Beyond MLS: The Rise of the US Second Division

The United Soccer League (USL) is implementing a structural shift in professional soccer in the United States by introducing a promotion and relegation system, intended to launch in either 2027 or 2028.

The USL currently operates as the second-highest level of professional soccer in the U.S., positioned below Major League Soccer (MLS). The league consists of 31 teams and is pursuing a strategy to establish a new Division I league at the top of its pyramid, which would create a direct alternative to the MLS for players and fans.

The Shift to Meritocracy

Promotion and relegation, often referred to as pro-rel, is a system common in global soccer where high-performing teams from lower divisions move up to the tier above them, while the lowest-performing teams in a higher division are demoted.

This system introduces a form of accountability for executives, players, and teams, as performance directly impacts a club’s divisional status. Supporters of the move argue that it makes games at the bottom of the league standings as compelling as those at the top.

It’s going to bring in better players, better staff and just a better show for our fans. So that’s going to allow us to have even more of a positive impact to our community

Jose Bautista, owner of the Las Vegas Lights

However, the system also introduces financial risks, as the devaluation of a team’s investment can occur if the club is relegated to a lower division.

Comparison with Major League Soccer

Major League Soccer, the top level of professional soccer in the U.S. Since 1996, has not entertained the idea of promotion and relegation. Instead, MLS has grown through a closed-franchise expansion model.

As of the 2025 season, MLS has 30 teams, including the debut of San Diego FC. The league has historically used high expansion fees to grow its national reach and secure television rights. For example, the ownership groups for FC Cincinnati and Nashville SC each paid $150 million to join the league. More recently, the 30th team was required to pay an entrance fee of $325 million.

MLS maintains a strategy of artificial scarcity to protect the value of its franchises. In this model, the league may buy back a franchise if it needs to be sold or moved, then resell it at a top-tier price rather than granting new expansion clubs freely.

USL Expansion and Market Value

The USL is pursuing a different trajectory, utilizing a license-for-all approach. The league is currently exploring a pipeline of up to 70 potential new markets as it attempts to form its first division.

This rapid expansion has raised concerns among some current club owners regarding the potential for value stagnation. In professional sports, value is typically built on scarcity; the fewer teams available, the higher the premium for existing franchises. Critics suggest that the USL’s aggressive expansion could chip away at the value of individual clubs by reducing that scarcity.

The USL’s ambition to create a successful Division One league would represent a significant challenge to the existing U.S. Soccer hierarchy. Previous attempts to compete directly with MLS, such as the North American Soccer League (NASL), failed to achieve first-division status and folded in 2017.