Major League Baseball is probably the closest sport to being equipped to handle relegation in one respect of the number of teams, BUT, all of those teams are affiliates of the major league clubs. There are triple A, double A, and several single A leagues, but the teams in those are all (or virtually all) owned by their respective major league clubs to my knowledge. For example, the State College Spikes is a so-called "Single A Short Season" (the second lowest pro/semi-pro level) baseball team local to me but they are an affiliate of the Pittsburgh Pirates.
Interestingly, for teams like Pittsburgh, relegation would be very healthy imo. See, the Pirates franchise has been one of the most profitable ones in baseball for the past several years, and they've had close to 20 years of sub-500 play. The ownership of the Pirates has this horribly low payroll, and simply rely on the fact that the Pittsburgh die-hard sports crowd will still come out and watch the Pirates suck ass, thus making their profits huge. The ownership will not keep marquee (expensive) players and is basically bilking their fans with a substandard "product" (and that product is the competitiveness of their baseball team). Meanwhile the fans are too die-hard to stop supporting them - and so they are partially to blame as well.
In order for relegation to work in MLB though a salary cap would be necessary as well and the league itself would have to be restructured to allow "competition" from non-affiliate teams in "lower leagues".
I could imagine a scenario where the stadiums were owned entirely by the cities and the teams were granted the right to play in one of those stadiums if they were not relegated and so on and so forth. However, it gets even more complicated because so much of the market is about TV viewership and with the way the league and teams have various and sundry deals with broadcasters and so forth... it's all very complex and basically set up to be a monopoly.
It's kind of a chicken or the egg issue too... would there be enough fan dollars to support a "relegation" league in MLB that wasn't made up of teams all owned by the clubs in the majors? Maybe there would be if there were enough teams... but more teams might not be able to exist because maybe not enough fans would financially support them and so on and so forth.
I'm not sure there is enough talent available to provide that many teams. Let's face it, in order to be a contending team in the lower leagues, you've got to have a lot of talent, you've got to be able to step onto the field against the big league teams and make a game of it. Even the worst of the worst MLB teams would absolutely CRUSH the hell out of the best teams' triple-A affiliates...
In all, I would love to see the league restructured to provide for salary caps and relegation, but to do so would basically mean tearing the league down and rebuilding it from the ground up. Municipalities, broadcasters, and of course private enterprises would all have to come to terms with that... good luck!
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If ignorance were painful, half the posters here would be on morphine drips.
Everyone playing WoW knows everything about playing two classes: 1) their own and 2) Hunters
Everyone playing WoW knows everything about playing two classes: 1) their own and 2) Hunters


