Perhaps the most stark example of the difference between North American and European sporting organisation is promotion and relegation/demotion. A European sports fan grows up believing these two concepts are facts of all sporting life: You do badly, you mess up, you get relegated, you get punished. A North American sports fan finds them slightly odd concepts since the participants in the major sporting leagues in the US and Canada are fixed. Different competing leagues will be formed there, while in Europe a fixed hierarchy is in place, and only at the (very) minor league level can rival leagues be set up.
Research has gone into the economic incentives posed by such structures, with one example being this paper in the Journal of Sports Economics by Roger Noll in 2002. Noll documents the difficulty of empirically assessing these different structures due to the lack of any counter-factual in either region: North America has no promotion, and Europe has no introduction of rival leagues.
Nonetheless, it has been asserted that promotion and relegation cause a great deal of instability, particularly financially, at sports clubs. In England, promotion to the Premiership is highly lucrative financially (the play-off match for promotion to the Premiership is widely regarded as one of the most important matches financially in any given season due to the huge benefits of winning promotion). This creates the incentive for teams in the division below, the Championship, to spend big money in the hope of winning promotion. However, soccer is a very unpredictable sport, and the margins between success and failure are wafer thin. Once a team has spent big and misses promotion, the consequences can be dramatic.
This is best exemplified in the current season of English soccer. The third division of English soccer has no less than nine previous members of the Premiership, and a number of clubs that would be described as giants. Leeds United begin their third consecutive season at this level, and they have been joined by Norwich City, Southampton and Charlton Athletic, all clubs that in the last four years have graced the Premiership.
Even worse, promotion back is not guaranteed, and Norwich City found this out to their peril today, on the opening day of the new season, as they were humiliatingly crushed 7-1 in their own stadium by relative minnows Colchester United. But this is all what makes the English soccer structure so endearing for its supporters I believe – apart from the supporters of the bigger clubs I guess…