The best way to think about it, in my mind, is more like NCAA Basketball. Each league in Europe (English PL, German BL, Spanish La Liga, French Ligue 1, etc) is like a conference (Pac10, Big10, SEC, etc). Occasionally, they’ll play teams outside their league in friendlies early in the season as warmups for their conference/league season. Then they play the league/conference regular season. So PL will play PL games to crown the PL champion, and Germany will have their own league season, just like SEC and Big10 will have the regular season. At the end of the season, the winners of each conference/league will be put into a separate knockout tournament just for the top teams across all European leagues (called the Champions League in Europe that is kind of like the NCAA March Madness tournament). So this is when Chelsea will play Madrid and Dortmund will play Paris, much like Alabama will play Ohio State or Duke will play IU in the tournament.

The confusing part is there isn’t a post-season in European soccer. They just run the Champions League for this season on top of the NEXT year’s season. So all the teams in the CL this year were top of their domestic leagues last year. The CL is also not exclusively the champions anymore, but more the top 3-5 teams from each domestic league.

There are also domestic knockout tournaments that ALL teams in a country can play in, regardless of whether they are in the top leagues, where you get games with middle of nowhere Knottsborough playing against Liverpool in a 500 person “stadium.” It would be like putting your local rec league softball team playing against the Yankees at some highschool baseball field. But it’s AWESOME when those minnows sometimes win.