Deloitte American Promotion/Relegation Survey Tells Us Nothing New

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Professional services firm Deloitte published a report on Monday detailing the pros and cons of the American soccer system implementing a promotion and relegation system. The study was commissioned by Silva International Investments, the group that owns NASL side Miami FC. The entire reports has not been made public yet, but an executive summary can be downloaded here. It draws many conclusions both for and against the system, but also doesn’t give either side more ammo in the long raging debate of American promotion/relegation.

Deloitte American Promotion/Relegation Survey Tells Us Nothing New

The study does say that such a system would be a long term benefit for American soccer as a whole, but also cautions that we may not be ready for such a transition. Promotion and Relegation would create opportunities for lower division clubs and players, but it also prevents a significant risk to the billionaire owners who have payed north on $100 million to play in MLS.

Pros For Pro/Rel

The report indicated that many soccer fans are in favor of promotion and relegation in the American system. A whopping 88% of the 1,000 fans surveyed expressed support for it. While I think this number is a little high for the full population of American fans, I do believe there is considerable support for a pro/rel system in the United States. Here are some of the benefits laid out by Deloitte, all of which we have heard before from the pro/rel supporters:

Boosted Development of Lower Clubs and Players

The allure of being promoted to MLS has driven economic investment in a few lower division clubs. Minnesota United, Sacramento Republic, and Saint Louis FC are the most recent example. However, if teams could make the top division based solely on their play on the field, the theory is that more owners would step up their game in the NASL, USL, and below with the aim of making MLS one day. This would drive investment in those lower clubs as a cheaper way to enter the system and eventually take part in the riches of MLS.

This would also further motivate lower division clubs to develop talented players of their own. Seeing as how the only way to make the top league is to win, strong players are important to that goal. With more clubs developing more players, more stars would emerge on the American scene, possibly even trickling up to the national team level.

Increased Interest Throughout MLS Season and Lower Leagues

MLS would, in fact, see some benefit from this system as well. At the moment, the last couple weeks of the season are wonderful for the playoff chase. Many mid-level teams keep interest in their seasons thanks to the drive to the playoffs. Promotion and relegation would also increase the late season interest for the bottom of the table. Last place teams would be fighting for their first division lives, therefore playing compelling matches, even if their playoff hopes are dead.

As an aside to this, it would also eliminate a team from selling off all their established stars for younger, but less talented, players for the future. It would keep teams interested in winning instead of tanking their season while looking for that top MLS SuperDraft pick. More desire to win keeps more fans interested up until the end of the season.

Furthers U.S. Soccer’s Global Ambitions

FIFA statutes specifically mention promotion and relegation as a big part of its system. FIFA statute IV.9 says, “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 United States does not fall in line with this provision, and obviously instituting pro/rell would allow it to fall in line.

Cons For Pro/Rel

Even among fans who would love to see promotion and relegation come to the USA, there are people who feel it isn’t feasible. Most of the negative reactions to it come from the businessmen up at MLS and the fans who see their points. The threat of moving down to a lower league after having payed tens, if not hundreds, of millions of dollars to get into MLS is an obvious threat. There are other concerns as well, such as stadium quality, decreased competitive balance, increased operating costs for clubs at all levels.

Quality of Promoted Teams Will Be Low

When you take a team that has been playing second division soccer for a long time and bring them into the top level, there are questions about whether the team is good enough on the field. It can be expected that the first several batches of promoted teams will get steamrolled right back into the second tier. The quality of their players aren’t good enough, hence why they have been playing in the lower league. Of course, over time (a lot of time), this would even out. Eventually, the gap between the first and second divisions would close, but it would take a very long time. The trade off is significant changes to competitive balance.

This also extends to stadium infrastructure. There is a massive difference between an MLS quality stadium and the glorified high school and college stadiums of the NASL and USL. With rare exception, lower division clubs don’t have their own field. Of the ones that do, few of them meet the standards for top level soccer. Whether it is low seating capacity capping revenue, technical infrastructure limiting television coverage, or insufficient transportation to handle increased fans, a lot of work would have to be done on lower level stadiums to get them MLS ready.

Increased Operation Costs

There is also the negative aspect of a team being promoted. Jumping to a higher division brings increased travel and player costs. Some lower level teams may not be able to handle that increased cost of simply existing, let alone winning, at the MLS level. They aren’t making enough money through attendance and media revenue at their level.

MLS sides would see in increase in player costs, as well. The drive to stay competitive and stay in the first division would drive up the costs of players as shedding payroll would no longer be a valid option for future competition.

There’s a reason why MLS was founded as, and remains, a single entity league. It’s a safer business strategy that will help the league grow, but not outgrow itself. At the moment, MLS cannot afford to freely sling money at their players. Remember, the league is only two years remove from a club going belly up thanks to financial insolvability in the single entity system. The league and it’s clubs may not be ready for these increased costs.

Good Luck Convincing BIllionaires to Risk Investments

This is a two ton pound elephant in the American promotion/relegation room. MLS owners have been paying ever increasing expansion fees to get into the league. How can you tell the owner of an expansion side that is shelling out $200 million for a seat at the table that they could be down in a lower league after one bad season? That would never go over well with anyone. Promotion and relegation won’t happen until MLS stops expanding and collecting these ever increasing fees.

The Deloitte summary concludes by saying that, while promotion and relegation would be a good long term idea for American soccer, it does recognize the hurdles towards implementation as keeping it from happening. It’s final bullet point reads, “As it stands however, US club soccer is not immediately ready for promotion and relegation…” There are still a lot of things that would have to be addressed in order for the system to work. A specific number of teams per division would need to be established, the second and third tier clubs would need to find some stability, and a way to protect the financial investments of current MLS owners would need to be devised.

But overall, these are the same arguments that both sides of the American promotion/relegation debate have been using for years. This survey, while bringing the debate slightly more into the forefront of discussion, really doesn’t add anything new to the fire.

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