Column: Relegation In US Sports Leagues A Tough SellAugust 3, 2017

Column: Relegation In US Sports Leagues A Tough SellFour billion dollars. That’s a significant sum in virtually any context, unless we’re talking about the federal budget. And yet Major League Soccer (MLS) said “No thanks” to an offer that would have netted the League that amount over a 10-year period.

Riccardo Silva, founder of MP & Silva, an international sports media company, made the proposal in exchange for MLS’s worldwide media rights. But the offer came with a condition. MLS would have been required to adopt the promotion and relegation system that is utilized in European sports leagues. Simply stated, pro/rel is a process where teams “transfer” between two leagues or divisions based on their performance during the previous season. The best teams in the lower league/division are “promoted” to the higher level for the next season, and the worst teams in the higher league/division are “relegated” to the lower level for the following year.

The system has obvious benefits to fans and players. Under the pro/rel format, teams tend to go all out to win. If such a system existed in baseball, imagine the two teams with the worst records in MLB one year relegated to Triple A the next season. The financial consequences for each team would be staggering. MLB teams receive approximately a quarter-of-a billion dollars a year from the League’s Central Fund. Triple A teams don’t share in the Central Fund.

If the Houston Astros had faced relegation to Triple A, would they have been content to finish with the worst record in baseball for three straight years, 2012-2014? That tactic netted them a bevy of high picks in the annual draft, which led to the best record in the American League this year. And Triple A teams would have as much incentive to finish first as MLB teams would have to avoid finishing last. However, adoption of a pro/rel system is only one change that would be required in baseball. Minor League teams would have to secure their own players, rather than depend on their MLB affiliates for talent.

Players would also benefit from a pro/rel system in the form of higher salaries. MLS players currently average around $300,000 while their English Premier League counterparts average ten times that amount, a function of teams’ desire to win.

Silva had an ulterior motive in making his offer. He happens to be a co-owner of Miami FC, a North American Soccer League club. The NASL is one of two leagues below the level of MLS, which means under a pro/rel system Silva’s team would be eligible for promotion to the upper league. Not so coincidentally, MLS has granted a Miami expansion franchise to a group led by former MLS star David Beckham. The group has spent years trying to put together a stadium deal and if they are successful, as expected, Silva’s team could be in jeopardy.

The benefits of Silva’s offer to MLS are less certain. The League would more than quadruple its media rights until the current contracts with its media partners expire after the 2022 season. But would expansion suitors, knowing not all teams will be guaranteed perpetual membership in the League, be willing to fork over the current minimum expansion fee of $150 million? Expansion fees currently sustain the League financially. MLS has never operated in the black, despite all the fancy new stadiums and high attendance figures. There are plans for at least four more expansion franchises, but the operating model needs to change before the League runs out of viable expansion cities.

As much fun as it is to contemplate a pro/rel system in the United States, it’s nothing more than a pipe dream. It would require teams to approve a system that would guarantee financial ruin for some of their brethren each year. While Silva’s financial offer must be tempting to MLS owners, the requirement of a pro/rel system make it a non-starter. Still, the thought of teams – and players – competing for their financial lives is every fan’s fantasy.