In many sports leagues around the world with North American and Australian professional leagues being the most notable exceptions, promotion and relegation is a process that takes place at the end of each season in which teams are transferred between divisions. The best-ranked teams in each division are promoted to the next-highest division, and at the same time the worst ranked teams in the higher division are relegated or demoted to the lower division. This process may continue down through several levels, with teams being exchanged between levels 1 and 2, levels 2 and 3, levels 3 and 4, and so on.
The number of teams exchanged between each pair of divisions is normally identical, unless the higher division wishes to change the size of its membership or has lost one or more of its clubs and wishes to restore its previous membership size, in which case fewer teams may be relegated from that division, or accepted for promotion from the division below. Such variations will almost inevitably cause a knock-on effect through the lower divisions. For example, in 1995 the English Premier League voted to reduce its numbers by two and achieved the desired change by relegating four teams instead of the usual three, whilst only allowing two promotions from the Football League First Division.
The system is seen as the defining characteristic of the "European" form of professional sports league organization. Promotion and relegation have the effect of maintaining a hierarchy of leagues and divisions, according to the relative strength of their teams. They also maintain the importance of games played by many low-ranked teams near the end of the season, which may be at risk of relegation; in contrast, a low-ranked North American team's final games serve little purpose, and in fact losing may even be beneficial to such teams, yielding a better position in the next year's draft. The downside of relegation, however, is the potential severe economic hardship or even bankruptcy for demoted clubs. Some leagues most notably English football's Premier League offer "parachute payments" to its relegated teams for the following year(s), sums which often are higher than the prize money received by some non-relegated teams, in order to protect them from bankruptcy. There is of course a corresponding bonanza for owners of promoted clubs.
Teams in line for promotion may have to satisfy certain non-playing conditions in order to be accepted by the higher league, such as financial solvency, stadium capacity, and facilities. If these are not satisfied, a lower-ranked team may be promoted in their place, or a team in the league above may be saved from relegation.
The number of teams exchanged between each pair of divisions is normally identical, unless the higher division wishes to change the size of its membership or has lost one or more of its clubs and wishes to restore its previous membership size, in which case fewer teams may be relegated from that division, or accepted for promotion from the division below. Such variations will almost inevitably cause a knock-on effect through the lower divisions. For example, in 1995 the English Premier League voted to reduce its numbers by two and achieved the desired change by relegating four teams instead of the usual three, whilst only allowing two promotions from the Football League First Division.
The system is seen as the defining characteristic of the "European" form of professional sports league organization. Promotion and relegation have the effect of maintaining a hierarchy of leagues and divisions, according to the relative strength of their teams. They also maintain the importance of games played by many low-ranked teams near the end of the season, which may be at risk of relegation; in contrast, a low-ranked North American team's final games serve little purpose, and in fact losing may even be beneficial to such teams, yielding a better position in the next year's draft. The downside of relegation, however, is the potential severe economic hardship or even bankruptcy for demoted clubs. Some leagues most notably English football's Premier League offer "parachute payments" to its relegated teams for the following year(s), sums which often are higher than the prize money received by some non-relegated teams, in order to protect them from bankruptcy. There is of course a corresponding bonanza for owners of promoted clubs.
Teams in line for promotion may have to satisfy certain non-playing conditions in order to be accepted by the higher league, such as financial solvency, stadium capacity, and facilities. If these are not satisfied, a lower-ranked team may be promoted in their place, or a team in the league above may be saved from relegation.
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