Editor’s note: this is part one in a series of informative resource pieces on the United States’ men’s professional soccer system. We plan to link these pieces to personal interest stories on those involved in lower league, semi-professional and amateur teams, how they fit into the current system, and discussions on where the system is going or where it could go.
With the current iteration of US professional soccer now into its second generation, these pieces are intended to bridge the gap between those who were raised on the US soccer system, and those who were raised on European soccer systems, specifically the English system. Our hope is to foster an understanding on how each system currently works, and a discussion on what works and what does not.
The American Sports Franchise System
When Americans think of professional sports teams, we think of our franchise systems: a powerful league governing a system where wealthy team owners typically enjoy exclusive franchise rights in a specific market.
In this system, with the exception of a few extraordinarily large markets, there is virtually no chance of the league granting a competing franchise in the same media market. And there is no such thing as promotion and relegation between the top league and any lower leagues. In fact, most lower leagues are comprised of minor-league development teams, directly affiliated or even owned outright by the top-level team.
United States Men’s Professional Soccer Pyramid
In United States professional men’s soccer, there is an official three-tier pyramid system of mostly independent leagues. The top level is Major League Soccer (MLS), followed by second-level USL Championship and third-level leagues USL League One, National Independent Soccer Association (NISA), and MLS Next Pro.
MLS and MLS Next Pro are the only leagues with a connection, with the latter acting as a minor league development system for MLS.
While USL Championship and USL League One both fall under the USL, the leagues are separate and all teams are independent. There is no affiliation between the teams in the respective leagues.
Establishment of a New Professional Soccer Team in the United States
To establish a new team in the MLS or either of the USL leagues, an owner must apply, proving they can meet certain financial, stadium, and other requirements, and if accepted, pay a franchise fee to the league. Most recently, a group of investors led by Egyptian billionaire Mohamed Mansour paid Major League Soccer a record $500 million to establish an expansion franchise in San Diego. This new team will start play in the MLS from day one.
Fees to establish a new franchise in lower leagues range from $20 million in the USL Championship to $5 million in USL League One.
The only professional men’s league without a significant fee is NISA, which allows membership based on a minimum net worth of the owner and the team meeting certain stadium and other league standards. NISA does have a league equity buy-in requirement, but it is “a mere fraction” of even the smallest USL franchise fee. Notably, NISA also does not have exclusive territory rights, meaning an owner can establish a team in a market where one already exists as long as they meet all other standards.
Contrast: The English Football System
In England, there are no franchise fees to join the Premier League, because there are no franchises. Instead, there are football clubs, most of which have long, storied histories. Established football clubs can certainly be bought and sold based on their current market value, but one cannot pay the Premier League or the Football Association a franchise fee to establish a new football club in a particular league.
In England, new football clubs start at the bottom. Once established with minimum qualifications, they apply to join a regional league. Once accepted, they can theoretically move up the pyramid via the system of promotion and relegation. If they finish top two or win the third playoff spot in their current league, they move up a league for the next season, assuming they meet the minimum qualifications of that league. If they finish at the bottom, they drop down a league for the next season.
In looking at the list of English clubs in the top four professional flights for the upcoming 2023-2024 season, the youngest club is MK Dons, considered “founded” in 2004. However, MK Dons was a rebrand of Wimbledon FC, a club founded in 1899 that moved to Milton Keynes in 2004. Upon making the move, the club retained Wimbledon FC’s position in the third-tier League One.
The actual youngest club in the top four flights is AFC Wimbledon, a club founded by Wimbledon FC supporters in 2002, soon after the news broke that the latter intended to move to Milton Keynes.
In American terms, we might call this an “expansion” side. But rather than automatically start in the top four, AFC Wimbledon had to literally start at the bottom and claw its way up. The club started in the Combined Counties Football League, which encompasses levels nine and ten on the English pyramid. It wasn’t until 2011 that AFC Wimbledon finally gained promotion to the fourth-tier League Two, and in 2016 when they were promoted to League One.
For those used to the American system, asking why there are no expansion clubs in the Premier League, this is the answer. Expansion and franchising simply do not exist in England in the American context. This is a simplified view, but in essence, anyone can establish a football club, but the club has to start out at the bottom and work its way up through a long-established system of promotion and relegation.
Why the United States Soccer System is Different
To keep this all in context, remember that there are no continuously active professional men’s soccer teams in the United States dating back further than 1993, with only Charleston Battery of the USL Championship, and Richmond Kickers of USL League One operating since then. The MLS began play in 1996, and while today’s USL was founded in 1986 as the Southwest Indoor Soccer League, its current structure is unrecognizable compared to what then.
Contrast this with England, where all but a small handful of clubs in the top four leagues date back 100 years or more, and a system of promotion and relegation between leagues dates back to 1898.
It has been argued that a promotion and relegation system does not exist in the United States at this time because the leagues are too new. It required a massive amount of capital to build a top-flight professional league from scratch in the mid-1990’s, and the development of a top-flight league was a requirement for the United States to host the World Cup in 1994.
In order to attract the capital needed to start and sustain a top-flight league, owners and investors needed to be assured that they could turn a long-term profit out of their investments. Any threat of relegation in the United States, then a fickle market for soccer and competing with “the big four” (NFL, MLB, NBA, NHL) as well as NCAA Football and Basketball seemed disastrous to potential investors. It was thought that relegation would be a death sentence.
This notion carried over to the USL as it became more established in its current form as a second and then an additional third division league. Even though the USL has two clearly established divisions, there is currently no talk of a system of promotion and relegation between the divisions. The USL Championship remains mostly a league for larger markets neglected by the MLS and larger middle-markets, while USL League One remains mostly a league for smaller middle-markets and small market regions.
NISA is again, the potential outlier here. As early as 2017, the league stated its intention to eventually implement a system of promotion and relegation once it reached a goal of 24 teams. However, the league has struggled to retain teams, currently at nine for the 2023 season. NISA also operates NISA Nation, a semi-pro network of regional leagues set up with a goal of eventually implementing a system of promotion and relegation. However, such a system is not yet in place due to the lack of teams in NISA, and NISA Nation teams currently are “promoted” to NISA based on applying and meeting membership requirements.
Paid Promotion and Self-Relegation in the American Closed System
The American leagues’ franchise system is considered closed, meaning there is no merit-based promotion and relegation between the levels of the pyramid. The champions of the second tier are exactly that and continue in the second tier next year. The last-place teams get a wooden spoon award but remain in their respective leagues. While NISA shows promise of approaching an open system, the only way up in the MLS or USL is to pay a franchise fee to the league and meet minimum qualifications, and even then, there are geographic restrictions so teams do not compete for too many fans in the same region.
For example, the owners of Charlotte Independence of USL League One would never be allowed to buy their way into the MLS, because Charlotte FC exists in the same city, and the suits in the MLS marketing department do not believe the Charlotte metro area has enough people to support two teams and make enough money for the respective ownership groups and investors.
However, a USL team can “self-relegate” with approval from the league, meaning they drop down a division. This is usually done due to financial concerns as an alternative to folding, where the team’s ownership feels they can compete better in the lower league.
For example, USL League One teams Richmond Kickers, North Carolina FC, and Charlotte Independence all self-relegated from the USL Championship (or then-second division equivalent) for various reasons. Richmond felt it did not have the investments at the time to keep up with the USL Championship; North Carolina FC dropped down after losing out on an MLS bid; and Charlotte Independence dropped down after a massive chunk of its market was snatched away by MLS expansion side Charlotte FC.
In addition, FC Tucson self-relegated from USL League One to the semi-professional USL League Two, claiming it needed to reorganize its finances, stadium situation, and management before attempting a return.
In the same off-season that FC Tucson self-relegated, One Knoxville SC was “promoted” to USL League One from League Two, but was considered a new professional franchise, and had to pay the franchise fee to the league.
Active teams that gained “promotion” to the MLS include NASL’s CF Montreal and Minnesota United, and USL’s FC Cincinnati, Nashville SC, Orlando City, and Vancouver Whitecaps. But again, the owners had to pay the large MLS expansion fee, rather than earn promotion via winning their prior leagues. Portland Timbers, San Jose Earthquakes, and Seattle Sounders are all considered “phoenix” clubs, as the current iterations rose from the ashes of prior ones and are not considered true continuations.
The Future of the United States Professional Soccer System
So where is the United States professional soccer system going from here?
The promotion/relegation argument is often beaten to death on soccer Twitter and the blog and podcast circuit. Football purists would love to see such a system in the United States, or refuse to take it seriously as long as the closed system exists.
Other fans have grown accustomed to the closed system, and argue that it maintains sustainable investments, and helps provide a system of relative equity where we don’t end up with four or five teams dominating the top level every year. And of course, ownership groups who have sent hundreds of millions of dollars to the MLS to establish a new franchise are not eager to give up exclusive rights to their territory and placement in the league.
If NISA is able to get its plans off the ground, we may get to see a promotion and relegation experiment in action. Will fans continue to support their local, even if their local is relegated to a lower league?
Or are they as fickle as the owners of MLS and USL franchises fear? Would fans jump ship and lose interest if their local relegated to a lower league due to poor performance?
However, NISA has its own issues in even establishing a solid base of teams and fans. Since 2019, five teams have folded, three have moved to the USL, two have merged with other NISA teams and one has self-relegated to a semi-professional league. Three more are technically in existence, but on hiatus from play.
While two new teams plan to join NISA in 2024, each off-season brings more unknowns when it comes to which active teams will continue, which will move up or down and which ones will fold or go on hiatus. There is always the question as to whether or not the league itself can survive.
Promotion and Relegation has also been speculated by fans as a potential for the MLS and USL Championship at some point in the future, especially as the leagues become inundated with teams. The San Diego expansion side will join MLS in 2025 as its 30th team, and USL Championship will expand to 27 teams by 2025. Could these leagues split into their own closed systems where promotion and relegation are used?
Of course, this is all pure speculation, as there is no official stance from the leagues other than continuing with the status quo.
Promotion and relegation between USL Championship and USL League One remains iffy due to the large difference in franchise fees, and the precarious stadium situations among teams in both leagues, but in particular USL League One. Currently, four of the 12 active teams (plus one 2024 expansion team) lack a permanent stadium solution, and are secondary tenants at local colleges. Stable stadium situations that meet the qualifications of the higher league would be a must if a system were to work.
So for now, we chug along with the status quo, a closed system. There is hope that NISA can demonstrate a successful system of promotion and relegation, but for now, it seems to be a ways off, and NISA continues to try to establish a minimum number of teams.
Given how bloated the top two leagues have become, we feel that something has to give. But it probably won’t be any time soon.
Special thanks to Dan Creel of Protagonist Soccer for assistance on this piece.