Although Roy Kent (Brett Goldstein) explains the complex nature of European football promotion and the Champions League through one simple word ("money"), the actual rules behind this process are still pretty hard to follow. The number of teams that a European football league can enter into the Champions League is based on the association's success rate (wins and draws) over the past five seasons in the Champions League, Europa League, and Europa Conference League.
The top-performing leagues, including the English Premier League, send their top four clubs to the Champions League each season, which would (in the world of "Ted Lasso," at least) be Manchester City, AFC Richmond, Arsenal, and Newcastle United, in that order. By contrast, demotion, or relegation, within the Premier League affects the bottom three teams in the league (in real life, this ended up being Southampton, Leeds United, and Leicester City in 2023), to be replaced by the top three teams from the EFL Championship — with teams three through six playing a tournament to see who enters earns the third open spot in the Premier League.
By all accounts, this process (and the misleading nomenclature around these leagues) is a bit hard to grasp for outside viewers of "Ted Lasso," though the important thing to note is that AFC Richmond has now entered the most prestigious league in all of European football — and successfully knocked West Ham United out of the Champions League along the way, denying them that fourth spot in the rankings with their exciting victory in the finale.