Question

• Do you think the promotion/relegation system should/could be applied to the MLB or NFL professional sports leagues in the U.S.? Why or why not?
• Given the revenue structure of U.S. professional sports teams and European football teams, which leagues will be hurt most if games/matches are played with no or fewer fans attending (ticket sales) because of covid-19? Why?

Answer 1

No, the promotion/relegation system would not be beneficial in the environment of U.S. sports(MLB or NFL)
Reasons :
1. These leagues have no competition. e.g. All the major european football leagues are basically in a competetive market to determine who has the best football talent in their respective leagues so as to get better revenue or T.V deals. While, outside the U.S. , baseball and American football has no competition. Hence, having a relegation/promotion won't work since, business could be hampered when there is no better team to replace the weaker teams due to a lack of perfect competition.
2. Private franchisee owners of MLB/NFL would not risk their multi-million dollar revenue deals to go into relegation.

In times of a pandemic as such(Covid 19), the closed leagues(such as NFL or MLB) are potentially less riskier in terms of business losses when compared to European football leagues. When, there are no fans, clubs would generally fall short of generating revenue from sales and match tickets. But, in case of an open league(relegation/promotion), the risks are potentially higher in case of clubs facing relegation. And since, the investors do not privately own the European football leagues,unlike in the case of an MLB or NFL hence, their investments are less protected. Thus, the risk to invest in an European football league(open league) is higher in times of a pandemic and they are worse off.