In: Economics
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.