagues.

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