MLS Promotion/Relegation: The Arguments For & Against | OneFootball

Promotion and relegation is a system that is in place in almost every professional soccer league in the world. It’s one that rewards success with the opportunity to climb to higher divisions, punishes failure with relegation to lower tiers and is the bedrock upon which the competitive integrity of the sport is built.

The American soccer pyramid, however, is unique.

Major League Soccer acts as a closed league, meaning teams cannot be relegated or promoted into it. This means that while many clubs in the USL Championship, which serves as the second tier of professional soccer in the United States, aspire to grow and compete at the highest level, they remain locked out of MLS due to its franchise-based structure.

The only way a new team can enter MLS is by paying a hefty expansion fee, which these days typically exceeds hundreds of millions of dollars. For example, the league’s latest addition, San Diego FC, paid a record-breaking $500 million to secure their place in MLS for 2025.

For years, the USL has expressed interest in adopting a promotion and relegation system within its own structure, with some advocates hoping this could eventually be integrated into MLS to create a more traditional soccer pyramid.

However, MLS has shown little interest in incorporating relegation or changing its closed-league format, and no significant progress has been made toward unifying the two leagues.

So why does the USL so desperately want American soccer to align more closely with global norms? And why is MLS so content to remain as it is, continuing to forge its own unique path in the world of soccer?

The Arguments for MLS Promotion/Relegation

Orange County SC won the USL Championship in 2021. / IMAGO/Newscom World

There are plenty of arguments as to why MLS should become an open league—both sporting and financial.

The division's current closed model provides no sporting or financial incentive for teams in lower leagues to improve, while teaching those within MLS that there are no real consequences for failure or even prolonged mediocrity.

Take Louisville City FC, for example, which have won the USL Championship twice since its inception In 2014. Despite being the league's most successful team ever, it remains stuck in the division with no path to MLS. Furthermore, it has received no significant financial reward for its success—revenue that could otherwise help the club grow and compete on a larger stage.

On the other hand, consider Chicago Fire, which have finished last in MLS's overall standings on three occasions and second-to-last in 2024.

Despite its relative indifference on the field, the team remains a top-flight club simply because of its status within the closed league, benefiting from media deals and league revenue that its performances do little to justify.

MLS’s current structure fosters stagnation—whether by keeping high-performing lower-division clubs locked out of promotion or allowing underachieving teams to coast along with no repercussions. It creates cycle of complacency that undermines true competitive growth.

Jesse Marsch is among those for promotion and relegation in MLS. / Jeff Swinger-Imagn Images

In 2016, accounting firm Deloitte released a report outlining how transforming MLS and the broader American soccer pyramid into an open system could benefit the sport in the United States from top to bottom.

The report, commissioned by Silva International Investments, owners of USL Championship side Miami FC, argued that implementing promotion and relegation would boost attention—leading to higher attendance and increased broadcast viewership—and push owners to invest more in improving their teams and infrastructure, whether to achieve promotion or avoid relegation.

It also claimed that an open soccer pyramid would strengthen the overall soccer ecosystem through increased grassroots investment and ultimately result in a better and deeper player pool for the USMNT to draw from.

Former New York Red Bulls general manager Jérome de Bontin and Canada national team manager Jesse Marsch are among those who have voiced their support for MLS adopting promotion and relegation, backing the ideas presented in Deloitte’s report.

“There is an incredible market for pro soccer in the U.S.," de Bontin told The Guardian in 2016. "It is presently reined in by an uncompromising major league system that served its purpose well during the initial phase but 20 years later needs to evolve as it is now holding the growth back."

Marsch said the following year, according to ESPN: "I would like to see promotion-relegation. Because I think it just raises the stakes and gives so much hope to some of these smaller clubs.

"I know that investors put a lot of money into organizations to be part of MLS. But they should have to continue to put money into it and invest in the right areas and do the right things to continue to be in MLS.

The Arguments Against MLS Promotion/Relegation

Lionel Messi's Inter Miami is a recent addition to MLS. / Rich Storry-Imagn Images

Unsurprisingly, most of the arguments against MLS promotion and relegation come from those who have invested substantial sums to secure a spot in the league.

It’s easy to understand why. Take San Diego FC, for example. If the club were to falter and be relegated in its inaugural season after paying a record $500 million to join the league, the consequences would be severe.

Not only would the club’s investors understandably feel their significant financial commitment was undermined by a system with no guarantees, but it would also likely result in wasted capital and infrastructure that would need to be repurposed.

This kind of scenario would then likely deter future investors from paying expansion fees to enter MLS, knowing their money could quickly go down the drain. As a result, the league could quickly deteriorate, with potential investors staying away due to the high risk involved.

Sport, whether we like it or not, is a business, and business owners will, quite rightly, always seek to protect their assets.

San Diego FC co-owners Mohamed Mansour and Cody Martinez will bring the latest expansion team into MLS this season. / Orlando Ramirez-Imagn Images

Other arguments against MLS moving to an open system include the perceived lack of widespread interest in soccer in the U.S. to support multiple leagues, inadequate infrastructure at lower levels and concerns over the financial stability of smaller clubs.

Perhaps the biggest argument, however, is that the current system is—at least somewhat—working.

When MLS was inaugurated in 1996, the business model was essentially, come and invest, help grow soccer here and we will protect your investment. That model is still in place today.

While soccer remains behind basketball, baseball and football in terms of popularity, the sport is undoubtedly growing. Over the past five years, MLS has seen steady growth, driven by the league's improving quality and the arrival of a certain Lionel Messi––who, no doubt, would not have come to MLS if the current business model wasn't in place.

In 2024, the league achieved record-breaking milestones in attendance, sponsorship, retail, social media and digital media, while, according to MLS commissioner Don Garber, over a million viewers tuned in to watch regular season games on Apple TV—with whom MLS has an exclusive broadcast deal through 2032.

More eyes, particularly from overseas, are on MLS than ever before, and the league is attracting more talent than ever. Though it is still a destination for aging stars winding down their careers like Messi, younger talents with plenty of playing years left are also crossing the Atlantic to make their mark.

A prime example is Kévin Denkey, the highly-rated 24-year-old Togolese striker who turned down interest from Europe’s top clubs to join FC Cincinnati for a record MLS transfer fee in January. This move signals a shift in the type of player MLS is now attracting, suggesting the league’s growing appeal and investment in its future.

While it may not benefit the USL and the broader lower-division system, the current model is still working for MLS. Promotion and relegation might be ideal for the long-term future, but for now, the existing structure appears to be effectively fostering soccer's growth in the U.S.