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The Morning Rekrap: July 25, 2017

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4 Billion reasons to implement promotion and relegation

MLS Atlanta Launch Event Photo by Paras Griffin/Getty Images for MLS Atlanta

The news that Ricardo Silva and his media company MP & Silva offered a 10 year $4 billion media rights deal to Major League Soccer if the league adopted promotion and relegation has added a new wrinkle to the topic. Typically pro/rel is advocated for most loudly by those on social media who propagate allegations about leagues dying, the health of the U.S. soccer landscape, the magic of the free market, and the corruption of MLS and U.S. Soccer Federation President Sunil Gulati.

The usual assumption underlying the creation of a pro/rel system is that by merely existing, pro/rel will engender benefits that would make the U.S. one of if not the top soccer league in the world. This neatly skips over why pro/rel itself is so compelling that it would do this, but pointing that out only leads to a discussion based on circular logic about corruption and as described in the paragraph above.

The retort to this line of thinking is generally something along the lines of MLS is the most successful league in the history of the U.S. It has been gaining more investment but it still isn’t profitable and owners may be scared away from supporting top flight soccer in the country more if they think their investment may be at greater risk if their team drops to the lower division. Plus, the closed nature of MLS is designed to protect the owners and they don’t have a reason to remove the safety net built into the league by adopting pro/rel.

A huge offer

Silva’s plan neatly works around that by at least in part guaranteeing a huge sum of money for owners to access or recoup their losses. $4 Billion splits to over $140 million between the 28 clubs that MLS may have by 2023. That pays off, or nearly pays off expansion fees, for teams who have joined the league recently and creates the parachute payment bank for owners of teams that drop to a lower division.

One thing Silva’s plan does not do is resolve the issue of Soccer United Marketing, the company that markets MLS as well as several international teams and club sides when they play matches in the U.S. When a team expands into MLS the investors of that team are buying into SUM. Aside from the potential growth opportunities in the league becoming more popular down the road, SUM ensures that owners make a profit even if their teams don’t.

Despite that, this is an incredible offer. It essentially values the media generated by MLS at $400 million per year. For perspective, that is over four times the value of the current deal and nearly triple the $160 million a year NBC is paying for the EPL for a TV audience that is currently half of what the Premier League draws on average. That is a huge amount of money for the third most watched soccer league in the U.S.

An offer like this has the potential to change the conversation about pro/rel in MLS and makes it difficult if not impossible for the league to justify not adopting it in order to protect owners. That would be true if not for one factor, the league can’t even consider accepting it. As ESPN notes, MLS cannot listen to other offers to sell its media rights until the current deal it has with broadcasters ends in 2023.

Exaggerated benefits and assumed outcomes

Until MLS can consider the deal, we will have to suffer through more circular logic on Twitter from the #PROREL4USA crowd based on market assumptions that are themselves problematic. There’s also talk of the deal turning MLS into a ‘real soccer league’ from the leading edgy soccer hot take man Billy Haisley, calling owners cowardly for acting like every other sports league in the U.S.

What pro/rel advocates overlook is that the system doesn’t make the U.S. have a “real soccer league” and it doesn’t solve the problems that soccer in the U.S. has. It is only a mechanism for moving teams between divisions of the soccer pyramid. Issues like fan interest, competitiveness, player development, and profitability, even with the giant vote of confidence that an offer like Silva’s demonstrates, are not guaranteed just because of pro/rel.

For example, promotion and relegation is credited with driving fan interest in games that may not otherwise matter. Silva mentioned in a letter to MLS owners that pro/rel would make late season games that have no consequence in the standings relevant. This point is asserted, by Silva and others, as if teams in leagues with pro/rel only ever play in meaningful games, this is simply not true. For leagues with promotion and relegation, mid-table teams often have little to play for with four or more weeks left in their seasons and by then some teams are already doomed to relegation illustrating that the system doesn’t ensure that every single game in a season will be important.

In addition, in MLS last season no team was fully eliminated from the playoffs until week 30 of the 34 week season and the final team was not eliminated from the postseason until the last week. Some may not find the MLS playoff race compelling, but it is a way to keep games relevant late in the season and at worst it shows that MLS suffers from the same problem of games being relevant as leagues with pro/rel.

The system is also often credited with keeping coaches and players accountable. However, in MLS coaches who miss the playoffs are often fired, Jason Kries and Adrian Heath were both released by NYCFC and Orlando City respectively due to poor results and Wade Barrett was not retained as manager by Houston after missing the playoffs despite improving that team’s quality of play. This year Don Kinnear was fired from the San Jose Earthquakes after winning a game and being in a position to make the playoffs.

Early this year, Peter Wilt discussed the benefits that promotion and relegation will have for youth development. He claimed that:

The USSF and CSA would benefit from growth in youth soccer participation numbers, an increased commitment to player development by pro clubs, and the improved quality of their respective national teams. The heightened interest in soccer as a spectator sport that pro/rel generates, especially in smaller markets, would lead directly and indirectly to a higher number of kids playing the sport. According to the Deloitte study, youth participation has plateaued at 3.1 million in the last 15 years. The 15-year period before that saw a meteoric rise from 1.2 million to 3 million.

The problem with this is that Wilt does not provide any evidence showing that a sport's popularity as a spectator sport drives youth involvement, and without it this is basically meaningless.

In fact, the growing popularity of soccer may have no relationship to how popular youth soccer is. The overall popularity of soccer is rising in the US. LigaMX and EPL are extremely popular and growing in viewership while MLS expansion is driving the increasing popularity of that league. Wilt is asserting than heightened interest in soccer will increase youth development and this is empirically denied by the increase in the popularity of watching soccer in the U.S. which was not followed by a rise in youth participation according to the study that he cites.

To be fair, the promotion/relegation system adds another narrative layer to soccer in the country, would be unique among other sports in the U.S., and the United States, and Canada, should have it. One thing that Silva’s plan offers that others don’t come close to is a real, concrete, innovative way to resolve the major barrier to pro/rel in this country: MLS owners don’t want it in part because it increases the risk they have to take on in an already risky industry.

That said, while promotion and relegation might make soccer in the U.S. more interesting and give cities like Tulsa, Oklahoma or Chattanooga, Tennessee a chance at having a team in the first division, it is not a magic bullet. In the end, despite what advocates for promotion/relegation claim while making utopian arguments that would make Ayn Rand smile, it is only a mechanism to move teams between divisions in a soccer pyramid. The benefits for it are not as concrete as they seem upon critical inspection and are more aesthetic than they are demonstrable. Fans, and especially proponents of promotion and relegation, should keep their eyes open to that when advocating for it.