The two most significant types are one that developed in Europe, characterized by a tiered structure using promotion and relegation in order to determine participation in a hierarchy of leagues or divisions, and a North American originated model characterized by its use of franchises, closed memberships, and minor leagues.
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.
Only one team in the National Hockey League (the Montreal Canadiens), for example, existed before becoming part of the NHL.
These have their roots in the long travel distances common in US and Canadian sports; to cut down on travel, leagues are typically divided into geographic divisions and feature unbalanced schedules with teams playing more matches against opponents in the same division.
Also similar to MLS, MLR uses playing rules set by its sport's international governing body.
Many North American systems have a secondary or minor league but without promotion and relegation of teams between them.
Professional ice hockey has a system somewhat similar to baseball's (without as many levels), while the National Basketball Association operates a single NBA G League.
Most such leagues also use revenue sharing and a salary cap in an effort to maintain a level of parity between franchises.
The features of the system are: European football clubs are members both of a league and of a governing body.
In European football there are national cup competitions, which are single elimination knock-out tournaments, are played every year and all the clubs in the league participate.
Also, the best performing clubs from the previous year may participate in pan-European tournaments such as the UEFA Champions League, operated by the Union of European Football Associations.
Most commonly, a pre-determined number of teams that finish at the bottom of a league or division are automatically dropped down, or relegated, to a lower level for the next season.
They are replaced by teams who are promoted from that lower tier either by finishing with the best records or by winning a playoff.
They were replaced by the top two teams from the second level, Queens Park Rangers and Norwich City, both of which won automatic promotion, as well as Swansea City (a Welsh club that plays in the English system), which won a playoff tournament of the teams that finished third through sixth.
The system originated in England in 1888 when twelve clubs decided to create a professional Football League.
Some leagues offer a "parachute payment" to its relegated teams for the following years in order to protect them from bankruptcy.
Famously, the French Ligue 1 lacked a team from Paris, France's capital and largest city, for some years.
The promotion-relegation system is widely used in football around the world, notably in Africa and Latin America as well as Europe.
In the same vein, Australia's A-League Men does not use the pyramid structure normally found in football, but instead follows the tradition of Australian sports having a franchise model and a post-season playoff system.
This model better suits a country with a few important central locations where a sport needs to ensure there is a team playing with no risk of relegation.
In east Asia, places such as Japan, China, South Korea and Taiwan have a particular differentiation among leagues: "European" sports such as football and rugby use promotion and relegation, while "American" sports such as baseball and basketball use franchising and minor leagues, with a few differences varying from country to country.
A similar situation exists in countries in Central America and the Caribbean, where football and baseball share several close markets.
When the National League of Professional Base Ball Clubs was established in 1876, its founders judged that in order to prosper, 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.
[12] 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.