Unlike its international counterparts, the United States soccer system has never adopted a system of promotion and relegation. Through promotion and relegation, at the end of a season the bottom two or three teams in a league are relegated to the division below, while the corresponding top two or three teams in the league below are promoted.[1] The system creates open leagues. In the English Premier League, for example, twenty teams compete each season. Due to promotion and relegation, the composition of the league changes each season. Often, such as in the Premier League, relegated teams will receive “parachute payments” to assist in what has become a major financial gap between the Premier League and the lower leagues in the English football system.[2] These payments are on average £33m per club.[3]
Promotion and relegation are deeply embedded traditions in leagues worldwide. The infrastructure in those leagues is much more sophisticated, allowing for a stable promotion and relegation system. The financial penalty taken upon relegation is mitigated by larger revenue, media deals, and the parachute payments.[4] The infrastructure and financial gap may be about to change in U.S. soccer.
Last week, the United Soccer League (USL) announced plans to introduce promotion and relegation throughout its league system.[5] This follows on the heels of the USL’s decision to create a new Division I league to rival Major League Soccer (MLS).[6] Promotion and relegation would be introduced after the debut of the new USL Division One, operating across its three-tiered professional system, from Division One through League One.[7] The goal is to create more competitive matches and more dynamic seasons. Unlike MLS, the USL does not operate as a closed league, so teams seeking entry do not have to pay franchise fees.[8] There is no indication that MLS will move to an open league structure.
Implementing promotion and relegation in the USL could encourage more aggressive grassroots or infrastructure investment. With MLS franchises costing upwards of $500 million, teams facing relegation would have little incentive to invest beyond their first teams.[9] In contrast, USL teams, with much lower entry costs, may be more inclined to invest throughout their organizations to maintain stability and financial success. MLS teams are presently guaranteed spots in the league. Relegation in MLS would undermine this guarantee for team owners and investors, who have invested capital solely based on the understanding that their money is secure.[10] Investors in the USL, without similar guarantees, take on more risk but with the potential for more future reward. Common across European leagues, promotion and relegation have never been adopted in U.S. sports leagues. With the launch of a new Division I soccer league under the USL umbrella, the U.S. will see its first system of promotion and relegation in professional soccer. There are significant financial, infrastructure, and capital risks that accompany this decision. In the end, it remains to be seen whether promotion and relegation will become a reality for U.S. soccer.
[1] See Jamin D. Speer, The Consequences of Promotion and Relegation in European Soccer Leagues: A Regression Discontinuity Approach, Sports Economics Review (Mar. 1, 2023).
[2] See id.
[3] See Michael Short, Premier League Parachute Payments Gap a ‘Major Concern’ Says EFL, BBC (Apr. 19, 2023), https://www.bbc.com/sport/football/65323385.
[4] See Paul Tenorio, After Historic USL Vote, Promotion, Relegation in USA to Become Reality, The Athletic (Mar. 18, 2025), https://www.nytimes.com/athletic/6213452/2025/03/18/usl-promotion-relegation-us-soccer-vote/.
[5] See United Soccer League Adopts Promotion and Relegation System, USL (Mar. 19, 2025), https://www.uslsoccer.com/news_article/show/1334700.
[6] Timothy Allaire, Is U.S. Soccer Ready for Two Division I Leagues?, UB Law Sports & Entertainment Forum (Mar. 9, 2025), https://ublawsportsforum.com/2025/03/09/is-u-s-soccer-ready-for-two-division-i-leagues/.
[7] See United Soccer League Adopts Promotion and Relegation System, supra note 5.
[8] Barnaby Lane, MLS Promotion/Relegation: The Arguments For & Against, Sports Illustrated (Jan. 29, 2025), https://www.si.com/soccer/arguments-for-against-mls-promotion-and-relegation.
[9] See id.
[10] See id.
Photo Credit – https://footballcf.com/us-soccer-pyramid-explained/.
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