The concept of promotion and relegation in English soccer is a difficult one for most American sports fans to grasp immediately. In major American sport leagues, if for instance the Washington Nationals have an awful year where they only win 40 games, they'll be right back next year playing the likes of the New York Mets and Philadelphia Phillies. That is not the case in the English soccer 'pyramid', where the different levels of soccer are directly connected through a series of promotions and relegations.
To talk specifically about the English Premier League, at the end of each season the bottom three teams are relegated down to the next tier of English soccer, which is called the Championship. The EPL is a 20-team league, so each team plays the other 19 teams twice. At the end of that 38 game schedule, the teams in places 18, 19 and 20 are automatically sent down to the Championship for the next season. That means a team like Portsmouth, who is likely to be relegated this 2009-2010 season, could go from playing Arsenal, Manchester United, and Chelsea one season to playing Watford, Bristol City and Blackpool the next. That's quite a huge difference and it's one of the main reasons why the relegation battle is often more compelling than the battle for the Premier League Champion. These teams are in some cases fighting for the survival of their club as well, as the Premier League television compensation is vastly superior to that of the Championship.
Promotion from the Championship is quite similar in concept. In the 24-team Championship, each team plays the others twice, and at the end of those 46 games, the top two teams are automatically promoted to the Premier League. Teams in places 3-6 then contest a playoff where the winner is awarded the third promotion place to the Premier League. So it's simply three teams relegated and three teams promoted each season. With some slight variation, this type of promotion and relegation exists throughout the entire English soccer pyramid, many levels below the Premier League. It really adds to the allure of the sport that a team can literally rise from a local club to one day play against Manchester United at Old Trafford in the Premier League.