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ESPN FC  By ESPN staff

Promotion-relegation a good idea in the U.S down the road - study

The Movement is a new series from MLS that explores the growing soccer movement and soccer culture in North America.

The addition of promotion and relegation in the top professional leagues in the United States could be a major boon for the sport on several fronts, according to a business study by Deloitte, though Major League Soccer expressed concerns about the report's credibility. 

The study concludes that promotion and relegation between MLS and the lower divisions, NASL and USL, could lead to added interest in the growing U.S. soccer market, better attendance for all leagues involved and improved player development from America's youth programs and clubs.

However, the study also says that it's still too early to consider such a system in the U.S. until some important questions are answered.

Deloitte, a consulting firm, was commissioned to create the study by Silva International Investments, led by Riccardo Silva, who also owns Miami FC, a club in the second-tier NASL that currently has no path to move into the top division, as defined by U.S. Soccer.

MLS, whose commissioner Don Garber said this month he doesn't expect to see promotion-relegation incorporated into the league, cautioned that the report was not fully independent.

"The report was paid for by an owner of an NASL club who has a vested interest in promotion. I think that that causes a series of questions about it's credibility," MLS deputy commissioner Mark Abbott told ESPN FC.

Dan Jones, the author of the report and the head of the Sport Business Group at Deloitte said that Silva and his companies had no say in the content of the report.

"It's an independent report in as much as the authors of the report had full editorial control over what was written," Jones told ESPN FC. "It's not the case that we were told what to write or that it was forced or that Silva International had any type of editorial control."

According to the study, with soccer interest on the rise in the U.S., a promotion-relegation system -- inclusive of all of the top leagues in the country -- could further stimulate the growth of the sport and benefit fans as well as provide greater commercial opportunities and revenue streams. 

Fans are moderately in favor of the idea, according to a poll used in the study that questioned more than 1,000 soccer fans in the U.S. The results showed that 51 percent of the respondents liked the idea of promotion and relegation, while only six percent were against it.

The two-time defending NASL champion New York Cosmos have no path to compete for a top-tier league title.

"The current closed system has served MLS well in its early years, but as it matures it is reaching member capacity, preventing further expansion," Jones said in the study.

"Other challenges facing the current structure include growing fan interest in overseas leagues such as the English Premier League and a stagnation in the number of players annually registered with U.S. Youth Soccer. The number of registered players has barely risen since 2000 despite vastly increased rates of participation in high schools."

In explaining his preference for a closed system, Garber has previously cited the success of other American leagues like the NFL, NHL and NBA that thrive without a set-up akin to what is seen in the top flights of European football.

"We play in a country where the major leagues are really successful. There is no promotion and relegation in hockey and basketball and they work really well. It is not happening in MLS any time soon," Garber said.

However, former U.S. national team manager Jurgen Klinsmann, who was fired on Monday, said he thinks such a system could be great for soccer in the country.

In June 2015, Klinsmann said: "This thrill of the relegation battle is non-existent in the U.S. league. The risk for club investors to all of a sudden play in the second league would be too high. But the sporting side would benefit from it. Our players from Europe know that. That furthers our national team. Something is at stake week in, week out. Be it at the top or at the bottom, you always have to perform."

The study also cites numerous risks involved with the promotion and relegation system, including the possibility of a watered-down product at the high end, inadequate venues for smaller clubs that earn promotion and a perceived slight on behalf of long-term investors who may have thought they were buying into a club that would always be playing in America's top flight.

The study concludes by saying that while a system of promotion and relegation is certainly the optimal route for continued growth of the club game in the U.S., it is still too early to move in that direction.

The top leagues must first establish the ideal number of teams that would play in each league, ensure that second-tier teams were operating at a level worthy of top-flight inclusion if promoted and comfort investors in MLS, who may be concerned about the financial implications to their investments that are implicit in relegation.

MLSsoccer.com's Armchair Analyst Matt Doyle looks at what Montreal needs to do to break down Toronto's new formation.

Abbott told ESPN FC that many factors beyond on-field performance must be considered when deciding which teams should play in the top flight.

"[The study] basically ignored what I think is the most important aspect of what has driven growth and continues to drive growth of pro soccer in the U.S. and Canada, which is investment of hundreds of millions and in some cases billions of dollars in a variety of different aspects, including infrastructure like stadiums, player development, marketing, digital content, broadcast production -- all of those things are what are driving fan interest.

"The NASL's proposal on promotion focuses only on who wins the Division Two league. It doesn't incentivise those investments, and could actually discourage them. What community would be prepared to enter into a public-private partnership on a $150 million stadium if they knew their club could be relegated before that stadium even opened?"

But Jones says the heavy American investment in foreign teams in recent years shows some owner are willing to accept the risk or relegation.

"U.S. investors invested recently in Crystal Palace and Swansea City in England, clubs for which relegation is a clear and present danger," Jones said. "So the idea that there is no appetite among potential American investors for that kind of risk just doesn't ring true to me."

The U.S. Soccer Federation is responsible for setting the tier status of each league, which operate independently from one another, though many MLS clubs have their own agreements with the third-tier USL. Last year, the NASL protested reported guidelines for top-flight status that it felt violated antitrust laws, though it later dropped plans for a formal legal challenge.

"There are potentially some benefits to be derived from using relegation and promotion. But there are also some different challenges and risks that need to be managed," Jones said.

"The devil is in the detail, of course. We're not saying it needs to be introduced right now. What were saying is there should be a debate on this topic and that debate should happen immediately."

ESPN FC's Doug McIntyre contributed to this report.

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