Miami FC and Kingston Stockade FC suit to create a relegation system in the MLS shut down by CAS

Some of the biggest and most popular soccer leagues in the world all have one thing in common: Promotion and Relegation. Let’s take one of my favorite leagues to follow – the English Premier League (EPL). The EPL is the top division in English Football and is akin to the MLS. It is referred to as the Top Flight and consists of 20 Clubs. Then follows three divisions which collectively are referred to as the English Football League. The English Football League is divided into three divisions with twenty-four clubs in each division. The hierarchy of English Football League is as follows: English Football League Championship, then the English Football League One and then the English Football League Two. The tiers go even deeper; however, they would be considered amateur leagues.

Three teams from the English Football League Championship are promoted (the top two teams are automatically promoted to the Premier League, while the following four compete in playoffs for the final spot). Consequently, the bottom three teams in the Premier League are relegated to the English Football League Championship. This relegation and promotion is consistent throughout the rest of the tiers. The lower league teams always have a chance, every year, to gain promotion.

On the flipside, Major League Soccer does not have promotion and relegation even though the United States Soccer Federation (USSF) has multiple professional leagues. The MLS follows the NFL model. If you want to enter the MLS Country Club, you have to pay a fee. The fees are around 200 million dollars. This is significantly less than becoming a NFL member, however, 200 million dollars is definitely not pocket change. 

Well two teams under the jurisdiction of the USSF were not, and are not, happy with the non-relegation system in place. Miami FC and Kingston Stockade FC (collectively the “Teams”) filed a complaint in 2017 with the Court of Arbitration for Sport challenging the MLS’s non-promotion and non-relegation system. Miami and Kingston, located in the North American Soccer League and National Premier Soccer League respectively, brought a claim against FIFA, CONCACAF, and the USSF.

The USSF governs professional and amateur soccer in the United States and is a member of FIFA. Since the United States Soccer Federation is a member of FIFA, it must follow FIFA rules and regulations. In 2008, the FIFA Congress adopted Article 9 of the FIFA Regulations Governing the Application of the FIFA Statutes. It states

“A club’s entitlement to take part in a domestic league championship shall depend principally on sporting merit. A club shall qualify for a domestic league championship by remaining in a certain division or by being promoted or relegated to another at the end of a season.”

The Teams argued USSF violated Article 9 because

“by operating the MLS (or allowing the MLS to operate) as a ‘closed league’, deprive[s] the [Teams] of any (realistic) chance to “climb the ladder”, as teams from lower divisions have no chance to gain access to the MLS through sporting merit. Consequently, teams from lower divisions have de facto no realistic chance to qualify for any international club competition. The [Teams] argue that the disregard of the principle of promotion and relegation based on sporting merit has the effect of depriving the [Teams] of any right to access the USA, CONCACAF and FIFA premium club markets and causes severe financial damage to the Teams.”

The Teams in essence argued the current system prevents teams from reaching the MLS through sport merit, i.e. receiving enough points to be promoted by competing against and with other teams, and the current system prevents financial gain because the teams cannot compete in the big competitions like the Concacaf Champions League (akin to the European Champions League). Therefore, the Teams concluded the United States Soccer Federation should thus implement a system of relegation and promotion in the MLS, otherwise they are in violation of Article 9.

On February 3, 2020, the CAS came down with a ruling – a ruling certainly in favor of the MLS and keeping its status as a members only club. After hearings, interpreting Article 9 and giving deference to FIFA, the Panel concluded Article 9 only applied to member associations that already implemented the relegation-promotion system. USSF however, ran the MLS as a closed league many years before Article 9 was incorporated into the FIFA regulations. The Panel further concluded, after looking at the legislative history, that it was never the intention of FIFA to apply Article 9 to the USSF and pursuant to the evidence provided, Article 9 did not assert an affirmative duty to implement a relegation-promotion system.

The Panel cast aside the Teams’ argument that USSF previously allowed teams to move up and down the pyramid by joining and withdrawing from leagues in different divisions. The Panel was not persuaded and said this is not de facto system of promotion and relegation because

“It is true that clubs (some of which previously had competed in lower division league) can gain entry to the MLS by paying an expansion fee and meeting other criteria established by the league, but that does not describe a system of promotion and relegation based on sporting merit.”

The court pointed out that closed leagues are commonplace in the United States and the Teams did not argue why such a practice could not be maintained in soccer. It is at the discretion of the USSF to implement a promotion-relegation system and there seems to be a push to create such a system – especially as higher profile players and coaches begin to populate the MLS and influence the sport. It is clear from the ruling that legal action is not the way to bring about this change. It will take owner and player pressure to change the current system. However, if the relegation system is adopted, owners of teams in the MLS will lose 200 million dollars (a number that keeps going up) per expansion team, which they can either use to reinvest in their team, or possibly pocket the money. This would be a heavy price to pay – one which the owners may not acquiesce to without major reservations.