Franchise (sports) - Structure of North American Leagues

Structure of North American Leagues

See also: Major professional sports leagues in the United States and Canada

Professional sports leagues in North America comprise a stipulated number of clubs, known as franchises, which field one team each. The franchises have territorial rights, usually exclusive territories large enough to cover major metropolitan areas, so that they have no local rivals. New teams may enter the competition only by a vote of current members; typically, a new place is put up for bid by would-be owners. This system is sometimes called a "franchise system" in the UK. It was introduced in baseball with the formation of the National League in 1876 and later adopted by the other North American leagues.

Although member clubs are corporate entities separate from their leagues, they operate only under league auspices. Partly because that relationship is so close, partly because the four major team sports leagues represent the top level of play in the world, North American teams almost never play competitive games against outside opponents. National Hockey League (NHL) and National Basketball Association (NBA) teams have played against European hockey and basketball teams in preseason exhibitions. The North American league, rather than any sport governing body, determines the playing rules and scoring rules of its game, and the rules under which players join and change teams.

The teams are organized with a view to each major city having a team to support. Only the largest cities have more than one team. As such the teams are often referred to as franchises. Even though they are not technically franchises in a business sense, the league is organised in a way that assures teams continued existence in the league from year to year, which fosters an ongoing connection with the team's supporters. On occasion a league may decide to grow the sport by admitting a new expansion team into the league. Most of the teams in the four major North American pro sports leagues were created as part of a planned league expansion or through the merger of a rival league. Only a handful of teams in the National Hockey League, for example, existed before becoming part of the NHL. The rest of the teams were created ex novo as expansion teams or as charter members of the World Hockey Association, which merged with the NHL in 1979.

The best teams in a given season reach a playoff tournament, and the winner of the playoffs is crowned champion of the league, and, in some cases as world champions. American and Canadian sports leagues typically have such "playoff" systems. These have their roots in long travel distances common in US and Canadian sports; to cut down on travel, leagues are typically aligned in geographic divisions and feature unbalanced schedules with teams playing more matches against opponents in the same division. Due to the unbalanced schedule typical in US and Canadian leagues, not all teams face the same opponents, and some teams may not meet during a regular season at all. This results in teams with identical records that have faced different opponents differing numbers of times, making team records alone an imperfect measure of league supremacy. The playoffs allow for head-to-head elimination-style competition between teams to counterbalance this.

Major League Soccer is a North American league that exhibits some aspects of the European structure because the sport it plays has a European rather than American origin. Major League Soccer is technically not an association of franchises but a single business entity, though each team has an owner-operator; the team owners are actually shareholders in the league. The league, not the individual teams, contracts with the players. Unlike teams in the four major sports, several Major League Soccer teams qualify to play competitive matches in the CONCACAF Champions League against teams from outside the U.S. and Canada, and MLS uses playing rules set by the international governing body of its sport. MLS followed its own playing rules until 2004, when it adopted FIFA rules. In another parallel with the European model, both the U.S. and Canada have separate knockout cup competitions during the MLS season that include teams from lower leagues. In the U.S., the Lamar Hunt U.S. Open Cup has had MLS participation from the league's inception; starting with the 2012 cup, each competition features all American-based MLS sides. Similarly, all of Canada's MLS teams compete in the Canadian Championship. However, the league structure of MLS follows the North American model, with a single premier league and no promotion or relegation.

Some other North American systems also have a hierarchical structure but without the promotion and relegation of clubs exhibited in the European model. Major League Baseball uses a minor-league system to develop young talent. Most minor league clubs are independently owned, but each one contracts with a major-league club that hires and pays players and assigns them to its various minor clubs. The minor clubs do not move up or down in the hierarchy by on-field success or failure. Professional ice hockey has a system somewhat similar to baseball's, while the National Basketball Association operates a small developmental league. The National Football League does not have a minor league system as of 2011 but it has operated or affiliated with minor leagues in the 1930s, 1940s, 1960s, 1990s, and the early 2000s.