Promotion and Relegation in Soccer: Lessons From Belgium for Canada

Introduction

Promotion and relegation in professional sports leagues are often viewed as matters of sports governance. For teams facing relegation or promotion, the financial implications can be significant. However, in some circumstances, rules governing movement between leagues may also raise competition law concerns where they favour certain clubs over others and materially affect access to promotion opportunities or the ability to avoid relegation.

A recent decision of the Belgian Competition Authority (“BCA”) provides a useful example of this issue.^[1] This article first outlines that decision and then considers, at a high level, whether similar situations could attract scrutiny under Canada’s competition law regime.

Belgium’s Challenger Pro League Decision

The Belgian dispute concerned the treatment of under-23 (“U23”) teams participating in the Challenger Pro League, Belgium’s second division of professional soccer. These U23 teams are affiliated with clubs in Belgium’s first-division Jupiler Pro League. Under rules adopted by the Royal Belgian Football Association (“RBFA”), two teams are required to be relegated from the Challenger Pro League to the lower amateur league at the end of each season. However, (i) a minimum number of U23 teams were required to remain in the Challenger Pro League, and (ii) U23 teams were generally prevented from being relegated from the Challenger Pro League, absent exceptional circumstances. As a result, the normal relegation framework did not apply to those U23 teams in the same manner as it did to other clubs in the same league. In practical terms, that framework created the possibility that a non-U23 team could be relegated despite finishing above a U23 team in the standings. Several teams, including Royal Francs Borains, RFC Seraing, KSC Lokeren and, later, RWDM, challenged those rules before the BCA.

In an interim decision released on May 8, 2026, the BCA suspended the RBFA’s relegation rules relating to U23 teams pending a full review. In so doing, it concluded that the applicants had raised a credible competition concern and found that immediate relief was necessary to prevent irreparable harm to certain of the applicants. The ruling had an immediate impact on the application of the relegation framework in the Challenger Pro League standings. RWDM, which had been at risk of relegation despite finishing 13th out of 17 teams, was no longer subject to relegation as a result of the BCA’s interim decision, while Club NXT, the U23 team affiliated with Club Brugge, instead became subject to relegation under the revised standings. Subsequently, however, RWDM was denied a professional licence for the 2026-27 season, a requirement for clubs competing in Belgium’s professional leagues. As a result, RWDM is slated to compete in Belgium’s third division, irrespective of the BCA’s interim ruling.^[2] Accordingly, this development altered the practical effect of the BCA’s decision, including with respect to the clubs that ultimately participated in the Challenger Pro League.

Although the BCA has not yet reached a final determination on the merits, the decision indicates that competition authorities may be willing to scrutinize sporting rules governing league access and relegation where those rules are alleged to affect the competitive conditions under which clubs participate.

Potential Implications for Canada

If a Canadian professional sports league were to implement relegation rules similar to those considered by the BCA, any challenge under Canadian competition law would likely focus on the abuse of dominant position provisions in section 79 of the Competition Act, for which purpose it is useful to understand the analytical structure that the Canadian competition authorities take to such allegations.^[3]

In the context of a challenge under section 79 to rules similar to those considered by the BCA, the Commissioner of Competition or a private litigant (having obtained leave under the Competition Act) would need to establish first that the relevant league, governing body or other entity occupies a dominant position in a relevant market. In practice, this requires demonstrating that the league or governing body exercises substantial or complete control over access to organized professional competition, participation opportunities or other commercially significant aspects of the sport.^[4] In this context, Canadian competition authorities define markets in reference to both a product and geographic dimension, based on demand substitution in the absence of alleged anti-competitive conduct. They then consider evidence of the existence and magnitude of market power, such as market shares and barriers to entry. Given the powers and measure of control exerted by soccer leagues and their governing bodies, their dominant position in the relevant market could be in issue.

Second, an applicant would also need to establish that the league or governing body is currently engaging in or has previously engaged in conduct that either:

(i)        is a practice of anti-competitive acts; or

(ii)       had, is having or is likely to have the effect of preventing or lessening competition substantially in a market (unless the effect is not a result of superior competitive performance).

The above disjunctive test was adopted pursuant to amendments to section 79 of the Competition Act enacted in 2022, which effectively expanded the scope of conduct covered by the abuse of dominant position provisions. Prior to the amendments, an abuse of dominance could only be established where a dominant firm engaged in both “anti-competitive acts” and where “the practice had, or was likely to have, the effect of substantially lessening competition.”

To assess the above-noted disjunctive test in (i) above requires a purposive review of whether the league, governing body or other entity has engaged in a practice of conduct intended to have a predatory, exclusionary or disciplinary negative effect on a competitor. Exclusionary acts may make current or potential competitors less effective by increasing their costs, for example. Predatory acts involve a party deliberately setting the price of a product(s) below an appropriate measure of its own cost to eliminate, discipline or deter entry or expansion of a competitor. Disciplinary acts involve actions intended to dissuade an actual or potential competitor from competing vigorously or otherwise disrupting the status quo in a market. Accordingly, the promotion and relegation activities in question and their direct impact on team costs and revenues could raise an exclusionary issue. It is notable however that, in reviewing a party’s purpose, the Canadian competition authorities will weigh evidence of anti-competitive activity against evidence that the activity was engaged in pursuant to a legitimate business justification, that is, evidence that indicates the purpose of the act was efficiency-enhancing or pro-competitive. No doubt, a league or governing body would seek to make such arguments in its defence, alleging that such practices enhanced the long-term competitive opportunities of its teams as a whole.

With respect to the threshold in (ii) above, conduct that has had the effect of substantially preventing or lessening competition in a market focuses on the question of whether competition would be substantially greater in the absence of the alleged anti-competitive conduct. Importantly, such analysis focuses on harm to competition itself rather than harm suffered by a particular team. The fact that a team is disadvantaged by a league rule would not, on its own, establish a contravention of section 79 of the Competition Act.

The above-noted amendments to section 79 of the Competition Act also provide guidance for how one may evaluate competitive effects. Under subsection 79(4), the Competition Tribunal (the “Tribunal”) may consider a range of factors in determining whether conduct has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market, including the effect of the conduct on barriers to entry (including network effects), its impact on price and non-price competition, the extent to which it affects change and innovation within the relevant market, and any other factor relevant to competition in the affected market.^[5] In the context of promotion and relegation, these considerations could include whether league rules create barriers to advancement within a multi-tier league structure, confer competitive advantages on certain teams, restrict opportunities available to rival teams or otherwise influence the competitive dynamics and long-term development of the sport.

The potential consequences of a finding under section 79 are also significant. If the Tribunal were to conclude that the statutory requirements have been met, it may prohibit the conduct in question and, in certain circumstances, order measures necessary to address its anti-competitive effects.^[6] The Tribunal may also impose substantial administrative monetary penalties.^[7] In determining the amount of any such penalty, section 79(3.2) directs the Tribunal to consider factors including the effect on competition in the relevant market, revenues and profits affected by the conduct, the financial position of the respondent, the respondent's history of compliance with the Competition Act and any other relevant circumstances.^[8] In a sports context, these considerations may be particularly important, given the potentially significant commercial implications associated with promotion and relegation decisions. Since movement between leagues can materially affect revenues, sponsorship opportunities, media exposure and other economic interests of participating teams, factors such as the effect on competition, the revenues and profits affected by the conduct, and the broader market impact of the impugned practice may take on particular significance in the assessment of any administrative monetary penalty.

There are also important institutional and procedural distinctions between the Canadian and Belgian competition law frameworks. The BCA performs both investigative and adjudicative functions within Belgium’s competition enforcement system.^[9] In Canada, by contrast, the Competition Bureau is responsible for investigating potential abuses of dominance, while matters brought under section 79 are generally adjudicated by the Competition Tribunal, a specialized and independent body whose jurisdiction and remedial powers are prescribed by statute.^[10] As a result, any analogous challenge to promotion and relegation rules in Canada would need to satisfy the statutory requirements of section 79 and would be assessed through the Tribunal’s established abuse of dominance framework.

The amendments to the Competition Act noted above are also relevant. In addition to applications brought by the Commissioner of Competition, section 79 now permits certain private parties who obtain leave under section 103.1 to bring similar abuse of dominance applications before the Tribunal.^[11] This expanded private access may increase the ability of affected parties to challenge conduct that allegedly restricts access to a market or otherwise harms competition, including conduct that affects competitive opportunities available to teams.

Accordingly, whether league rules governing promotion, relegation or league access could successfully be challenged in Canada would depend heavily on the specific facts, the relevant market and the competitive effects of the challenged conduct. Nevertheless, the BCA’s interim decision provides a useful illustration of how sports governance rules that affect access to competition can raise broader competition law considerations, while also highlighting that any Canadian challenge would proceed under a distinct statutory and institutional framework.

Canadian Professional Soccer Context

Canada does not currently operate a fully integrated professional promotion and relegation system. Instead, the North American professional soccer model is organized around a closed league structure, with player development occurring primarily through league-affiliated systems such as MLS NEXT Pro. MLS NEXT Pro serves primarily as a development league for Major League Soccer clubs and consists predominantly of reserve or academy-affiliated teams rather than independent teams. The prevalence of affiliated development teams within this structure may also help explain why promotion and relegation have not historically formed part of the North American professional soccer model, as a traditional pyramid could create competitive and governance challenges where reserve and independent teams compete within the same system.

Nevertheless, discussions surrounding the long-term development of the Canadian professional soccer pyramid have occasionally included the possibility of promotion and relegation. In that context, the BCA’s interim decision offers a useful illustration of the types of claims that could arise if a future Canadian framework were to treat certain teams, including affiliated or “academy” teams, differently with respect to promotion, relegation or league entry.

If a future Canadian system included exceptions that protected particular teams from relegation, restricted promotion opportunities for others or otherwise altered competitive opportunities through league rules, affected teams might seek to challenge those arrangements under Canada’s competition law framework.

Conclusion

The BCA’s interim decision illustrates that promotion and relegation rules may, in some circumstances, raise issues that extend beyond the administration of sport. Where rules affect access to competition and carry meaningful commercial consequences, they may also attract legal scrutiny. Although the applicability of Canada’s Competition Act to similar circumstances remains uncertain and would depend heavily on the facts, the BCA’s interim decision serves as a useful reminder that league design choices can have implications beyond on-field results.

The Sports & Entertainment Group at Aird & Berlis LLP assists clients in navigating contracts, transactions, regulations, disputes and more. Please contact the authors or a member of the group if you have questions or require assistance.

[1] See: BCA Decision Press Release.