From BR Bullpen
The use of pennant referring to a league championship goes back to the days when a league champion was awarded a flag, or cloth pennant, that would fly over their stadium the following season. The league pennant is also referred to as "the flag". Today, teams will raise a banner for winning the pennant, and in many cases, just for making the playoffs.
 See also
For a list of pennant winners in Major League Baseball, see: