Why Is There Promotion And Relegation In European Soccer?

It’s one thing just to think that the system you’re used to is “better”. Are there any more objective arguments regarding this?

Sports economist Roger Noll has published the authoritative account on promotion and relegation, writing “players earn higher wages under promotion and relegation, promotion and relegation has a net positive effect on attendance, and the effect of promotion and relegation on competitive balance is ambiguous”.

It depends, of course, on preferences. Strong markets for teams, where greater revenues can be extracted from the local population from on-field success, will more likely be in a Premier League without relegation. Leeds wouldn’t have been relegated.

But teams in a Premier League with relegation who fear that relegation invest more in playing quality than they would if there was no threat of relegation. Hence Noll argues that European soccer leagues will always be of a higher quality than MLS in the US.

Also, player wages will be higher in promotion/relegation leagues, since those players of high quality are in greater demand. Unsurprisingly, many Premier League bosses amongst others, over the years, have called for an end to relegation - it costs to pay these players.

What is the impact of a divisional, hierarchical system? It collects teams together into groupings of similar quality, with a yearly shift of a small number between groups. Statisticians Ian McHale and Phil Scarf noted this feature of club football, relative to international matches between countries where until UEFA’s Nations League, friendlies constituted most of the matches played.

It means that for a season, a strong team can be constrained from moving up the standings by the division it is stuck in. Or a weak team can be constrained from falling down the league standings by the division it is stuck in. Once the season ends, the team can then re-start its rise or fall. Hence divisions create a discontinuity in league standings.

Knife edges are created too. On the final days of seasons, sometimes even in the very final seconds of the final matches of seasons, goals are scored that can promote, or relegate, a team. A team can finish tied on points with another team, but by virtue of, over 38 or 46 games having scored one or two more/fewer goals, be promoted over the other team, or relegated in place of them.

Recent research by Jamin Speer at the University of Memphis has looked at these discontinuities, considering the outcomes in subsequent years for pairs of teams either side of such a discontinuity. He presented his research online here in May. He finds that teams that suffer a narrow relegation finish statistically significantly lower than the teams that avoid relegation for four years after, while just-promoted teams finish higher than teams just missing out for six years.

That means that Bournemouth (whose manager is pictured above), who were narrowly relegated instead of Aston Villa last season, are destined to spend at least the next four years beneath their midlands rivals (who hammered Premier League Champions Liverpool 7-2 last weekend). West Brom, who stumbled to promotion to the Premier League ahead of Brentford FC, are set to spend six years finishing above their rivals.

Speer also goes on to consider the financial impacts of these cliff edges. They do suggest more aggressive financial strategies for teams - especially when the Premier League is as lucrative as it is. Arguably the promotion and relegation system does encourage more reckless financial management, and this has led to measures like Financial Fair Play, attempts to encourage teams to live within their means, financially.

The impact of such regulations, though, is that it arguably reduces mobility between divisions. If teams are unable to pursue an aggressive financial strategy of procuring expensive players to move up the leagues, or to try and get to the top of the Premier League, then surely that becomes less likely.