With Montreal entering MLS as the 19th team and the 20th team probably coming out of New York, it seems that the league is destined to expand to a number similar to MLB, NBA, NFL, and NHL. There are still no teams in the southeastern part of the country. The southeastern part of the country remains unrepresented in MLS, along with several large markets in other parts of the country (Phoenix, San Diego, Las Vegas, San Antonio/Austin, St. Louis).
No American sports league has dared to expand beyond 32 teams yet. This is where there is the possibility for the MLS to begin using promotion and relegation. The biggest argument against promotion and relegation with the current infrastructure of North American soccer is that it would be patently unfair to have USL Pro and NASL teams compete with MLS teams that have higher budgets and payrolls.
If the league expands to 32 teams, it will have the ability the split into a first division and a second division. There could be anywhere from 17 teams to 20 teams in the first division to ensure a balanced schedule, single table format. That would leave 12 to 15 teams for the second division. The league could merge USL Pro and NASL into the MLS Second Division, so that their markets could also be included. Another possibility is to merge USL Pro and NASL to a 16 to 20 team third division on the soccer pyramid. Admittedly, this would be less than ideal, since promotion and relegation between the new third division and MLS Second Division would have many of the same obstacles with implementing promotion/relegation right now. In any case, this form of promotion and relegation would only apply to promotion/relegation between the top two divisions.
Here is what a MLS Second Division might look like (assuming we add the larger USL Pro/NASL markets):
That would give us 20 teams in the first division and 20 teams in the second division. The remaining USL/NASL teams (and any new teams that might form by then) would be in the third division of North American soccer. This probably seems crazy right now, but if the league can continue to expand and remain healthy while doing so, there's no reason to believe this couldn't work. The league would have to market the second division intelligently to ensure that fans don't see it as minor league MLS. This would involve promoting the second division playoffs, in which the winner would be promoted to the first division. The remaining two spots would be determined by the final table from the regular season. The bottom three teams in the table in the first division would be relegated to the second division. This would give teams that don't make the playoffs in the first division something to play for. Teams at the bottom of the table in the second division would still have incentive to improve, because the playoffs would provide a faster route to promotion. It's much easier to improve from 20th to 8th than it is to improve from 20th to 3rd. There is also the possibility that with 40 teams under the MLS umbrella, there could be three divisions. I think it should start with two divisions though. It should only be expanded to three divisions (with fewer teams in each division) if all teams in both divisions remain financially healthy.
I'm interested to hear what others think about this idea. Please weigh in with your thoughts.