It was devised for the Olympics by Erik Bergvall, a Swedish water polo player, journalist and sports official. However, a similar system had been in use for sports competitions in the United States as early as 1884.
Bergvall wanted to improve on the traditional knockout method used in Olympic competitions: believing that this was only fair in deciding the gold medal winner, Bergvall advocated separate competitions should also be held for the silver and bronze medals.
Bergvall also believed that teams knocked out in the early rounds of the main gold medal tournament should be given a second chance, and that all the teams knocked out by the gold medal winner, including the losing finalist, should then compete in another knockout competition for the silver medal, before all the teams that were knocked out by the gold and silver medallists compete in a third competition for the bronze.
Although the system is fair, there are two main flaws:
It requires the gold medal final to be held in the middle of the tournament instead of at the end.
It also requires defeated competitors to remain ready on speculation.
At the 1920 football tournament, one of the defeated semi-finalists, France declined to hang around in order to catch the ship home, and thus missed out on an opportunity to win a silver or bronze medal.
Because of these flaws, the system was eventually dropped by Olympic organisers and abandoned by the NCAA in the 1930s.