The National League of Professional Base Ball Clubs was established in 1876, and its founders determined that they must make baseball's highest level of competition a "closed shop", with a strict limit on the number of teams, and with each member having exclusive local rights.
[3] In contrast, the shorter distances between urban areas in England allowed more clubs to develop large fan bases without incurring the same travel costs as in North America.
Proponents for closed leagues often argue that this system leads to more financially stable and profitable teams and creates less risk for owners due to teams not needing to spend money in order to stay competitive to avoid relegation to a lower league or qualify for tournaments.
In addition, opponents argue that a closed system leads to teams tanking in order to receive better draft picks.
Opponents also argue that a promotion and relegation system increases competition in the different levels of the sporting pyramid, which can further player development and lead to more ambitious strategies from team owners.