Closed Leagues vs. Open Leagues

One of the biggest differences between the way the United States sees sports and how the rest of the world does is the difference between open and closed leagues.  Every American sports uses a closed-league system, a format in which a league is a single entity that controls all transactions and interactions within the teams that consist of it.

For example, the NFL is a signle business that owns all 32 teams within the league.  There are owners of each individual teams that make money from the club, but the NFL oversees the 32 teams.  The biggest competitive obstacle in the NFL is the salary cap.  Fitting a team capable of winning the Super Bowl into salaries that add up to an amount under the salary cap is extremely difficult.  The mechanisms of salary caps, trades, and drafts seem fundamental and essential to American sports, but this is not the only way sports are formatted.  In soccer leagues around the world, each club is a business in itself and transactions are handled on a free market where law, not policy, is what regulates interaction between teams for the most part.  FIFA regulations also govern transactions between teams.  Open-league systems have no salary cap and are tasked with signing players without the help of drafts or other kinds of allocations (Open Competition).

There are several pros and cons that come with these differences in format.  A soccer parallel for this is the United States’ Major League Soccer and how it compares to the rest of the world.  MLS started in 1996 is currently in its 19th year.  It was come a long way in 19 years but still has a long way to go when considered against the English Premier League, Italian Serie A, or Germany’s Bundesliga.  Major League Soccer operates under a closed-league system, just like the NFL or NBA.  There is a draft for players coming out of college each year, a salary cap, and trades can be blocked or manipulated by the league’s hierarchy.  When an MLS player is wanted by a foreign team, that team must negotiate with MLS to sign him, not the team that the player plays for because players sign contracts with the league and then are placed onto a team.

In a closed league it takes a lot of ingenuity to piece salaries together and make smart trades to win a league that every single team in the same has the tools to win.  That dynamic has value and it is what makes the NFL, MLB, and NBA so much fun to follow.  However, basketball, football, and baseball are dominated by their respective leagues around the world, while soccer is not monopolized by anything around the world.  In the scope of MLS, if the American league wants to grow more, the closed-league system is holding it back.

The problems with the converse, an open-league system, are harder to be found but are significant.  An open-league system requires teams to be competitive financially, which as mentioned in previous commentary on this blog lends itself to more competition on the field, so these thing go hand in hand.  Several English teams have seen financial crisis as they have been incapable of competing anymore, one of the most notable cases of this has been Portsmouth FC’s (England) rapid decline over the last 10 years.  The club experienced liquidation and quickly moved down the hierarchy of English football.  Owners in the United States do not find this appealing, especially when the country’s sports climate is so congested.  With so many sports existing in the US, it is very difficult for soccer to grow, which makes a closed-league system advantageous.  Some American clubs simply would not survive under an open league, teams with small attendance numbers and more loosely-committed ownership would be much less likely to survive a free market’s demands (Open Possibility).

The vast differences between these two types of league formats make the world of soccer interesting to compare to the rest of sports.  Both have very exciting characteristics, and soccer would certainly not be the same without promotion and relegation and an open-league format.

Sources:

1. Szymanski, S., Ross, S. (2000, September) Open Competition in League Sports. Social Science Research Network. Retrieved from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=243756

2. Ciapala, D. (2012, July 31) Is Open League Soccer a Possibility in the United States? Yahoo! Sports. Retrieved from: http://sports.yahoo.com/news/open-league-soccer-possibility-united-states-015300027–mls.html

 

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