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Deloitte Study Suggests U.S. Soccer Could Benefit from Promotion/Relegation

Joe Tansey@JTansey90Featured ColumnistNovember 21, 2016

A general view of Red Bull Arena with a Guinness tarp at the center of the field is seen at the International Champions Cup, on Wednesday, July 22, 2015 month in Harrison, New Jersey. (Damian Strohmeyer/AP Images for International Champions Cup)
Damian Strohmeyer/Associated Press

Whenever the topic of promotion and relegation gets brought up in the American soccer community, a long and heated debate takes place.

The latest addition to the conversation comes from a Deloitte study commissioned by Silva International Investments.

"What we're hoping is that the report and the analysis become part of the debate straight away," Deloitte's head of Sport Business Group Dan Jones said in a phone conversation with Bleacher Report. "And that debate needs to take place on the philosophical and strategic level of is promotion/relegation something that is felt to be desirable for soccer in the United States."

CARSON, CA - OCTOBER 30: Landon Donovan #26 of Los Angeles Galaxy starts the attack from midfield during leg one of the Audi 2016 MLS Cup Playoff Western Conference Semfinal between the Colorado Rapids and the Los Angeles Galaxy at StubHub Center on Octob
Victor Decolongon/Getty Images

The study states the American soccer pyramid would be able to sustain an open-league system, but it puts no specific timetable on when it should occur.

"We quite deliberately haven't put timelines on this because I don't think it's our place to do so," Jones said. "I think there would definitely be a lot of detail to be worked through, so it's certainly not in any sense a prudent thing to do and flick the switch overnight and say we're going to go from a closed-league system to an open-league system.

"What the report hopes to do is be a thoughtful contribution to that debate and hopefully we would say that there's clear merit from introducing promotion/relegation and there are also clear challenges, but all of those challenges are capable of being met and dealt with."

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Most of the biggest challenges facing promotion and relegation are financial. Some would argue that an open-league system would detract owners from investing in clubs, but the conductors of the report concluded that ownership in European clubs by American owners could be a precedent for the risk involved in introducing the system.

"Our reflective reaction here in Europe is that U.S. investors are used to closed-league systems to guarantee profits and that's the model they use," Jones said. "We've seen plenty of U.S. investors come over in European soccer. Clearly there is an appetite among U.S. investors to invest in soccer without those guarantees."

American Jason Levien is an owner at Swansea City.
American Jason Levien is an owner at Swansea City.Kevin Wolf/Associated Press

"People are willing to invest and back themselves and put their money where their mouth is, whether that's in search for economic or emotional return or a combination of the two," Jones added.

"There is something there that is attractive and interesting about that. I don't think it's as simple as to say an idea of an open league would spook all U.S. investors. What's definitely true is the guys who have invested to date would look at it as a new big economic risk."

The report also suggests a phased transition could be used to implement promotion/relegation in the United States to ensure a safe switch from a closed- to open-league system.

“The most obvious element of transition is not to have straight promotion/relegation right away, but to have a promotion/relegation playoff," Jones stated. "The lowest-finishing teams in the top tier face the highest-finishing teams in the lower tier. If the teams trying to come up are good enough, they'll win the playoff on merit. I think that's an obvious transitional provision."

In a survey of 1,000 fans conducted by Deloitte, a ratio of over 8-to-1 fans are in favor of introducing promotion and relegation to the American soccer pyramid. Eighty-eight percent of the supporters questioned believe an open-league system would be beneficial to club soccer in the United States.

Jones also noted an ESPN FC MLS player survey from March 2016 in which 49 percent of the players surveyed favored promotion and relegation.

The interest in promotion/relegation's potential success continues to grow, but the reality is the American soccer pyramid isn't close to getting there yet.

There's an argument about whether the North American Soccer League or United Soccer League should be the true second division beneath MLS, or if both leagues should be given second-division status. Currently, the NASL is the second division in the United States.

However, a shakeup is set to take place heading into the 2017 season, as the Tampa Bay Rowdies and Ottawa Fury will move to the USL from NASL.

The Strikers have suffered through some struggles in the NASL.
The Strikers have suffered through some struggles in the NASL.Joel Auerbach/Getty Images

The USL may seem like it's ready to assume second-division status, but the majority of the clubs in the league have direct affiliations with MLS sides.

All 20 of the clubs who participated in MLS in 2016 have some sort of affiliation with teams in the USL, 11 of which are direct feeder teams including LA Galaxy II, New York Red Bulls II and FC Montreal among others.

Despite the challenges presented by the conflicts in the lower leagues, Jones believes the hurdles can be overcome at some point down the road.

"To the point of affiliate or feeder clubs, in European soccer you have that in Spain with the B teams of the bigger clubs playing in the lower divisions," Jones said. "None of these things are insurmountable. There are nuances and complications that need to be brought in mind, but none of these things are insurmountable.

The Red Bulls and Impact both have affiliate clubs in the USL.
The Red Bulls and Impact both have affiliate clubs in the USL.RICH SCHULTZ/Associated Press

"They could all be dealt with. I think from the analysis that we've done that there are very strong arguments for, and the arguments against are very real, but they're all capable of being managed if people believe in the benefits of promotion/relegation."

If promotion and relegation is instituted in the United States, Jones suggests certain criteria should also be met for certain clubs to secure first-tier status.

"Have criteria around those things and have them with a grace period, like a two-year grace period when you first come up to get the stadium in shape or what have you," Jones said. "The examples in other countries reflect that.

"There was a period when in England, in terms of promotion from the fifth tier to the fourth tier, there was a three-year period where the winners from the league below didn't meet the criteria and therefore didn't come up. You can put these criteria in place to try and make sure you don't damage what you already have."

The challenges are still evident in American soccer, whether it be continued expansion in MLS, development teams in USL or financial troubles in NASL, but the Deloitte study exudes confidence that one day promotion and relegation could be implemented down the road.

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